Prescription for Profit: Pharma-Biotech Industry Continues Mega-Billion Dollar Merger & Acquisition Binge in 2015

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--Over the past decade, it has become obvious that the Pharmaceutical-Biotech Industry considers mergers and acquisitions (M&A) a key factor to growth, with billions of dollars on the table and occasional high-stakes drama. There appears to be no end in sight to this feeding frenzy for 2015. A scant two months into the year, and already several major deals are in play.

The most recent transaction is the Valeant Pharmaceuticals (NYSE:VRX) (Laval, Quebec) $10 billion offer to buy Salix Pharmaceuticals (NASDAQ:SLXP) (Raleigh, North Carolina), which develops drugs and devices to treat gastrointestinal disorders. The deal does not begin to approach the aggressive $53 billion bid Valeant made in 2014 for Botox manufacturer Allergan (Irvine, California), ultimately losing out to Actavis (NYSE:ACT) (Dublin, Ireland) and its offer of a $66 billion pot of gold.

Irish drugmaker Shire (NASDAQ:SHPG) (Dublin, Ireland) was first out of the gate in January with a $5.2 billion offer to purchase NPS Pharmaceuticals (Bedminister, New Jersey), a biopharmaceutical company that is focused on rare diseases. The transaction somewhat eased the sting of failure over the company's aborted $54 billion attempt to buy AbbVie (NYSE:ABBV) (North Chicago, Illinois) in October 2014.

In early February, big pharma leader Pfizer Incorporated (NYSE:PFE) (New York, New York) announced a $17 billion deal to buy Hospira (NYSE:HSP) (Lake Forest, Illinois) and its generic injectable pharmaceuticals product line. Pfizer was still licking its wounds over its failed $120 billion bid to buy AstraZeneca plc (NYSE:AZN) (London, England) last year.

Growth and innovation are the primary motivations behind the deals, not to mention some expected cost savings. The tax breaks offered to U.S.-based companies headquartering in parts of Europe can sweeten the deal.

Some companies wish to shed business divisions to become more specific in their product focuses. For a variety of reasons, not the least of which is patent loss, companies look to M&A and in-licensing activities to make up for the loss of revenues that will arise with key products losing patent exclusivity.

A target company does not necessarily have to have a product on the market to generate interest from the companies with cash to spend. Instead of attempting the risky and expensive venture of developing a product from scratch, wealthy shoppers are looking for companies with mid- to late-stage pipeline candidates that show great promise.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.