(more on previous story from FT)
"Some of the world’s biggest pharmaceuticals companies are likely to embark on a buying spree as imminent patent expiries combine with a greater willingness from biotechs to sell out.
The leading pharma companies are seeking to compensate for an estimated drop of more than $100bn in sales over the next five years on blockbusters such as Pfizer’s Lipitor, Wyeth’s Effexor, Merck’s Singulair and Eli Lilly’s Zyprexa.
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In depth: Mergers and acquisitions - Jun-19Harsher climate shifts goalposts for deals - Jan-05Record number of M&A deals cancelled in 2008 - Dec-22China overseas deals set for strong rebound - Dec-16Brunei’s BMB seals US private equity merger - Dec-05Bets are off as lack of deals his arbitrageurs - Nov-27“There are multi-layers of M&A going on at the moment as the big pharma companies look for ways in which to get their share prices up – and these companies are deploying a wider range of strategies to do so than ever before,” said Richard Girling, global co-head of healthcare at Merrill Lynch.
Several chief executives, including Andrew Witty at GlaxoSmithKline and Bernard Poussot at Wyeth, have already said they are suspending share buybacks to take advantage of the dislocation in the markets to acquire assets.
They have been helped in the short term by the relative outperformance of pharma stocks, easing pressure from investors to return cash. More importantly, with valuations down more than 30 per cent, it looks more attractive to acquire biotechs rather than negotiate complex licensing deals."
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