In details of the large-scale M & A transactions of global pharmaceutical enterprises in 2019, what will the giants play next?

2019 is a year of vigorous development of global pharmaceutical M & A At the beginning of the year, the pharmaceutical industry heard the news of heavyweight purchase, and Bristol Myers Squibb purchased new base with us $74 billion According to Luft's data, if debt is included, the transaction is worth 95 billion US dollars, which will surpass Pfizer's record of purchasing Warner Lambert with 89 billion US dollars in 2000 and become the largest acquisition in the history of pharmaceutical industry! In addition, in 2019, Elanco, an animal health company, acquired Bayer's animal health business and became the second largest animal health company in the world Amgen spent 2.7 billion US dollars to acquire 20.5% equity of Baiji Shenzhou, becoming the largest transaction between international Biopharmaceutical Enterprises and Chinese pharmaceutical enterprises, involving the largest product line, which is also the largest equity investment in the global biopharmaceutical field In addition, Roche has created the largest license for individual research projects in the field of cell and gene therapy for us $2.85 billion Let's take a look at the M & A of global pharmaceutical companies in 2019 In this paper, 18 cases of M & A of major pharmaceutical companies with a transaction value of more than US $2 billion announced in 2019 are analyzed Among them, those announced before 2019 and completed in 2019 are not included in the statistical scope of this paper Figure 1: pharmaceutical enterprise merger and acquisition cases (incomplete statistics) with a transaction amount of more than US $2 billion in 2019 source: public information, the merger and acquisition direction of the pharmaceutical enterprise leaders of Zhongkang industrial capital research center can reflect the development direction of the industry to a certain extent Looking back on the M & A transactions of the world's leading pharmaceutical companies in 2019, we can find the following characteristics: 1 Tumor is still popular in the field of tumor research and development in recent years, which is also the hot spot of the layout of major pharmaceutical companies In 2019, nearly half of the transactions listed in the above table involve products in the field of tumor, among which the transaction amount is more than US $2 billion As a popular field for pharmaceutical companies, "tumor" runs through the headlines of large-scale M & A of pharmaceutical companies in 2019: from the merger of tumor giant Bristol Myers Squibb and Xinji announced in January 2019, to Pfizer's $11.4 billion acquisition of array in the middle of the year Biopharma, AstraZeneca and the first three pharmaceutical companies have licensed trastuzumab In December, some multinational pharmaceutical companies acquired early-stage companies, such as Merck, which acquired arqule and Sanofi for $2.7 billion and synthorx for $2.5 billion It can be seen that major pharmaceutical companies have been expanding their tumor pipeline to prepare for market share 2 In 2019, drug companies will continue to favor gene therapy There are not only two types of gene therapy approved by the U.S FDA and the European Union, but also a number of drug companies actively layout the field of gene therapy through M & A According to vantage's statistics, the amount of gene therapy products purchased in 2019 has reached 17 billion US dollars In the above table alone, 4 transactions were related to gene therapy Among them, Roche has created the largest license for individual research projects in the field of cell and gene therapy with us $2.85 billion In addition, there are some M & A transactions less than $2 billion For example, in March 2019, Bojian purchased nightstar therapeutics, an eye gene therapy company, for a total price of about $800 million; in August, Bayer announced a $600 million acquisition of bluerock, an engineering cell therapy company dedicated to the development of Neurology, cardiology and Immunology using a proprietary induced pluripotent stem cell platform And so on It can be seen that many large pharmaceutical companies are not less interested in gene therapy In fact, as early as January 2019, Dr Scott Gottlieb, director of the FDA and Dr Peter marks, director of the center for biological product evaluation and research, predicted that gene therapy would enter a booming era By 2020, the FDA would receive more than 200 inds a year, and by 2025, it was predicted that 10-20 cell and gene therapy products would be approved each year In 2019, several companies have made significant progress in gene and cell therapy, which will also accelerate the development of this momentum However, there are also challenges behind this rapid growth, such as a large number of early investment, high product prices, etc In addition, Michael choy, partner and managing director of Boston Consulting Group, said in an interview, "pharmaceutical companies will face the challenge of how to integrate gene and cell therapy into their overall business Gene and cell therapy does not fit the conventional paradigm of budget and decision-making, which needs to be adjusted according to different development speed and relevant expertise Companies are cramming gene therapy into their current models, but in the long run, changes must be made " 3 Before the multinational pharmaceutical giants continued to divest their non core businesses, they always sought to expand and diversify Now, these enterprises are returning to their core businesses and focusing more and more on innovative drugs Especially in recent years, multinational pharmaceutical companies have taken more and more actions to divest non core business In 2014, Novartis divested its influenza vaccine business with $275 million; in the same year, Bayer purchased the health consumer goods business of MSD with $14.2 billion; in 2015, Lilly invested $5.4 billion to acquire Novartis's animal health products business; in 2016, Sanofi's animal health business and bringer Ingelheim's consumer health business exchange.. In 2019, it was subject to "4 + 7" volume procurement and patents Due to the impact, Pfizer has to be sold and merged into a new company with mylan, the largest generic pharmaceutical company In order to focus more on its main business, Bayer also divested its animal health business The focus of multinational pharmaceutical enterprises is to shift to innovative drugs In the future, multinational pharmaceutical enterprises will compete in innovative drugs Figure 2: some multinational pharmaceutical companies adjust their non core business sources: public information In 2020, Zhongkang industrial capital research center, large pharmaceutical companies may be more inclined to engage in small-scale M & A transactions A recent survey by KPMG shows that in 2020, CEOs of American life sciences companies still have strong interest in M & A According to a report released by Chris short, an analyst at JPMorgan Chase, companies are more likely to seek smaller acquisitions than large-scale ones after the "flood" of M & A transactions in 2019 In addition, Schott said: "we believe that by 2020, business development will shift to bundling, focusing on expanding existing treatment verticals and increasing potential IPO opportunities in the mid-1920s." The reason why pharmaceutical companies prefer small-scale transactions is that, on the one hand, the stock price of large pharmaceutical companies is growing slowly or even falling, while the overall performance of biotechnology companies is higher than that of large pharmaceutical companies Therefore, large pharmaceutical companies are more interested in these biotechnology companies, hoping to increase relatively small biotechnology acquisitions, or even pay a high premium to lock them in On the other hand, the large number of transactions received by the Federal Trade Commission (FTC) in the past year did not perform well For example, in 2019, Bristol Myers Squibb's acquisition of Xinji, Roche's and spark's transaction, the merger of Alberto and eljian, Elanco's acquisition of Bayer's animal health business and other transactions encountered antitrust obstacles, some of which were delayed or still unsolved, because The big pharmaceutical companies may be more wary of such deals This is also a big problem that potential biopharmaceutical buyers will face in 2020, and the U.S antitrust regulators may conduct additional review As the U.S presidential election approaches, the pressure of the U.S Congress on drug pricing may also turn into more obstacles for the Federal Trade Commission to review.