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Collected publicly announced information on mergers,

acquisitions and divestitures with an estimated
equity value greater than 1 $m allowed to analyze
target segments and locations, deal values, deal
types, buying and selling companies, and the overall
development of M&A activities over one and a half
decades. In total, 991 transactions between 1998
and 2012 have been included in this study. Underlying
deal data was sourced from various publicly accessible
databases and supplemented by research of our
consultants. Ranking of companies has been based
on worldwide Rx- and OTC-sales in 2012.
Fig. 1 M&A deals by target segment

20

12.6%

15

9.4%

22

13.8%

49

30.8%

1998 - 2002

21
12
10
10
29

32.5%

72

29.0%

20

7.9%

42

16.3%

2008 - 2012

Pharmaceutical

Medtech

Biotechnology

Generics

Vaccines

Diagnostics

Animal Health

Consumer Health

The mid-90s and the turn of the millennium were

dominated by large scale mergers, such as the one of
the Swedish pharmaceutical company Astra and the
British Zeneca Group to AstraZeneca or the British

Fig. 2 Sanofis M&A deals since 2008

Classic Rx
Speciality /
Opthalmology
Vaccines
Consumer
Health / OTC

additional sales that help filling the gap left by Plavixs

patent expiry. Furthermore, the 19 $bn acquisition
of Genzyme in 2011 boosted Sanofi in the Biologics
and Rare Disease segment, providing the French
company with significant additional growth potential
from Biotech.
M&A diversification activities also differ by the
home region of the buying company. Still 80% of
Japanese players M&A targets are pharmaceutical or
biotech related, while European companies acquired
more targets outside of the traditional Rx-scope
(48.6%). Moreover the study suggests that the size
of the buying company influences the choice of
target segment. The share of generics deals for
example, has been significantly higher within the
Top 1-6 companies (13%), than within the Top 15-20
companies (6%).

Generics

Fig. 3 M&A target segments by buying

company size

Animal Health
Stratified
Medicine

Top 1 61
2008

2009

2010

2011

2012

Sanofi, as a prominent example, transformed from a

small, French company to a Top 3 diversified player,
mainly driven by M&A activities. In the beginning,
Sanofi heavily relied on its patent protected drugs.
Early M&A targets were selected because of their
patent protected product portfolio and pipeline in Rx
(e.g. Aventis in 2004).
In 2008, the newly appointed CEO Christopher
Viehbacher announced a long-term strategy based
on positioning the company as a diversified
healthcare player with a strong presence in
Emerging Markets. Since then, several acquisitions
of generics companies (e.g. Medley in Brazil or
Laboratorios Kendrick in Mexico) and consumer
healthcare companies (e.g. BMP Sunstone Corp.
in China or Nepentes in Poland) have effectively
diversified Sanofis operations, while providing

Top 15 202

25%

57

Pharma

21

38%

28%

62

Biotech

26

40%

30 Generics 5

13%

9%

Realizing scale

Phasing-out of patents, dried up product pipelines,

low returns on R&D investment many analysts have
predicted a dark future for Big Pharma. Is this really
accurate or yet another shift in the pharmaceuticals
industry towards new opportunities, as there have
been many before? To shed some light on how Big
Pharma is dealing with those challenges, we have
analyzed the Top 20 pharmaceutical companies
M&A patterns of the past 15 years.

merger between Glaxo Wellcome and SmithKline

Beecham to GlaxoSmithKline. The blockbuster
model of these days aimed at achieving economies
of scale and scope to maximize share of voice. After
years of refocusing on core-business, recently
many pharmaceutical companies have been trying
to counter the ever more challenging environment by
driving diversification. Pharmaceutical companies
are increasingly acquiring targets outside of their
traditional focus of branded small molecule products.

19 Consumer 2 4%

8%
Diversifying business

Mergers & Acquisitions strategies of the

Top 20 in the global pharmaceuticals
industry have been changing

15 Medtech 1 2%

7%

5% 12 Animal H. 2 4%
4%

9 Vaccines 1 2%

4% 10 Diagnostics

0%

3% 6 Chemicals

0%

2% 4 Nutrition 1 2%

1) Top 1-6 include: Pfizer , Novartis, Sanofi, Merck & Co., Roche, GSK
2) Top 15-20 include: BMS , Boehringer Ingelheim, Novo Nordisk, Astellas,
Daiichi Sankyo, Eisai

