Deal-making Declines by 18% in a Year as Pharmaceutical Companies Tighten Their Belt

OXFORD, England, January 25, 2012 /PRNewswire/ --

Overall pharmaceutical deal-making activity fell by 18% in 2011 as pharmaceutical companies cut R&D expenditure and streamlined their research and development activities, according to research conducted by the UK advisory firm PharmaVentures.

According to a review of PharmaVentures' PharmaDeals^® database, licensing deals fell by 16% while the most sought-after assets commanded sizeable premiums in 2011. In contrast, M&A activity remained robust in 2011 and M&A deal values actually rose by 30%, although contingent payments were commonplace.

The research reveals that oncology based deals continued to dominate the landscape with Roche being the most prolific deal-maker.

Fintan Walton, Chief Executive of PharmaVentures said: "These results are consistent with our own observations gained through our deal-making activities on behalf of our international clients. Our industry is undergoing a rapid and major transformation driven by declining R&D productivity and blockbuster drugs coming off patent. However, with quality assets commanding higher premiums there is still a significant opportunity for great deals to be done."

Emerging markets remained at the top of the deal-making agenda for many of the major pharmaceutical companies in 2011. Faced with declining sales growth in Western markets, these companies are looking to exploit the substantial opportunities that emerging markets, and India and China in particular, provide. AstraZeneca, for example, moved to strengthen its position in China in December 2011 by agreeing to acquire Guangdong BeiKang Pharmaceutical, a manufacturer of generic injectable antibiotics. Other big pharma companies went down the joint venture route in 2011 with Bayer HealthCare partnering with Zydus Cadila to establish a sales and marketing joint venture in India, and Merck & Co. following suit by creating a large-scale joint venture with Sun Pharmaceutical Industries to develop and commercialise novel combinations and formulations of branded generics in emerging markets.

PharmaVentures' research drew on its PharmaDeals database (http://www.pharmadeals.net), which follows, analyses and records deals world-wide and contains over 43,000 deal records.

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About PharmaVentures

PharmaVentures (http://www.pharmaventures.com) is an international healthcare advisory group providing leadership in all aspects of deals and alliances, from strategy formulations to implementation. The company occupies a special position in the global marketplace because of their track record of successful outcomes, resulting from their unique insight into the world of deal-making, their internationally recognised analytical and valuation capabilities, their own proprietary deal-making database PharmaDeals^® (http://www.pharmadeals.net), containing over 43,000 deal records, and their extensive business relationship network and our outstanding success in M&A transactions.

Over the years PharmaVentures has built considerable experience in the M&A field including the divestment of manufacturing and R&D businesses most of which have led to both the protection and the creation of jobs.

Their services cover:

• Valuation (for licensing, acquisitions, divestments, fund raising & expert testimonies)
• Licensing (in and out licensing)
• M&A (companies & assets)
• Strategy (commercialisation, deal strategy, due diligence, market entry)
• Expert Testimony (patent infringement, deal disagreements, taxation, determining damages)

Now in its 20th year, PharmaVentures is based in Oxford, UK, and employs over 30 people.

PharmaDeals® and PharmaVentures® are registered Trade Marks of PharmaVentures Ltd.

For further information, contact:

Dr Fintan Walton, Chief Executive, PharmaVentures
+44-1865-332700
fintan.walton@pharmaventures.com