Unlike the large multibillion dollar takeovers in 2019, pharmaceutical mergers and acquisitions will likely be smaller in 2020, according to GuruFocus, an online publisher of market insights from investment gurus.
In 2019 the pharmaceutical industry saw several large buyouts, including Bristol-Myers Squibb's $74 billion purchase of Celgene, and AbbVie's plan to acquire Allergan in a cash and stock deal valued at $63 billion.
But next year, the industry will probably go after single drugs as "bolt-ons," according to Barry Cohen, an investment guru with 40 years experience in senior positions at large pharma companies, including Abbott and Bayer.
One example of a bolt-on, or relatively smaller deal, is Amgen's recent $13.4 billion acquisition of Celgene's psoriasis drug Otezla.
The trend toward these smaller purchases is a result of several factors, including that major pharmaceutical companies have seen slow growth or even a decline in stock prices as well as more antitrust scrutiny, according to the report. The threat of new competition and loss of patent protection also may contribute to the trend of smaller deals, Mr. Cohen wrote.
Read the full report here.
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