Sector News

Pharma: 2016 will be 'the year of merger mania,' PwC says

December 14, 2015
Life sciences

This year has so far been a huge one for healthcare deals–but just wait, a new report says. 2016 will be “the year of merger mania.”

According to the annual report from PwC’s Health Research Institute, in 2016, “high-profile” mergers and acquisitions are likely to continue.

But does that mean industry watchers should expect to see more transactions in the Pfizer-Allergan vein, which saw two hulking pharmas agree to a merger pact? Not necessarily.

“Drug companies are looking beyond traditional M&A by acquiring ‘beyond-the-pill’ products and services to bolster their portfolios and pipelines,” PwC notes. Take Teva, for example, which recently nabbed Massachusetts’ Gecko Health Innovations. The so-called smart inhaler company boasts a hardware and software system that connects patients, caregivers and doctors to help improve patient adherence, and that’s technology the Israeli pharma wants to help keep people taking their respiratory meds.

Teva’s not the only one looking outside the box to grab a competitive edge. Companies are experimenting with all sorts of digital strategies, including mobile apps, devices and text messaging, to boost adherence.

And that’s a good thing for companies trying to clear antitrust hurdles, PwC points out–especially for a company such as Teva, which competes in the rapidly consolidating generics business: “Regulatory scrutiny will only heighten as consolidation continues, and those who go to market in unconventional ways may be better positioned to address it.”

Meanwhile, companies are still helping the sector post a banner M&A year in 2015; global activity in the pharma, medical and biotech spheres over the first three quarters of this year hit its largest-to-date value since at least 2001, Mergermarket said in October. Over that period, the industries turned out 954 transactions worth $367.6 billion.

> Read the report

By Carly Helfand

Source: Fierce Pharma

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