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Big Pharma M&A Analysis to 2012 |
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Business Reports -
Market Report
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Big Pharma M&A Analysis to 2012 - Surveying the growth rate landscape
With sales growth rates expected to fall below their historic levels, Big Pharma must act to bolster its performance out to 2012 if it is to maintain the investment community's valuation of its stocks. One mechanism for plugging the sales growth rate gap and fulfilling investors' 'growth imperative' is M&A activity.
Big Pharma is facing a 'growth gap' between its historical sales performance and its 2007/12 outlook. If it is to maintain its historic level of valuation in the eyes of the investment community, this must be filled. M&A stands out as a possible mechanism for achieving this.
However, the shear scale of gap means there are limited opportunities available for companies to do this. Indeed, the companies with the bleakest outlook have only a small selection of targets that will lift them to a positive sales growth rate throughout the forecast window.
Despite this, there is a definite grouping of four companies (Gilead, Genzyme, Biogen Idec and Cephalon) that offer universal uplift benefits to potential Big Pharma suitors. Moreover, these companies have companies strategic profiles suggest they could bring further benefits beyond growth.
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