The US pharmaceutical sector is made up of different areas geared toward the development, production, and marketing of drugs. These areas include drug manufacturers, drug marketers, and biotechnology companies.
Mergers and acquisitions in 1Q17
Mergers and acquisitions (or M&A) in the US pharmaceutical sector in 1Q17 included the following:
- On March 31, 2017, Johnson & Johnson’s (JNJ) Swiss-based subsidiary, Janssen Holdings, announced the successful completion of its Actelion tender offer. In January 2017, JNJ had announced its agreement to acquire Actelion, a biopharmaceutical company.
- On March 22, 2017, Merck Animal Health (MRK) acquired Vallee, a Brazil-based animal health company.
- On March 1, 2017, Eli Lilly and Company (LLY) completed its acquisition of CoLucid Pharmaceuticals.
- On March 1, 2017, GlaxoSmithKline (GSK) announced the closure of its divestment of its anesthesia portfolio, excluding the US and Canadian markets, to Aspen Pharmacare. The deal size was $180 million, with milestone payments of up to $100 million.
- On February 27, 2017, JNJ completed its acquisition of Abbott Medical Optics, a subsidiary of Abbott Laboratories (ABT), in an all-cash transaction. The deal size was $4.3 billion, and it included ophthalmic products from the cataract surgery, laser refractive surgery, and consumer eye health areas.
- On January 19, 2017, Zydus Cadila, an Indian pharmaceutical company, acquired Sentynl Therapeutics, a San Diego–based specialty pharmaceutical company. This deal marked the entry of Zydus Cadila into the specialty prescription segment of the US market.
- On January 4, 2017, ABT completed its acquisition of St. Jude Medical to strengthen its medical devices business.
- On January 3, 2017, LLY’s subsidiary Elanco US acquired Boehringer Ingelheim Vetmedica’s feline, canine, and rabies portfolios for the US market. The acquisition included eight new product lines along with a fully-integrated manufacturing and research and development site.
- On January 2, 2017, Sanofi Pasteur, Sanofi’s (SNY) vaccines business, ended its joint venture with Merck Sharp & Dohme (or MSD). The companies will pursue the vaccines business separately in European markets. MSD is Merck & Co.’s business outside the United States and Canada.
To divest risk, investors can consider ETFs such as the iShares U.S. Pharmaceuticals ETF (IHE), which invests in different pharmaceutical companies.