Big Pharma conclude M&A is not the new R&D

Big Pharma conclude M&A is not the new R&D

World leaders meet at the illustrious NGP Summit in Florida to face up to economic woes.

October 29, 2009 12:00 by Aarti Nagraj

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With large firms seeking synergies to drive down R&D costs, M&A deals can aid in the transfer of technical knowledge, scalability and reduce time to market. However, previous M&A periods have not alleviated the productivity crisis. While short term gains emerge from these deals, in the mid to long term, R&D innovation, organic growth, and internal drivers are still key facet’s behind creating a successful company and providing an organization with sustainability.

The debate rages on at the NGP Summit (currently being held in Florida) where visionaries such as Jeffery Nye, Chief Medical Officer at Johnson & Johnson, Reinilde Heyrman—VP of Clinical Development at Daiichi Sankyo, Oscar Laskin—VP of Early Development at Celgene are leading the debate, joined by Ann Wang—VP of Clinical Operations at Human Genome Sciences who have recently seen a surge of 277 % in their stock price owing to the continuing success of their ‘Benlysta’ drug.

The NGP Summit clearly illustrates that the pharmaceutical and biotechnology industry is in a state of transition. M&A, reorganization, consolidation, and portfolio changes are being evaluated in order to maintain growth centers in the face of a myriad of serious challenges. Companies such as Millipore, Definiens and PPD were called by the committee to share their thought leadership amongst over fifty of the worlds ‘big Pharma’ leaders.

“The willingness for the industry to unite in such a way clearly demonstrates long-term strategies for improved business processes so long-term investment in R&D can be secured”. Drew Contessa – NGP Director

Various economic pressures have triggered yet another wave in M&A deals in the industry as companies seek to bring in new assets, capabilities and infrastructures and redesign their organizations going forward. But is this sustainable for long-term growth? The fifty strong committee are set to rejoin at the NGP in April 2010 to review.