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Acquiring pharmaceutical industry assets in the UK: 1 + 1 = 1?

Kanavos, Panos and Angelis, Aris (2014) Acquiring pharmaceutical industry assets in the UK: 1 + 1 = 1? Pharmaceutical Medicine, online. ISSN 1178-2595

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Identification Number: 10.1007/s40290-014-0066-2

Abstract

The recent AstraZeneca takeover bid from Pfizer puts pharmaceutical R&D once again on the public agenda. Three pertinent questions are (a) what can be expected from this acquisition, (b) what are the implications for the UK economy and science base, and (c) whether such a deal should go ahead. Although the key driver behind this acquisition would be an improvement in company performance and shareholder value, past evidence suggests that mergers and acquisitions (M&A) of large pharmaceutical companies imply a neutral net effect on productivity, if not a decline, with employment decreasing and R&D spend following a similar trend. Similarities between the two companies include dropping sales; however, relative to its size, AstraZeneca has a more promising R&D pipeline, especially in therapeutic areas where Pfizer’s strength is currently limited (e.g. oncology). Ensuring a portfolio diversification would make Pfizer’s takeover proposal a knight’s one, but history points towards a knave-like behavior.

Item Type: Article
Official URL: http://link.springer.com/journal/40290
Additional Information: © 2014 The Authors
Divisions: European Institute
Social Policy
LSE Health
Subjects: R Medicine > RS Pharmacy and materia medica
Sets: Departments > European Institute
Departments > Social Policy
Research centres and groups > LSE Health
Research centres and groups > LSE Enterprise
Date Deposited: 15 Oct 2014 09:38
Last Modified: 20 Mar 2019 02:29
URI: http://eprints.lse.ac.uk/id/eprint/59771

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