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Pharma deals down in 2011

 Deal-making activity fell by nearly a fifth last year as pharmaceutical companies reduced R&D expenditure and streamlined their activities, research has shown.

PharmaVentures found that overall deals were down by 18% in 2011 and licensing arrangements fell by 16%. However, M&A activity increased by 30% as companies sought to secure their futures.

Fintan Walton, Chief Executive of PharmaVentures, said the industry is “undergoing a rapid and major transformation” but there was still “significant opportunity for great deals to be done”.

Research focused on PharmaVentures’ database, records and working relationships from within the pharmaceutical industry. It revealed that although merger deals were on the rise, so too were the contingency payments included in recent deals.

Oncology was the most popular therapeutic area to dominate the landscape with Roche being the most prolific deal-maker.

Unsurprisingly, pharmaceutical companies turned to Emerging Markets – particularly China and India – to conduct the majority of their deals. AstraZeneca recently completed a deal to acquire Guangdong BeiKang Pharmaceutical, a manufacturer of generic injectable antibiotics, to strengthen its position in the region. Bayer HealthCare also increased its presence in India last year when it partnered with Zydus Cadila after Merck had created a similar venture with Sun Pharmaceutical Industries.

PharmaVentures is an international healthcare advisory group.

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