Already one of the biggest segments of the healthcare industry, the pharmaceutical sector continues moving with greater numbers of mergers and acquisitions. While we have seen movement up and down in rankings, and increases and decreases in revenue, the total revenue of the Top 50 pharmaceutical companies remains relatively the same at $821 billion in 2014, vs. $823 billion in 2013.
What will be worth watching this year is the results of these M&As, as cultures combine and new strategies are engaged. Some of the significant ones from 2014 include: Actavis/Forest Laboratories & Allergan, Merck/Cubist, Roche/InterMune, Mallinckrodt/Questcor,Nestle/Galderma. And of course, we have to wonder about the impact of the failed attempts with Pfizer’s bid for AstraZeneca or AbbVie’s cancelled merger with Shire.
Bloomberg Business says “The contest is driving premiums to record highs, with buyers able to take advantage of cheap financing to raise additional cash for knockout bids. It’s also leading bidders to take a chance on drugs that haven’t yet been fully cleared for use, such as Salix’s biggest selling drug Xifaxan, which is yet to receive secondary approval from the U.S. Food and Drug Administration as a treatment for irritable bowel syndrome.” It points to an interesting landscape for 2015.
Here’s a snapshot of the Top 50 (based on revenue) today. Companies are ranked by their 2014 revenue as furnished by their annual reports and publicly available sources Edgar and Morningstar stock information websites (figures of non-U.S. companies were converted to U.S. dollars from various currencies using end of the year exchange rates for 2014 and 2013).