The word "deal" has a curiously apt set of meanings when it comes to M&A. It’s the hook-up of two companies, of course. But according to the Oxford English Dictionary, it also means "to cope with or control" and "take measures ... especially with the intention of putting something right."
Pharma deals are certainly designed to do both: cope with slow growth, for instance, or put right a pipeline or portfolio that’s out of whack with the times.
And then there’s the meaning listed first in the OED. Deal, as in cards. And M&A, even the most well considered deal, is certainly a gamble, and dependent on negotiations that often require poker-table posturing.
Our readers’ nominations for best and worst M&A of the past 10 years show that the gamble can pay off—or not. And like the folks watching poker competitions, they have strong feelings about the players involved.
The most pointed comments came with nominations for worst deal. Predictably, readers piled on Valeant and its debt-fueled, growth-by-M&A strategy. "Valeant buying most anything," one reader suggested. "Valeant is woefully unprepared to evaluate/create value from any acquisition," said another in explaining a nominee for the struggling drugmaker’s Salix Pharma buyout.
Others lambasted Pfizer and its series of megadeals, though plenty also tagged its $63 billion Wyeth buy in 2009 as a success.
But the most nominations for a single bad deal—20 of them—came for Teva Pharmaceutical’s $45 billion buyout of Allergan’s generics business, a relic of its own Actavis-Allergan merger. That deal has come in for plenty of criticism lately as generic pricing pressure dragged down its value to the Israeli drugmaker.
"Teva, in a difficult situation, made matters dramatically worse instead of biting the bullet and investing in longer term branded R&D," one reader said. "$40 billion? Really? What was the multiple on that?" another asked. And a third simply asked, "What was Teva management thinking?"
We’ve gathered other pithy comments below. But let’s turn to the positive now. The year of the megadeal, 2009, garnered more than its share of nominations, with Roche’s buyout of Genentech in the lead and Merck’s $43 billion Schering-Plough buy winning as many backers as Pfizer-Wyeth. All together, the deals of that year won kudos from almost 50 readers.
A few smaller deals—Gilead Sciences’ buyout of Pharmasset, which yielded its powerhouse hepatitis C portfolio; Bristol-Myers Squibb’s IO-focused deal for Medarex; and Sanofi’s 2011 buyout of rare disease and biologics specialist Geynzyme—together won a slew of nominations.
You'll have a chance to vote with the ballot below. To help you choose, we've also put together some background information on those deals below the ballot.<a data-cke-saved-href="//angusliu2017.polldaddy.com/s/best-worst-of-biopharma-m-a-2007-2017" href="//angusliu2017.polldaddy.com/s/best-worst-of-biopharma-m-a-2007-2017">View Survey</a>
Here are the nominees for the best deals of the past decade, along with some reader comments.
Abbott Laboratories’ AbbVie spinoff. On the first day of 2013, Abbott’s pharma business became its own publicly traded company, AbbVie, which made its debut at a market cap of more than $50 billion. "Win-win for both," one reader said. Another: "Abbvie continuous with good partnership deals and leadership roles in the AI space and liquid tumor area."
Actavis-Allergan merger. This $66 billion megadeal was Actavis’ capstone, taking it far beyond the generics company it used to be. Indeed, the combo—which took the Allergan name—has jettisoned those generics in a deal that now looks quite timely. And it moved the tax domicile to Ireland. "Created best of branded Actavis and Allergan with an Irish tax rate," as one reader noted.
Bristol-Myers-Medarex buyout. Where did Bristol-Myers get its blockbuster I-O med Opdivo and fellow immunotherapy Yervoy? This $2.5 billion deal. "Best merger e...
(All Rights Reserved)