Data and market quotations of M&A transactions in the global pharmaceutical industry in 2014

Source: pharmaceutical economic news 2015-2-4 pharmaceutical and biotechnology industry has set an amazing record of M & A in 2014, among which the desire of enterprises for transactions is one of the reasons The soaring stock market and fierce competition for assets promote the rise of valuation, which is also an important contributing factor In addition, through careful observation of those enterprises in the industry who have invested heavily, although large pharmaceutical companies are still generally cautious about M & A, some companies are willing to return to the negotiation table The stock market boom has raised the cost of M & A an analysis of deals worth less than $20 billion points out that the average price of deals between pharmaceutical companies surged 39 per cent to $911 million last year Further in-depth exploration of the data of evaluatepharma shows that the number of medium-sized M & A cases has increased dramatically In this analysis, researchers calculated the average transaction price of M & A in different ways, showing the changes in the past few years However, this analysis only includes the M & A activities of pharmaceutical companies and biotechnology companies, while medical device companies are not considered At the same time, it also excludes the biased effects brought by mega acquisitions in recent years, such as large transactions involving Elgin, Genentech, Wyeth and Schering plough The analysis shows that the M & a valuation among pharmaceutical companies has been rising in 2013, while it has been accelerating in 2014 However, this is not surprising for the biotech stock index watchers, especially the NASDAQ biotech index watchers In 2014, the number of M & A cases in the pharmaceutical industry did not increase, but the total amount of M & A reached US $212 billion An analysis published recently reveals the reason why the amount of M & A has soared Obviously, atvis has made a lot of contributions, and its two major acquisitions, Elgin and forest lab, have reached US $66 billion and US $28 billion respectively In addition, the US $23 billion asset swap transaction between Novartis and GlaxoSmithKline also accounted for a large proportion of the total amount of M & A (Novartis acquired GlaxoSmithKline's anti-tumor drug business with us $16 billion, GlaxoSmithKline acquired Novartis vaccine business with us $7 billion in addition to influenza vaccine) However, the above factors can not fully explain the high average transaction price in M & A cases Table 2 shows the distribution of M & A activities of different scales, from which we can see that the number of M & A cases in the range of 1-10 billion US dollars has a big jump last year The rise of the stock market means that more companies have entered the ranks of large market value enterprises Therefore, for those companies with merger ambitions, the cost of acquisition becomes more expensive Can overvalued values attract "buyers"? Most of the M & A ambitions are embodied in specialized pharmaceutical companies or generic pharmaceutical companies Although the large pharmaceutical companies have been active in the amount of M & A and the number of transactions in the past three years, they are also not able to catch up with the bids of atvis and Valeant for Elgin (see Table 3) Although in 2014, many large pharmaceutical companies rejoined the ranks of M & A activities, the giants have been more inclined to risk sharing cooperation However, it is an indisputable fact that the cost of M & A has skyrocketed Through the analysis of the M & A expenditure of the pharmaceutical giants in the past three years, it is found that the total M & A expenditure of large pharmaceutical companies in the past three years has reached US $82 billion, compared with us $24 billion at the same time last year Roche's acquisitions of intermune and Merck's acquisitions of Cubist and idix may indicate that executives at some large pharmaceutical companies are increasingly willing to bet on riskier acquisitions The asset swap between Novartis and GlaxoSmithKline shows that internal affairs may be a more important factor for pharmaceutical companies to make merger and acquisition decisions It is worth noting that Lilly has not completed a pharmaceutical M & A in the past three years This year, many companies in the M & a market will welcome more enthusiastic participation of large pharmaceutical companies However, many of the top executives of the pharmaceutical giants have publicly declared that they refuse to consider the overvalued value that the industry is currently playing with The current market situation indicates that the M & A environment will remain healthy in 2015 But even in this boom, it's not easy for many high valuation companies that are seen as targets to succeed in attracting acquirers.