Pharmaceutical industry facing an intense period of acquisitions – Mergers possible in Serbia too

The pharmaceutical industry is facing an intense period of mergers and acquisitions in the years to follow, although the companies Pfizer and Allergan have recently failed to merge, showed the research carried out by consulting company EY (Ernst & Young).

- We are going to witness a high level of investments and sales in the pharmaceutical industry in the years to follow – said Gerd Stuerz, analyst at EY.

In April, Pfizer and Allergan gave up their attempt at a merger worth USD 160 billion, which would have created a new world leader of the pharmaceutical industry, even going ahead of the Swiss giant Novartis. The merger failed because the American authorities make great efforts to stop company mergers, which are often a way to avoid paying taxes.

Nevertheless, this will probably not mark the end of a wave of important mergers in that industry, says EY.

- Companies will sell out entire departments or buy new ones in order to strengthen their positions – said expert Siegfried Bialojan.

The best option for many companies facing heavy competition is to realize growth through outside reinforcements.

- Pharmaceutical groups can present innovations quickly only if they buy some abroad – stated Bialojan.

Following 2014, in which many records were set in the area of mergers and acquisitions in the pharmaceutical industry, 2015 could have proven even more successful if the merger between Pfizer and Allergan had been successfully realized. Bialojan estimated that the total market value of agreements on mergers and acquisitions could soon reach around USD 200 billion annually.

The World

A multitude of important agreements have been signed in the past years. After the unsuccessful purchase of Allergan, Pfizer has recently announced its plans for buying Ancor Pharmaceuticals, which specializes in eczema medications, for over USD 5 billion. It has also shown interest in Medivation, a biotechnological company with headquarters in California, specialized in treating carcinoma. French group Sanofi and the American Amgen have also shown interest in this company.

In the USA, Abbott Laboratories and St. Jude Medical, leading manufacturers of cardiology equipment, announced a merger worth USD 25 billion in order to focus on the ever-growing problem of cardiovascular diseases in the elderly.

The German pharmaceutical and chemical products giant Bayer, on the other hand, offered USD 62 billion for the American Monsanto, which has declined the offer for now.

Possible mergers in Serbia

Mirjana Vucicevic of the Association for Pharmaceutical and Medicinal Economy as the Chamber of Commerce and Industry of Serbia says for eKapija that a multitude of important agreements have been signed in the past years, but that the intensive period of mergers and acquisitions is yet to come in the years to follow.

- I consider it a good way towards better business activities and investments in the pharmaceutical industry – says Vucicevic.

While waiting for the new players on the market, the issue that Serbia is facing concerns the former giant Galenika. According to the latest info, the application deadline for the tender for the purchase of the 25% share of this company has been extended again to July 27, when it will be seen whether this could be one the biggest acquisitions within the pharmaceutical industry of Serbia.

Until then, it remains to be officially confirmed whether Hemofarm will take over the company Ivancic i sinovi, which has been discussed since last year.

Ernst & Young d.o.o. Beograd

Pfizer Beograd

Actavis Beograd

NOVARTIS PHARMA SERVICES INC BEOGRAD

Sanofi Aventis d.o.o.Beograd

Predstavništvo Abbott Laboratories GmbH Beograd

St. Jude Medical Balkan d.o.o. Beograd

Udruženje za farmaceutsku i medicinsku privredu PKS

Privredna komora Srbije

Galenika a.d. Beograd

eKapija

EY

Ernst Young

Pfizer

Allegan

Gerd Stuerz

Novartis

Siegfried Bialojan

Ancor Pharmaceuticals

Sanofi

Amgen

Abbott Laboratories

St Jude Medical

Monsanto

Nirjana Vucicevic

Association for Pharmaceutical and Medicinal Economy CCIS

Chamber of Commerce and Industry of Serbia

Galenika

Ivancic i sinovi