Pharmaceutical Industry Opportunities for Pharmaceutical Companies in Emerging Markets Still Limited

Editor: Dominik Stephan

Although there is a broad consensus that growth in the pharmaceutical industry will most likely come from the emerging markets, the opportunities for deals and acquisitions are limited. A recent report highlights the major trends for "Big Pharma"...

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(Picture: PROCESS India)

Transaction, deals and acquisition in the pharmaceutical industry boom: In 2011, the industry saw 504 transactions with a total transaction value of US $90 billion, IMAP’s Global Pharma & Biotech M&A Report 2012 shows. Especially the US $ 100 million to US $ 1 billion size range grew compared to 2010, analysts say.

The majority of these deals – 182 transaction – involved targets in North America, 115 in Western Europe, and 104 in China, with a further 16 in Latin America. Most cross–national deals involved partners in Europe and North America, while in contrast only six of the numerous transactions in China involved foreign buyers.

“As Pharmaceutical Industry Hopes for Emerging Markets, Deal Opportunities Are Limited”

“There is consensus that future growth in the Pharma Industry will mainly come from emerging markets. However, acquisitions in these markets remain difficult for Big Pharma due to lack of suitable targets and government and regulatory constraints” said Christoph Bieri, who was elected Chairman of IMAP’s Healthcare Industry Group during the partnership’s Global investment Summit in Beijing this past March. “China in particular is expected to deliver explosive growth. The Chinese market alone will add almost half of the growth to the global industry in the next five years.”

Report Highlights the Trends for "Big Pharma"

The Chinese market is, nevertheless, not easy to access – even for Big Pharma, as IMAP China describes in the report’s special section about the Chinese Pharma market: The advisors witnessed a trend by “Big Pharma” companies towards other emerging markets, and expect a number of cross‐border deals in India and an increase of inbound M&A activity in Latin America.

According to IMAP, another big trend for the pharmaceutical industry would be cost synergies, access to innovation and candidate products, and break‐ups and spin‐offs to drive mid‐term deal flow.

More about India's booming pharma market? Read also "India's Pharmaceutical Market Growths Quickly"