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Will Other Pharmaceutical Enterprises Follow Up after the Large-scale Acquisitions of “New Takeda” and “New BMS” that may Yield Successful Results?

January 28, 2019 By Zhixing

Takeda acquired Shire for USD 62 billion in May 2018, and the “new Takeda” is expected to rise to the global top 10 pharmaceutical companies. BMS acquired Celgene for USD 74 billion in Jan. 2019; the “new BMS” will possess many blockbusters and R&D pipelines in the oncology field and increase its competitiveness in the oncology drug R&D for a restart. The acquisitions between similar pharmaceutical enterprises today may become an important way for pharmaceutical enterprises to gain core competence. Then, will other pharmaceutical enterprises follow the path of the “new Takeda” or “new BMS”?

Around a decade ago, the acquisitions between pharmaceutical enterprises were to expand R&D pipelines, dabble in different disease areas, and gain competitiveness through extensive R&D pipelines, such as the Sanofi-Aventis, Pfizer-Wyeth and Novartis-Alcon acquisitions. But today, targets of acquisitions have gradually shifted to the core competitive fields, and large pharmaceutical enterprises sell R&D pipelines that are assessed as secondary, so that they can be the No. 1, No. 2, or No. 3 in a certain field.

Takeda acquired Shire for USD 62 billion on May 8, 2018. The “new Takeda” will focus R&D efforts on tumor, gastrointestinal disease, and nervous system disease fields, and is expected to become the first in Asia to rank among the global top 10 pharmaceutical companies. Bristol-Myers Squibb (BMS) acquired Celgene for USD 74 billion on Jan. 3, 2019. The “new BMS” will continue to increase efforts in R&D of new oncology drugs, and is now in possession of two blockbusters for solid tumor, two blockbusters for blood tumor, and numerous R&D pipelines.

Acquiring firm

Acquired firm


Amount ($)

R&D focus after merger



May 8, 2018

62 billion

Tumors, gastrointestinal diseases, and nervous system diseases

Bristol-Myers Squibb



Jan. 3, 2019

72 billion


"The large-scale deals that have happened — and are happening — are about making sure that people can create category leadership," said Glenn Hunzinger, pharma deals leader at the pharmaceutical consulting organization PwC, in a report. Among all disease fields, oncology has the largest market, and scale is a requisite for staying at the top position of the field.

Most pharmaceutical enterprises lack the infrastructure required for rising to the top pharmaceutical enterprise rankings. According to an analysis, though R&D scale and infrastructure are attractive to pharmaceutical enterprises, BMS’ acquisition of Celgene for USD 74 billion will not necessarily cause more acquisitions.

"There is a misconception in the healthcare industry that once you see one or two really large mega-deals, that means you're going to see 10 more follow it," Omid Ahdieh, speaker of a healthcare services investment bank, said in Nov. 2018. Pfizer is one of the companies that will not follow; its CEO Albert Bourla said in 2018 Q3 call meeting, “We continue not to see the need for any large-scale M&A activity at this time.”

And certainly, according to another analyst, the large-scale deals will stimulate other pharmaceutical enterprises to join M&A. Not long after BMS’ acquisition of Celgene, Eli Lilly announced acquisition of Loxo Oncology for USD 8 billion on Jan. 7, 2019, to include the candidate drug LOXO-292 (RET inhibitor) for lung cancer and thyroid cancer into the R&D pipeline, to increase its competitiveness in the oncology field.

Furthermore, if the “new BMS” performs well in the pharmaceutical R&D in the next half of 2019, this will prompt more acquisitions to take place between similar pharmaceutical enterprises to form complementation in R&D pipelines and increase core competence. Gilead and Merck are among them.

AbbVie’s new HCV drug: Mavyret rapidly occupied the U.S. market after the marketing in 2017, and sales of Gilead’s HCV drugs were hit hard. Gilead, in order to reverse the decline in HCV drug sales, acquired Kite for USD12 billion in 2018, to obtain the CAR-T therapy: Yescarta, however, contrary to expectations, Yescarta did not perform satisfactorily at the beginning. According to an analyst, Clovis Oncology may be the next takeover target of Gilead, because its PARP inhibitor: Rubraca is highly competitive.

Next, Merck. Its anti-PD-1 therapy Keytruda has defeated Opdivo to become the leader, but this does not satisfy the investors. In the 2018 Q3 call meeting, Merck CEO Ken Frazier told investors, “Let me start by saying that we’re pleased with the way in which our business is growing now, particularly in the oncology field, but that doesn’t make us comfortable. We have to continue to build our portfolio and build on our pipeline, and that’s why [business development] is an important priority for us going forward.” From the words, we know that Merck is also interested in acquiring other pharmaceutical enterprises.


1. How Bristol-Myers' big buy could spur ripples for pharma M&A;

2. Could Gilead, Amgen and AbbVie follow Bristol-Myers into megadeal territory?

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