Mergers and Acquisitions play an instrumental role in growth strategies & development for almost every pharmaceutical organisation.
Over the last 30 years, M&A’s have led to considerable strengthening across pharmaceutical companies, Biotech’s, CRO’s, CDMO’s, and many more. Especially over the last two years, big pharma companies have orchestrated megadeals, to deliver across the board, keep up with demand, and geographic expansion requirements. Bolt-on acquisitions/expansions have also increased as mid-large biopharma’s grab speciality or emerging companies with promising futures and capabilities.
M&A is a crucial method for achieving growth when organic expansion is restricted. Partnerships provide companies with the necessary funds to drive their R&D activities and new drug development. On average, a biopharma company must spend roughly $3.5billion year-on-year just on R&D to create a profound pipeline. The previously mentioned speciality or emerging biotech and pharma companies funded by venture capital and private equity firms, are responsible for a rapidly growing percentage of new drug development. These are strong targets for big pharma organisations looking to expand their pipelines and gain access to new & next-generation technologies without needing to directly invest in R&D. As a result, the level of M&A activity has been high in recent years.
The emergence of prestige CDMOs with high revenues have taken the market by storm. A few prominent transactions in the past few years – Sigma Aldrich by Millipore, Patheon and Brammer Bio by Thermo Fisher Scientific, Capsugel by Lonza, Juniper Pharma, and Cook Pharmica by Catalent, and most recently, EQT acquiring Recipharm which have in turn already shown their aggressive growth plan by acquiring Vibalogics and Arranta Bio to strengthen their Biologics arm in early 2022. M&A can be crucial in the growth of strategies and development in companies, allowing them to grow, strengthen and expand.