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Pharmaceutical M&A in the Asia-Pacific Region - India and China drive regional activity but Japan still dominates high value transactions

Expanding healthcare coverage in emerging Asia-Pacific markets, rapid economic growth and burgeoning middle classes are attracting foreign M&A as companies attempt to offset future losses from the looming threat of the 2011 "patent cliff" and slowing growth in major developed markets. As these markets develop, consolidation of the domestic industry is also driving M&A in the Asia-Pacific region.

Sluggish performance in the major pharmaceutical markets prompted by growing generic competition and increasing healthcare cost-containment are forcing companies to seek opportunities elsewhere. Massive populations, rapid economic growth and burgeoning middle classes make emerging Asia-Pacific markets particularly attractive to foreign companies.

Companies penetrating these markets often acquire local manufacturers and generics firms that provide a quick, cost-effective point of entry from which to later launch more expensive branded products. However, some Asia-Pacific countries are introducing or considering measures to protect the domestic industries from foreign domination.

Within the period analyzed in this report, the highest number of M&A deals involving APAC based companies was recorded in 2008. Strong recovery from the global financial crisis can be seen in late 2009. Furthermore, 2010 seems to be off to a good start, with a number of large deals involving APAC-based companies having been announced.

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