Takeda acquired Shire for USD 62 billion in May 2018, and the "new Takeda" is expected to rise to the global top 10 pharmaceutical companies. BMS acquired Celgene for USD 74 billion in Jan. 2019; the "new BMS" will possess many blockbusters and R&D pipelines in the oncology field and increase its competitiveness in the oncology drug R&D for a restart. The acquisitions between similar pharmaceutical enterprises today may become an important way for pharmaceutical enterprises to gain core competence. Then, will other pharmaceutical enterprises follow the path of the "new Takeda" or "new BMS"?
Around a decade ago, the acquisitions between pharmaceutical enterprises were to expand R&D pipelines, dabble in different disease areas, and gain competitiveness through extensive R&D pipelines, such as the Sanofi-Aventis, Pfizer-Wyeth and Novartis-Alcon acquisitions. But today, targets of acquisitions have gradually shifted to the core competitive fields, and large pharmaceutical enterprises sell R&D pipelines that are assessed as secondary, so that they can be the No. 1, No. 2, or No. 3 in a certain field.
Takeda acquired Shire for USD 62 billion on May 8, 2018. The "new Takeda" will focus R&D efforts on tumor, gastrointestinal disease, and nervous system disease fields, and is expected to become the first in Asia to rank among the global top 10 pharmaceutical companies. Bristol-Myers Squibb (BMS) acquired Celgene for USD 74 billion on Jan. 3, 2019. The "new BMS" will continue to increase efforts in R&D of new oncology drugs, and is now in possession of two blockbusters for solid tumor, two blockbusters for blood tumor, and numerous R&D pipelines.
Acquiring firm | Acquired firm | Time | Amount ($) | R&D focus after merger |
Takeda | Shire | May 8, 2018 | 62 billion | Tumors, gastrointestinal diseases, and nervous system diseases |
Bristol-Myers Squibb
| Celgene | Jan. 3, 2019 | 72 billion | Tumors |
"The large-scale deals that have happened — and are happening — are about making sure that people can create category leadership," said Glenn Hunzinger, pharma deals leader at the pharmaceutical consulting organization PwC, in a report. Among all disease fields, oncology has the largest market, and scale is a requisite for staying at the top position of the field.
Most pharmaceutical enterprises lack the infrastructure required for rising to the top pharmaceutical enterprise rankings. According to an analysis, though R&D scale and infrastructure are attractive to pharmaceutical enterprises and medical supply distribution companies, BMS’ acquisition of Celgene for USD 74 billion will not necessarily cause more acquisitions.
"There is a misconception in the healthcare industry that once you see one or two really large mega-deals, that means you're going to see 10 more follow it," Omid Ahdieh, speaker of a healthcare services investment bank, said in Nov. 2018. Pfizer is one of the companies that will not follow; its CEO Albert Bourla said in 2018 Q3 call meeting, "We continue not to see the need for any large-scale M&A activity at this time."
And certainly, according to another analyst, the large-scale deals will stimulate other pharmaceutical enterprises to join M&A. Not long after BMS’ ac...
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