Christoph Bieri, Chair of IMAP’s Healthcare Industry Group, was invited to present at CPhi in Madrid this month, sharing IMAP’s insights into Pharma industry M&A drivers.
The event saw senior representatives and key stakeholders from all segments of the industry meeting to discuss evolving industry trends and hear exclusive views directly from important industry players.
Bieri began explaining why IMAP is in agreement with most industry observers that Pharma M&A is in an overheated Phase which will likely abate soon. However, as he elaborated, health system cost pressures on the industry are increasing and R&D costs have become prohibitively high. Thus IMAP anticipates a further streamlining and reorganization of the industry over the next decade, mainly through continuing M&A.
Bieri’s insights were unanimously well received. IMAP’s innovative “4 Strategic Archetypes Model” proved especially thought provoking to members of the audience and industry press alike. The model predicts that Pharma companies will be forced to choose between one of four strategies: Originators, generics (later biosimilars), point-of-call specialists and OTC marketers. It assumes that each archetype requires a distinct set of skills, culture and strengths, which to some extent are mutually exclusive. With many Pharma companies today still mixing archetypes, focusing on just one will be the fundamental M&A driver.
Turning to the implications for Pharma manufacturing, Bieri pointed out that Pharma companies, with the notable exception of generic drug providers, are realizing that in-house manufacturing is not a core competence. Outsourcing and in particular divestments of manufacturing units, combined with service contracts to buyer/operators are increasing.
Christoph Bieri, IMAP Healthcare Industry Group Chair summarized “Whereas in the past, Pharma was fully integrated and worked with many small CMOs, in the future we will see vertically disintegrated Pharma companies working with a tiered supply chain, following in the steps of the automotive industry”.
The full presentation is available by contacting Claire Smedley at IMAP.
Established in 1973 and present in more than 40 countries, IMAP consistently ranks amongst the top M&A mid-market advisors worldwide. With over 200 deals completed in 2014, IMAP’s sector expertise, dedicated professionals and cross-border collaboration continue to drive its differential value proposition globally. More information can be found at www.imap.com