The life sciences industry is currently facing unprecedented turmoil. Peter Muller of Schlafender Hase outlines five trends pharma companies will need to weather in 2017, and the considerations needed for smooth adaptation.
The life sciences industry is in a state of flux for a whole series of reasons, which can largely be traced back to shifting market dynamics and growing regulatory rigour. In a conservative and inevitably slow-moving industry as this, it can be hard to keep up with the changes. Below are five of the biggest sources of disruption to pharma companies’ equilibrium, which they need to smooth their way through to avoid losing momentum, revenue and market share.
Merger & acquisition activity
The need to respond to changing market demands more swiftly than life sciences firms can manage under their own steam has fuelled merger and acquisition activity in the market in recent years. Analysis of deals in pharma and life sciences by PwC revealed that 101 transactions were announced in the sector during Q4 2016, worth $34.4 billion in disclosed value (28 of these deals have already been completed). Seven of the transactions were worth $1 billion+, the highest - Lonza’s acquisition of Capsugel - costing $5.5 billion.
KPMG expects more of the same in 2017, with Europe’s largest biotech company, Actelion, the subject of great interest and suggestions that it could be a takeover target for Johnson & Johnson and Sanofi. It isn’t just that the big brands are keen to take advantage of shortcuts to new innovation. Being acquired by a bigger name is the stated exit strategy for many biotechs bringing hot new products to market.
To capitalise on these strategic and often sizeable purchases, the acquiring company must be able to align its branding, content and labelling conventions quickly, reliably and efficiently. This is important if the new parent organisation is to maximise the revenue opportunity while minimising exposure to any risks associated with inconsistent, inaccurate or incomplete consumer messaging in onward packaging, dosage and safety instructions.
This article has been published in International Pharmaceutical Industry, Summer, 2017