The Recession and its impact on Pharamceutical M&A Activity

Expert analysis and detailed case histories illuminate the effect on, and activities of, pharmaceutical companies in the current economic downturn.

Additional Information

Expert analysis and detailed case histories illuminate the effect on, and activities of, pharmaceutical companies in the current economic downturn.

Mergers and, more commonly, acquisitions have long been popular in the pharmaceutical industry. Whether it has been to support flagging drug pipelines, secure IP on promising drug candidates or to quickly access new markets, the industry has for many years been characterised by a vibrant M&A culture. The current recession has, therefore, had a significant impact on the industry’s players, and in more ways than might be immediately obvious.

The limited availability of credit to fund - through share issue or capital loans - drug discovery programmes, has denied many development companies the ability to progress independently. At the other end of the scale, high-profile acquisitions have had to be funded from cash. The ability of companies to operate on this basis has been limited by the level of liquidity they hold and an increased awareness of the short-term benefits of revenue increase and cost savings.

Activity expands
The nature of the recession and the limited access to credit has sparked a round of mergers and acquisitions. Companies unable to secure the finance they need have been opportunistically targeted by those with the means to buy.