In this 2013 Life Sciences Trends Report, we understand it is important to know who you are, define the strategy, and align your operations and actions. The challenges and opportunities facing the life sciences industry have changed very little in the last five years: drug pipelines and R&D spend continue to shrink, growth has shifted overseas, generics continue to increase competitive pressure, and the regulatory environment continues to evolve. However, it is t those companies who are able to define who they are and align their business around their core strengths that will emerge as leaders.
Mergers and acquisitions are not going to slow down in 2013 for the industry; spinoffs are also on the rise as companies continue to refine their portfolio of products and define who they are as a business. However, the era of the megamerger has been left behind; instead, more targeted, precise acquisitions will take place. Over the last year the industry has seen some big spin-offs: Abbott Laboratories and its spin-off AbbVie; Pfizer and the animal health business Zoetis, and Pfizer’s sale of its Nutritional business to Nestle; expect to see more mergers, acquisitions, and divestitures as life sciences companies refine and execute their strategies.
Companies will continue to define whether they will provide a diversified portfolio of products, addressing markets from cradle to grave, or maintain a core group of products, addressing a specific sub-segment and spinning-off non-core business to drive greater shareholder value and more efficiently run businesses. Strategic partnerships will be a key part of both these strategies and will require that companies focus on the right opportunities that will provide the most financial and strategic value.
Align Strategy with Action
- When considering partners or acquisition targets consider the value they provide in expanding the core therapeutic product portfolio, or the opportunity to enter into new markets.
- Align the integration strategy or partnership agreements with the original acquisition or partnership strategy. Achieving the quantifiable benefits originally desired will depend on this alignment.
- Don’t underestimate the value of cultural alignment, corporate values, and the importance of tracking success metrics.
- Shareholder value should increase through acquisition, partnerships, or divestiture of assets.
- Define, measure, and refine the desired outcomes of each deal through negotiations and execution.
- Frequently revisit success metrics during integration to ensure expected outcome.
To read more about the life sciences industry trends, click on the PDF below.