With M&A 'fever' gripping the pharmaceutical sector, this week's FirstWord List revisits the 20 largest acquisitions and mergers, and assesses how they have shaped the industry today.
As numerous industry commentators have cited in recent weeks, Pfizer's shadow is cast dominantly over pharma's M&A landscape.
The company has undertaken three of the five largest acquisitions/mergers in pharma, with its potential purchase of AstraZeneca set to be the most expensive acquisition of them all.
Creation of AstraZeneca itself occurred as a result of the industry's seventh largest deal (the merger of Astra and Zeneca in 1999) with the mid-to-late 1990s proving to be a significant period of consolidation in the sector.
This phase began with the creation of Glaxo Wellcome (subsequently to form GlaxoSmithKline with SmithKline Beecham in 2000) and Novartis (merger of Ciba-Geigy and Sandoz) and culminated in the acquisition that continues to have ramifications on the sector today – Pfizer's purchase of Warner Lambert.
How things may have been different. A year prior to the deal, Pfizer's then CEO William Steere had played down the benefits of mergers, suggesting they were a sign of weakness. However, Warner-Lambert's efforts to merge with Wyeth (then American Home Products) – a move that threatened Pfizer's co-promotion agreement for Lipitor – necessitated a quick re-evaluation on Steere's part.
The thought of an alternative pharma universe – one where the Pfizer-Warner Lambert deal never occurred – is an intriguing one, as are the rumours (recently cited by ex-Pfizer head of R&D John LaMattina) that Pfizer and GlaxoSmithKline discussed a merger in the early 2000s. It is with no little irony that legend suggests these negotiations broke down as Pfizer was unwilling to relocate its headquarters to the UK.
Should Pfizer complete a deal to acquire AstraZeneca, it will be one of a handful of deals that break into the industry's largest 20 during 2014. These include Actavis' proposed acquisition of Forest Laboratories and the deals that will see Novartis acquire GlaxoSmithKline's oncology business and Bayer acquire Merck & Co.'s consumer healthcare unit; transactions that are widely credited as a new found alternative to traditional large-scale M&A.
A deal for AstraZeneca would signal Pfizer is now the exception rather than the norm; as LaMattina notes – it is "the shark that cannot stop feeding."
Recent analysis of Pfizer's AstraZeneca pursuit:
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