Pharmaceuticals. (Industry Watch).
Pharmaceuticals: Lower company earnings could set off a new wave of
mergers and acquisitions in the pharmaceutical industry. Patent
expirations, fewer new drugs on the market, and moves to lower or
stabilize pricing from government bodies have put pressure on
pharmaceutical earnings. Bristol-Myers Squibb, Merck and Eli Lilly are
all expected to report disappointing results for this year.
Bristol-Myers is widely considered the most likely takeover target.
Companies considering the possible acquisition include Novartis,
Pharmacia, GlaxoSmithKline and Wyeth. More merger and acquisitions could
also be on the way for biotech companies with Celltech topping the list
of potential acquisitions. But any merger or acquisition among big
pharma will have to overcome a number of potential problems. The deals
could face antitrust regulations due to the chances that one company
will dominate a certain category of therapeutics. Investor sentiment,
concerns about larger research operations, thin product pipelines among
possible acquisition targets, and issues involving personnel could also
deter such deals.
Source: Financial Times