PwC calculates the newest numbers in their quarterly report. The total volume of M&As in the 2nd quarter of 2016 amounted to 80 billion US Dollars. Those are spread 50:50 between Pharma, Biotech and Medical Devices and Diagnostics. The lion’s share of the latter certainly makes the medical devices industry with $ 35 billion. Making it the highest volume in that quarter. What stands out is that the number of deals for the related areas pharma / biotechnology is with 56 considerably higher than the number for medical devices / diagnostics (27). This can certainly be explained with the mega deal of Abbott that will buy St. Jude Medical. Abbott is expected to pay $ 30 billion and wants to strengthen their cardiovascular portfolio with that deal.
To stay with the medical devices industry, other multi-billion dollar deals in recent years were the acquisition of Synthes by Johnson & Johnson, Medtronic bought Covidien and Zimmer acquired Biomet.
According to what analysts say the next arena could be in another product group. Spine Device companies. Good growth and positive business numbers are seen as the signal. Names mentioned in that respect are for example Zimmer Biomet or NuVasiv.
What is also interesting, is the opinion of medical device investment experts when looking at the future. Here also, the topic personalized medicine and the need to establish a higher value of your own technology on the market has an influence. This could result into a decreasing number of new deals. Companies see more potential to profit from these developments by seeking out cooperations and partnerships with universities, research groups or medical centers. The principle of growing through M&As though will not discontinue.
Some takeovers can have immense implications for different operational business units. Say, there is a new production site involved. In an industry as highly regulated as Life Sciences it can be a great challenge to merge two completely different quality management systems. Besides project management and coordination of this one time mammoth tasks, immense workload lies in documentation. Often impossible for maybe already understaffed workforce to handle.
As usual in such cases, our freelancers can be the perfect short-term solution to cover this peak. They have years and years of experience in that field and don’t need training to be able to get to work.
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