M&As to push 2014 sales to $381 billion

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Pharmaceutical Technology Europe

M&As remain an integral part of Big Pharma's strategy and will contribute almost two-thirds of peer set sales growth up to 2014, according to market analyst Datamonitor.

M&As remain an integral part of Big Pharma's strategy and will contribute almost two-thirds of peer set sales growth up to 2014, according to market analyst Datamonitor. The analyst firm believes that M&As are a long-term feature of the pharma industry and have played a key role in shaping the structure and composition of today's leading companies.

The last decade has seen a wave of major M&A activity, from the creation of AstraZeneca and GlaxoSmithKline to the merger of Pfizer and Wyeth, and Merck and Schering-Plough. To quantify how much sales growth has been driven by M&A versus how much has been self-produced through organic growth, Datamonitor analyzed a 20-year sales dataset comprising 14 years (1995–2008) of company reported sales and 6 years (2009–2014) of forecast data.

Big Pharma's sales were $84 billion in 1995 and, based on organic growth only, are forecast to increase to $195 billion by 2014; however, M&A activity is expected to lift 2014 sales to $381 billion. Therefore, during 1995–2014 M&A activity is expected to account for 63% of absolute growth. Datamonitor also believes that the mergers will help Big Pharma to maintain its share of the total prescription pharma market.

www.datamonitor.com

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