Deal Capsule: Transactions in Pharmaceuticals - Q3 - 2015

Deal Capsule: Transactions in Pharmaceuticals - Q3-2015

KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Hot’ in pharmaceuticals.


Deal Focus Areas

Acquirers are struggling to find available assets for sale and are thus encroaching on assets not yet on the selling block. Deal activity in the sector was spread across therapy areas, while consolidation in generics continues. Orphan drugs and immunotherapy are also witnessing significant investments. US remains the most active country with more than half of the top 10 deals involving US targets.

Unsolicited bids are dominating the landscape: In September, Mylan N.V. launched a $34.1 billion formal offer to the shareholders of Irish over-the counter (OTC) and generics drug maker, Perrigo Company PLC. The offer was rejected by the board primarily on grounds of under-valuation.

Consolidation in generics continues: Following the withdrawal of its $43 billion bid for Mylan N.V., Teva Pharmaceuticals Industries Ltd. announced the acquisition of the generics business of Allergan PLC for $40.5 billion.The combined business would account for 20% of the global generics market.

Immunotherapy attracts significant investments: Celgene Corp. is actively acquiring assets to diversify within immunotherapy and to build upon its growing expertise in inflammatory bowel disease (IBD). In Q3 2015, it acquired immune disorders specialist, Receptos Inc., for $7.2 billion, in particular their receptor modulator, Ozanimod.

Focus on orphan drugs increases: Shire PLC announced a $30 billion conditional, unsolicited takeover of orphan drug maker Baxalta Inc., a recent spin-off from Baxter International Inc.. Shire has been building its rare disease business through acquisitions, as it diversifies beyond its best-selling ADHD drug, Vyvanse. It had already acquired NPS Pharmaceuticals Inc. in Q1 2015. Beyond the rare disease portfolio specialized in blood and immune system, Shire would also get access to Baxalta’s biosimilar drugs.

Capital Index

All pharma indices declined noticeably in the last month of Q3 2015. The stagnating growth in China, the US-political uncertainty as well as the recent unfavorable press in the US regarding drug pricing are contributing factors.


Due to quality issues at certain Indian plants, the FDA halted Indian shipments to the US for a variety of drugs. As a counter measure, Indian firms are acquiring US targets to gain US based production facilities.


In Q3 2015, domestic deals dominated M&A activity in China. The largest completed domestic deal was Zibo Wanchang Science & Technology Co. Ltd.’s $2.4 billion acquisition of 99% of the shares of Xiamen Bioway Biotech Co., Ltd.

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