Middle-market M&A in the pharmaceutical sector has been at a steady, lukewarm pace, but four deals in May, according to a report, could be a sign that midrange M&A activity may heat up in the coming months.
The focus in deal making in the pharmaceutical sector has been with the megadeals, which have totaled $156 billion in 2009, including Merck & Co.'s $41 billion acquisition of Schering Plough Corp. More large-cap deals are reportedly brewing. But the Federal Trade Commission will likely ask for concessions in the form of divestitures from these emerging market leaders that will likely fall in the stratosphere of the middle market.
Mergers Unleashed that after Pfizer Inc.'s 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.