Middle-market M&A in the pharmaceutical sector has been at a steady, lukewarm pace, but four deals in May, according to The Deal Pipeline, could be a sign that midrange M&A activity may heat up in the coming months.
The focus in dealmaking in the pharmaceutical sector has been with themegadeals, which have totaled $156 billion in 2009, including Merck & Co.'s (NYSE:MRK) $41 billion acquisition of Schering Plough Corp. (NYSE:SGP). More large-cap deals are reportedly brewing. But the Federal Trade Commission will likely ask for concessions in the form of divestitures from these merging market leaders that will likely fall in the stratosphere of the middle market.
Mergers Unleashed notes that after Pfizer Inc.'s (NYSE: PFE) $64 billion deal for Pharmacia Corp. in 2003, the New York-based company was forced to realign its holdings and divest the following: oral contraceptives Estrostep and Loestrin for $197 million; hormone replacement therapy femhrt for $160 million; Schick-Wilkinson Sword shaving products business in a $930 million sale; and Tetra fish-care products business through a $238 million deal.
In the month of May so far, four midmarket healthcare/pharmaceutical deals have occurred, with the most recent being Novartis AG's (NYSE:NVS) acquisition of Ebewe Pharma's generic oncology injectables business for $1.2 billion on Wednesday, according to The Deal Pipeline. "The addition of Ebewe Pharma's leading portfolio of oncology medicines fits our strategy and improves our ability to help cancer patients around the world by providing easier access to therapies," said Novartis chairman and CEO Daniel Vasella in a statement.
Here's a closer look at the midmarket healthcare/pharmaceutical deals in May, courtesy of The Deal Pipeline.
May midmarket healthcare/pharmaceutical deals | ||||
| Acquirer | Target | Date | Price | Top drug of target |
| Novartis AG | Ebewe Pharma's generic oncology injectables | 5/20 | $1.2 billion | Paclitaxel, epirubicin, methotrexate, oxaliplatin, carboplatin, doxorubicin and gemcitabine. |
| Sciele Pharma Inc. | Victory Pharma Inc. | 5/17 | $150 million | Naprelan -- the only branded, once-daily sustained release formulation of naproxen sodium, a nonsteroidal anti-inflammatory drug. |
| Covidien Ltd. | Covidien Ltd. agreed to acquire Irish healthcare products maker Vnus Medical Technologies Inc. | 5/8 | $440 million | Medical devices devices for minimally invasive treatment of venous reflux disease, a cause of varicose veins that can result in leg pain, swelling, fatigue and skin ulcers. |
| Biovail Corp. | antidepressant Wellbutrin XL from GlaxoSmithKline plc | 5/6 | $510 million | antidepressant Wellbutrin XL |
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