FOR the last few years, big pharma firms have been on the back foot. With expiring patents and drooping profits hanging over their heads, the chief executives of the drugs giants have been hunkered down, working out how to cut costs and find new growth.
As of yesterday, they seem to have decided that consolidation is the answer. Though revenues have been falling steadily across the sector, big firms aren’t necessarily short of cash, and companies can only sit on a warchest for so long until investors start asking what happens next. So as dealmaking confidence makes a return to global markets in general, pharma bosses seem to have decided that now is the time to set out their stall with some blockbuster tie-ups.
So far this year alone, including yesterday’s move for Allergan, more than $100bn of deals have been done in the pharma sector.
That’s a huge number, but it would be dwarfed if the one deal that wasn’t announced yesterday – the rumoured takeover of AstraZeneca by Pfizer – came to fruition. After a quiet few years, this is gearing up to be a very exciting 2014 for pharma investors.