New Healthcare M&A Trend Emerging



Interesting Healthcare Business Activities

Vertex Pharmaceutical’s new experimental product that targets cystic fibrosis might potentially bring in $5 billion annually by 2018 when combined with its current product, Kalydeco. While a groundbreaking therapy, Kalydeco targets just a small part of the addressable cystic fibrosis market. The therapy generated 2013 revenues of about $317 million. The new product called, lumacaftor, has passed two Phase 3 clinical studies involving 1,100 patients in late June. A company spokesman said that Vertex would likely apply for FDA marketing approval by year-end 2014.

Pfizer and AstraZeneca

Pfizer’s final bid for AstraZeneca fell through in late May. After six months of back and forth discussions with officials from AstraZeneca, Ian Read, CEO of Pfizer decided to walk away from the nearly $120 billion takeover deal. His final offer was 55 pounds per share. Apparently, AstraZenca wanted a higher share prices in the 58 to 59 pound per share range. This proposed deal was hailed throughout the industry as the largest pharma M&A deal seen in the UK to date. Pfizer management hoped to move its HQ site to the UK to save on tax costs and garner some new cancer drug pipelines. Eventually, Pfizer will need to do something to increase its market status such as sell off some of its businesses or try to acquire another suitable target pharma.

AbbVie deal with Shire Pharma

Managers at AbbVie entered into discussions with Shire Pharma, UK drug maker to acquire the company. A key part of its M&A plan was to buy Shire, develop synergies, move its head office to the UK location, and for global expansion. The deal might happen in July or August, or not.

Walgreens and Alliance Boots

Another healthcare firm, Walgreens wants wants to acquire UK firm Alliance Boots to expand its drugstore business into the UK and other European market. A feature of this unfolding deal also include moving Walgreens’ home office to the UK to save on tax income taxes.


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