Geographical expansion has been another key

driver for the M&A activity in the pharmaceuticals
industry. While mergers and acquisitions in the US
remained relatively stable over time (fluctuating
around 50% of all deals), the percentage of European
targets shrank from 35.4% (1998 2002) to 22.2%
(2008 2012). In the 90s, non-domestic players
were facing significant hurdles to enter the Japanese

market. During the 2003 - 2007 period the percentage

of mergers and acquisitions targeting Japan doubled.
However, this trend has reversed lately. Only 3.6% of
all Big Pharma acquisitions and mergers during 2008
- 2012 have been involving Japanese targets.
Tab. 1 Distribution of Big Pharma M&A deals in
Emerging Markets (%; 1998-2012)
Region

1998-2002

2003-2007

2008-2012

Rest of Asia

2.6

1.7

1.7

China

0.0

2.9

4.5

CEE

1.3

2.9

3.3

India

2.6

1.7

5.8

LatAm

2.6

1.7

4.9

14 / 9%

19 / 11%

49 / 21%

EM Total

In contrast, the proportion of Big Pharma deals in

the Emerging Markets has risen dramatically from
10.9% (2003-2007) to 20.2% (2008-2012), with a high
number of targets in India (5.8%), LatAm (4.9%), and
China (4.5%). These acquisitions in pharmerging
markets helped Big Pharma to expand the
geographical footprint while benefiting from
forecasted double digit growth in some of these
regions. Notwithstanding the fact that 42.4% of the
acquired companies in the Emerging Markets mainly
operate in the Generics or OTC/Consumer Health
segments (which were associated with lower margins
in the past), today these deals are considered to be
of strategic importance, allowing Big Pharma to gain
local expertise and infrastructure.
Driving innovation through M&A has always been an
important aspect in Big Pharmas strategy. Nowadays
however, the role of strategic partnerships and
collaborations increasingly gain importance. Although
fitting the right drug to the right patient has become
a buzzword in the industry recently, Personalized
Medicine has only created a limited number of M&A
deals for Big Pharma, like the 470 $m acquisition of

Mergers & Acquisitions of the Top 20 in the global pharmaceuticals industry

Novartis

Pfizer
NexWave
Pharma

2012*
2011

Capsugel
King Pharma

2010

Sanofi

Genoptix
Alcon

Human Genome
Sciences
GSK OTC

Chattem

2008

Speedel

2007

BioRexis
Pharma

Nstle Medical
Nutrition
Gerber Products

Acambis
Symbion
Consumer

2006

Pfizer Consumer
Healthcare

2005

Angiosyn

2004

Esperion

2003

Pharmacia

Delta Biotech

Chiron

Zentiva

Sirna
Therapeutics
GlycoFi

Hexal
Sabex

Aventis

Durascan

2001
2000

Warner-Lambert

AllenSpa
Generic BU
CNS

Aton Pharma

Fraxiparine +
Arixtra Sanofi

Igen International

Durascan

1997

40

60 0

20

40

20

40

60 0

20

40

60

H.C. Starck
Bayer
Diagnostics
Schering

Novartis
Agribusiness

60 0

20

Wyeth Animal
Health BU

Medarex

Pharma Force

Clinical Supply Co.

Amgen KK
Millennium
Pharma

Actimis Pharma

BMS Medical
Imaging
Convatec

Rabanxy

Molecular
Genetics

Ilypsa

Paradigm
Therapeutics

Delta Pharma

Abgenix

BASF Takeda
Vitamin KK

20

40

60

20

20

40

Pharmaceutical

Merger

Biotech

Divestiture

Generics
Consumer
Diagnostics
Medtech

Agensys

Animal Health
BU

Animal Health

Deal Value in $bn

Yamanouchi +
Fujisawa

BMS OTC
US&Can.

