Pharmaceutical R&D Pipeline News

Company Analysis - Death of the megadeal

The changing face of the pharmaceutical industry

The merger and acquisition (M&A) landscape of the pharma industry has always been a vital indicator of growth for the business, and is often punctuated by huge ‘megadeals’ which can affect the entire industry.

However, a change in this trend appears to be underway and, looking at the industry as a whole, it seems to be a symptom of a major upheaval taking place in the industry at the moment, in which the original megadeal is no longer a viable path to growth.

Looking back at the M&A trends in 2007, there was a significant increase in the value of activity that took place. The total value of M&A deals was US$79.5bn, a massive 43% increase from 2006’s total of US$55.7bn, and yet there were at most only three that could be considered large and none whatsoever that could qualify as a megadeal. This apparent discrepancy is a reflection of the new way of doing business – big companies making strategic yet still relatively small-scale M&A to bolster their pipelines in key cutting-edge areas.

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