Business Development and Licensing Journal:

Issue number 10

As we go to press, the news about Abbott’s bid to acquire the pharmaceutical business of the Belgian company Solvay for $6.6 billion has just broken and another company name is subsumed in the tidal wave of mergers and acquisitions.

Strategically this acquisition strengthens Abbott’s European business and adds to the product portfolio making perfect sense. Interestingly, for those companies with only a peripheral interest in pharma this definitely seems the time to be making an exit as evidenced by the sale of Organon to Schering Plough last year and this summer’s divestment by Procter & Gamble of their pharma business.

So is this the end of diversification in pharma ? Possibly not. What goes around, comes around and whereas in the past major players such as Glaxo [and others] divested their generic interests [Evans Medical] now the major companies are busy acquiring generics businesses.

Of course M&A has been a well tried tactic of companies for many years and has successfully been used to distract the shareholder’s eye from difficult issues such as key product patent expiries or as is prevalent right now – negative growth. The key major company which managed so successfully on organic growth – Merck and Co has now also bought into the M&A tactic with its ongoing acquisition of Schering Plough.

Of course this is all very good news for Business Development people – each time companies merge there is a fall out of products and assets which keep us busy closing more transactions.

Plus ςa change, plus c’est la meme chose !

Sharon Finch
Editor

Contents:

The Development of Personalised Medicine
Loic Kubitza, PWC

Personalised healthcare is rising up the agenda of pharmaceutical and diagnostics companies and the growth of personalised medicine, which aims to better target treatments to patients, is expected to increase the number of alliances between diagnostic and pharmaceutical businesses. This trend is evidenced by Pfizer’s August 2009 collaboration with Abbott’s diagnostics division to develop a test to screen non-small cell lung cancer tumours for gene rearrangements. Pfizer has developed a novel investigational agent, PF-02341066, that selectively targets cancer-causing genes implicated in the progress of many cancers. The test will be used for patient selection for future clinical trials of the agent.

Survival of the Fittest: How the Financial Crisis Is Saving Big Pharma
Robert J. Easton, Catharine Staughton, Matthew Young, Scisive Consulting LP

For the last 25 years, biotechnology companies have been perceived as the likely evolutionary winners in the race for survival and prosperity in the drug industry. As the Credit Crunch has drastically altered the environment in which companies operate, the biotechnology business model now looks much less likely to supply the fat returns on capital and high P/E ratios that have historically been associated with companies supplying novel medicines.

So, who will the new winners be, and what strategies must they employ to thrive in these challenging times? In this article, Scisive Consulting examines six types of companies competing to be the fittest survivors and suggests some approaches to profiting from the opportunities resulting from tighter competition for investment funds.

Creating Value with Alliance Management
Arne Wörn PhD and Anthony A. Hörning, Novartis Pharma AG, Switzerland

Driving value is of the most fundamental aspects of any successful business. In today’s increasingly collaborative business environment, alliance management can play a key role in creating value. Novartis has developed a systematic framework for alliance value creation to share best practices and develop a proactive value-creation mindset in the organization

Difficult Negotiations with Difficult Negotiators
Andrew Gottschalk, Group AG

This article has been prompted by a group of business development executives in Singapore. We were discussing the concept of negotiating style and the recurring theme of the subsequent questions was “how do I negotiate with a difficult negotiator” by which the group agreed they meant the tough numbers or numbers tough style combination in Asia. The questioners worked for a European multi-divisional global company, Neptune, with an organisational culture that is a mix of the guided missile and the family with pockets of incubator cultures in their start-up businesses. Neptune has local affiliates throughout the Asia and in each market they have both wholly owned subsidiaries and joint venture operations. The members of the group were almost split evenly between European expatriates and locally recruited executives although this balance will shift towards a preponderance of local staff as corporate edicts on cost control and localisation are implemented over the next three years. The internal working language is “Offshore” English and this dominates until at meal times when the conversation moves to personal passions: football, eating and shopping. The difficult negotiations with a difficult negotiator were conducted in both English and the region’s national languages except when an expatriate was present that required the encounter to be wholly in English.

Pharma at the Crossroads - Choosing Directions in a Transforming Healthcare World
Stephan Danner, Roland Berger Strategy Consultant

Times are getting ever tougher for pharmaceutical companies. New registration procedures and the restructuring of healthcare systems are changing the industry and causing fiercer price competition. Many companies are being forced to radically rethink their business models. The Roland Berger study "Pharma at the crossroads – Choosing directions in a transforming healthcare world" analyses the trends and key issues for international pharmaceutical companies that focus on patented prescription drugs. The participating companies represent more than 50% of global drugs sales, and 20 out of the 30 largest pharmaceutical groups.

Back to top

Order this Issue