Tularik

> 20

Veterinary
Product Ops

STEAG microParts

Vaccine Man.
Plant

Food Flavoring
Production Ops

Immunex

InterBio
Clairol

Sybron Biochemicals

20

40

60 0

20

40

60 0

20

40

20

40

60

20

40

< 1 undisclosed

20

40

60

DuPont

Examples

Matrix
Essentials

60

1-10

Blue bars in the

background indicating
the companys
(estimated)
Prescription + OTC
sales in $bn

Takeda acquires pharma

company Nycomed for
$10-20bn
Hydrocerol
Business

Bayer divests Biotech

company Talerics for $1-10bn

Ben Venue
Laboratories

Daiichi-Sankyo divests its

Animal Health unit for an
undisclosed amount
Merger of Yamanouchi +
Fujisawa

German Drug
Production Unit
60

10-20

Semco
Bioscience

Medisense
60

Acquisition

Printing Ops

Chiron Diagnostics
Animal Health
Division

40

Sector

Deal Type

OSI Pharma

Others

DowElanco

60

Adnexus
Therapeutics

Legend

Bulk Vitamin
Business

DePuy

40

ROXRO Pharma

PCS Health
Systems

Corange

40

Zymo Genetics

Novopharm

Lyondell

Perclose
Abbott Mead
Vickers PLC

Centocor

Inhibitex

Archimedes
Pharma

FH Faulding

BASF Pharma

Eisai

Amylin Pharma

Animal Health BU

Aventis
Cropscience
Bayer Household

Tastemaker

20

IVAX

SICOR

Plant Protection
Ops

DePuy

CureTech

Astellas

Plexxikon

Bayer Insecticide

Cordis
60

ICOS

Daiichi Sankyo

Amira Pharma

Amgen KK

CoGenesys

TheraSense

Inverness
Medtech
ALZA

Ciba-Geigy +
Sandoz
20

Talecris

BMS

Amgen Fremont
Operations

Nycomed

SSP

Barr

ImClone
Systems

Abbott Foods

Block Drug

Crop Protection
Business

BioVex

Athenix

Scios

Astra+Zeneca

Valleylab

Cephalon
Thramex
Taiyo

Hospira

Biapharm

Cellmark
Diagnostics

DuPont Merck
Pharma

Micromet

Roche OTC

Vitamins Unit

Astra Merck Inc

Schiff Nutrition

Novo Nordisk
Chr. Hansen
Holding

ratiopharm

Kos Pharma
Guidant
Vascular BU

Animas

deCODE
Mustafa Nevzat

Pathway
Medical
Technology

Boehringer Ing.

Takeda

Amgen

AgraQuest

Avid
Radiopharma

Abbott IVD
Business

Nippon Roche KK

Wesley Jessen

Schneider
Worldwide

Evalve
Avanced
Med Optics

Teva

LANXESS AG

Sanofi +
Synthelabo

1996

Cougar

Glaxo Wellcome +
SmithKline

1999
1998

Solvay

Pfizer Consumer
Healthcare

Disetronic

Rosetta
Inpharmatics

Acclarent

Conor Medsys

Cambridge
Antibody Tech
OTC Drugs Unit

Agribusiness
Lagap Pharma

Med-Immune

BioVeris

ID Biomedical

Generic BU

Piramal

OMRIX

Ventana

Medco Health
Solutions

Lek

RespiVert

Mentor

Chugai

Banyu

Idenix Pharma

Bayer

Animal Health
BU of J&J

Synthes

Genentech

Sirtris

Eon Labs

2002

Stiefel
Laboratories

Reliant

NeuTec

Astra Tech

Novexel

ScheringPlough

Eli Lilly

Abbott

J&J

Ardea
Biosciences

SmartCells

TargeGen
Merial
Medley
BiParSc.

Wyeth

Inspire Pharma

Genzyme

AstraZeneca

Sapomp
Wohnbau

GSK OTC India

EBEWE
Elixir Pharma
Proteon

2009

Roche

Fougera

Corthera

FoldRx

GSK

Merck & Co

60

20

40

60 0

20

40

60

20

40

60

20

40

60 0

20

40

60

20

40

60

Sales in $bn
* Estimated sales

Genoptix by Novartis in 2011. In line with the current

trend towards more R&D outsourcing, collaboration
agreements with diagnostic players seem to be a more
efficient way than acquisitions. To benefit from the
opportunities in Personalized Medicine, developing
companion diagnostics in close co-operations with
these partners has become state of the art.
Cutting cost across the value chain is another
important issue for Big Pharma that is reflected in
their M&A strategy. During the past five years, many
companies, like Novartis, Pfizer and AstraZeneca,
have extensively divested manufacturing and R&D
facilities in order to become more focused and to
increase the percentage of services outsourced into
strategic partnerships.

In January 2013, Abbott split its business into two

publicly traded companies: AbbVie has become the
research-focused pharmaceutical company with higher
profit potential, which will cover Abbotts portfolio of
proprietary Pharmaceuticals and Biologics. All other
lower-risk businesses (Generics, Medical Devices,
Diagnostics, and Nutritional Products) will continue to
operate under the Abbott name. This strategic move
might illustrate the beginning of the next M&A decade.
Several other companies, among which Pfizer has
been named as the most prominent example, have
been discussing similar moves. Be it to satisfy market
and stakeholder expectations on margins or to limit
long term development risks, companies are once
again rethinking what might be the best strategy to
prepare for the future.

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e-mail: muc@cepton.de

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United States of America
e-mail: nyc@cepton.net

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Germany
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France
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