Pharmaceutical Executive Digest Europe - February 25, 2009 - (Page 7) GSK: Where the smart money is Jacky Law explains why GlaxoSmithKline’s more cautious spending strategy could secure it a stronger future than its Big Pharma rivals. uying major assets is hard enough at the best of times. It doesn’t help when no-one has a real clue what they’re worth. Recently, I thought I’d capitalise on my cash that is earning virtually no interest in the bank to become an owneroccupier again. I found somewhere I liked but the estate agent, the probate valuation (someone had died) and a private assessment all came up with wildly differing figures. So when, from seemingly nowhere, a cash buyer came along offering the full asking price (the highest valuation by far), I started thinking maybe I should have acted a little faster. Pfizer’s $68 billion ( 53.7 billion) swoop on Wyeth seems to have had a similar effect in the market for large pharma companies. Not only do mega-mergers usually come in clusters (no-one likes to feel left behind), Pfizer’s move also entailed raising $22.5 billion ( 17.78 billion), thus demonstrating the credit markets are beginning to open up again. B Merck CEO Richard Clark was soon to be heard telling analysts he would consider a large M&A deal. Novartis then announced it was to raise $5 billion ( 3.95 billion) via a bond-issue, which started tongues wagging about what the cash might be used for. Sanofi-aventis is known to be scouting around for a deal, big or small. And Roche recently tried to speed up talks to buy the 44% of Genentech it doesn’t already own by lowering its bid. the pack because it is not taking the path of consolidation. Instead, it is using the downturn to seriously diversify its business, not only geographically but also in how it operates and what it has in its pipeline. In terms of developing new markets, for example, it announced in January it was spending $667.2 million ( 527 million) buying some of UCB operations in Africa, the Middle East, Asia Pacific and Latin America. While this is hardly a lot of money by pharma standards, it falls in line with a strategy that chooses to go it alone. Rather than bulk up with more of the same, the UK giant is, deal by deal, trying to build up a new kind of company centred around smaller, more focused business units, lots of new science and a wider presence across the globe. But the most interesting thing about GSK’s spending strategy is quite GSK stands out from the pack because it is not taking the path of consolidation. As these heavyweights sniff around the biopharm landscape doing their sums, they might, and probably do, speculate about what Pfizer could have bought for $68 billion had it not committed itself to one major purchase. GlaxoSmithKline (GSK) offers a clue (more on that later). It stands out from Table 1: GSK leads the pack when it comes to deal-making. Total deal value in 2008 – top 10 companies GlaxoSmithKline Genzyme Pfizer Bristol-Myers Squibb Celgene Astellas Pharma Takeda Johnson & Johnson AstraZeneca Eli Lilly Product Count 22 3 9 4 2 4 11 6 4 15 Deal Value ($m) 6,766 2,837 1,900 1,747 1,004 978 953 931 900 829 Upfront Payment ($m) 548 275 340 250 45 94 276 78 40 49 1 9 NEWS BIOFUTURES 2 11 FROM THE EDITOR / NEWS DIGITAL MARKETING 6 CALENDAR 7 JACKY LAW 13 ON THE MOVE SUBSCRIBE TO PHARM EXEC http://www.pharmexeceurope.com/europharmexec/newsletter/subscribeNewsletter.jsp
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Digest Europe - February 25, 2009 Pharmaceutical Executive Digest Europe - February 25, 2009 Contents From the Editor News Calendar Critical Vision Biofutures Digital Marketing On the Move Pharmaceutical Executive Digest Europe - February 25, 2009 Pharmaceutical Executive Digest Europe - February 25, 2009 - Contents (Page 1) Pharmaceutical Executive Digest Europe - February 25, 2009 - News (Page 2) Pharmaceutical Executive Digest Europe - February 25, 2009 - News (Page 3) Pharmaceutical Executive Digest Europe - February 25, 2009 - News (Page 4) Pharmaceutical Executive Digest Europe - February 25, 2009 - News (Page 5) Pharmaceutical Executive Digest Europe - February 25, 2009 - Calendar (Page 6) Pharmaceutical Executive Digest Europe - February 25, 2009 - Critical Vision (Page 7) Pharmaceutical Executive Digest Europe - February 25, 2009 - Critical Vision (Page 8) Pharmaceutical Executive Digest Europe - February 25, 2009 - Biofutures (Page 9) Pharmaceutical Executive Digest Europe - February 25, 2009 - Biofutures (Page 10) Pharmaceutical Executive Digest Europe - February 25, 2009 - Digital Marketing (Page 11) Pharmaceutical Executive Digest Europe - February 25, 2009 - Digital Marketing (Page 12) Pharmaceutical Executive Digest Europe - February 25, 2009 - On the Move (Page 13)
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