Consolidation in the U.S. healthcare industry, which has already witnessed a string of multi-billion dollar deals, is expected to remain a major theme for the rest of 2019.
Bristol-Myers Squibb’s $74 billion acquisition of Celgene set the M&A ball rolling in January, and was followed by AbbVie Inc’s $63 billion bid for troubled smaller rival Allergan Plc.
Regulators are pressuring companies to cut drug costs and takeovers have become the preferred method of combating looming patent expiries on some of the top-selling medicines they have relied upon in recent years.
Following is a list of big healthcare companies and their recent deals and possible future acquisitions.
BIOGEN INC:
** Since the halt in its development of a promising Alzheimer’s therapy wiped $18 billion off Biogen’s stock in March, Wall Street has been calling on the company to beef up its drug development pipeline through acquisitions.
** Possible deals would give the company access to drugs for lucrative therapeutic areas such as Duchenne muscular dystrophy and depression.
** Recent deal was the $877 million buyout of gene therapy developer Nightstar Therapeutics, and as of June 30 the company still had cash reserves of almost $2 billion.
ELI LILLY AND CO :
** Lilly spun off its animal health unit earlier this year, and has reiterated its commitment to making bolt-on acquisitions to diversify its portfolio, as its long-term top-sellers Humalog and Cialis face intensifying competition.
** Company has also been focusing on cancer drug development and its $8 billion buyout of Loxo Oncology helped it delve deeper into the lucrative business.
** The company reported $2.29 billion in cash and cash equivalents as of June 30.
PFIZER INC:
** The world’s largest drugmaker has repeatedly said it would steer clear of large scale M&A, citing confidence in its own drug pipeline. But in April it said it would look at bolt-on deals worth “a few” billion dollars to complement its pipeline
** The spin-off and merger of its consumer healthcare unit with GlaxoSmithKline Plc, as well as its off-patent branded drugs business has simplified the company’s business structure.
** Analysts say that may still leave room for smaller deals like its $10.6 billion buy of Array Biopharma, which boosted its arsenal of oncology drugs and set the stage for the company to become a leader in colon cancer treatments.
** Shares of the company are down 20.6% so far this year.
AMGEN INC :
** A recent U.S. court ruling win on Amgen patents for rheumatoid arthritis drug Enbrel is seen as having left the company free to pursue business development plans, including M&A.
** The drugmaker said previously it would look for both big and small deals to push deeper into areas like cancer and metabolic disorders, where it already has a firm footing.
** Analysts have also suggested buying Celgene Corp’s psoriasis drug Otezla, which Bristol-Myers Squibb Co is looking to sell in order to allay antitrust concerns.
** Amgen had $5.53 billion in cash and cash equivalents as of June 30. Shares of the company are up nearly 5% this year.
MERCK & CO INC:
** Investors have raised concerns about Merck’s increasing dependence on blockbuster cancer drug Keytruda, highlighting the need for the drugmaker to engage in M&A.
** The company has said it would focus on bolt-on deals rather than a large, transformative acquisition.
** War chest stood at $6.7 billion in cash and cash equivalents, as of June 30 with shares up nearly 11.3% this year.
GILEAD SCIENCES INC :
** CEO Daniel O’Day has raised expectations for consolidation since taking the helm in March, prioritizing pipeline diversification and announcing a $5.1 billion investment in Belgo-Dutch biotech Galapagos NV, which pushed deeper into areas such as fibrosis and arthritis.
** California-based Gilead had cash and cash equivalents of $11.24 billion as of June 30. Shares up about 1% this year.
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Source: Reuters.com