Pharmaceutical/Biotech Mergers & Acquisitions Expected to Continue

I ran across this interesting article about a significant trend in the pharmaceutical and biotech industry.

Bloomberg Article

In a nutshell, drug makers are shifting their focus from cutting costs to filling pipelines through mergers and acquisitions. Next year could top the 2,076 deals worth $166 billion announced in the past 12 months. “What tends to drive that is the need. There’s clearly a need for larger companies who are facing patent cliffs and whose own R&D machines have not panned out, to find growth.?

The extremely high cost of bringing new drugs to market is one of the primary factors for this increase in partnerships, mergers and acquisitions in healthcare. The chart below shows the spending for top 10 firms and represents a whopping $66 Billion annual investment.

Research Spending Per New Drug

Company Ticker # of drugs approved R&D spending per drug ($M) Total R&D Spend 1997-2011 ($M)
AstraZeneca AZN 5 11,791 58,955
GlaxoSmithKline GSK 10 8,171 81,708
Sanofi SNY 8 7,909 63,274
Roche Holdings AG RHH 11 7,804 85,841
Pfizer, Inc. PFE 14 7,727 108,178
Johnson & Johnson JNJ 15 5,886 88,285
Eli Lilly & Co. LLY 11 4,577 50,347
Abbott Laboratories ABT 8 4,496 35,970
Merck & Co. Inc. MRK 16 4,210 67,360
Bristol-Myers Squibb Co. BMY 11 4,152 45,675

Sources: InnoThink Center For Research In Biomedical Innovation; Thomson Reuters Fundamentals via FactSet Research Systems

Cost cutting can only go so far before it negatively affects the growth of any company. Since 2000, the pharmaceutical industry has cut 297,650 jobs, according to consulting firm Challenger, Gray & Christmas. These companies are finding that a shift from cutting costs to making agreements can more effectively help build product lines.

Nearly half of today?s top-selling drugs are the result of partnerships. Companies that excel in business development and alliance management position themselves to win new deals. Those organizations that show a penchant for successful collaborations will attract other companies looking for strong allies ? in the process filling critical portfolio holes and penetrating exciting new markets.

A major challenge with business development and alliance management are the majority of pharmaceutical and biotechnology companies today have legacy CRM tools or home grown systems that have not been able to keep up with this rapid pace of change in the market. These traditional and legacy solutions have become much too inflexible and too costly to maintain, leaving pharmaceutical companies in the unenviable position of overspending every day on solutions that no longer meet their business requirements.

Infinity has developed the Infinity iPartner platform that is designed for the pharmaceutical and biotechnology partnering life cycle. Infinity iPartner puts everything in one place for your teams to track and coordinate the finding, partnering, deal management, obligations, payments, milestones and other key activities required for managing an increasingly complex network of partners. All on a modern and highly flexible platform that is easier to use and maintain than existing systems and processes.


To learn more about Infinity iPartner powered by Microsoft Dynamics CRM, contact us today.

Sunshine Act Update – September 2012


Back in December of last year and May of this year I wrote a couple of blog posts about the Sunshine Act compliance deadlines and extensions communicated by the Centers for Medicare & Medicaid Services (CMS).

If you?ve been wondering what?s happening with the final decision on Sunshine Act deadlines, you are not alone.

Sen. Richard Blumenthal (D-Conn.) was quoted this week criticizing the still vague time frame of when CMS expects companies to start reporting (sometime in 2013 is still the official answer). See article in Modern Healthcare.

So no details yet, however, the law requires allowing 90 days for the companies to prepare and the collection of data through the next January before reporting it publicly in March.

Infinity attends a lot of healthcare, pharmaceutical, biotech and medical device events and we hear there are quite a few organizations that don?t have a system or process in place yet. There is a little time left but we advise organizations to be ready for this as soon possible. Let us know if you need help.