The Inside Track: M&A is Not the Way to Reinvigorate R&D
I received a call today from GDS International, a UK-based b2b publishing company, alerting me to its annual, event called the Next Generation Pharmaceutical Summit (NGP) currently taking place at the Ritz Carlton on Amelia Island in FL. This invitation only event is supposed to bring pharmaceutical and life sciences executives to discuss problems facing the industry and what thing ought to be implemented to insure continued progress and growth. This is the news coming out of the conference attended by over 50 pharmaceutical and biotechnology executives
Big Pharma concludes that M&A is not the New R&D
With large firms seeking synergies to drive down R&D costs, M&A deals can aid in the transfer of technical knowledge, scalability and reduce time to market. However, previous M&A periods have not alleviated the productivity crisis. “While short term gains emerge from these deals, in the mid to long term, R&D innovation, organic growth, and internal drivers are still key facet’s behind creating a successful company and providing an organization with sustainability.” So says, an executive committee composed of 50 pharmaceutical executives including Jeffery Nye, Chief Medical Officer at Johnson & Johnson, Reinilde Heyrman—VP of Clinical Development at Daiichi Sankyo, Oscar Laskin—VP of Early Development at Celgene are leading the debate, joined by Ann Wang—VP of Clinical Operations at Human Genome Sciences. These sentiments confirm the notion that the pharmaceutical and biotechnology industries are in transition and suggest that life sciences companies still face many serious challenges in the not too distant future.
While increasing mergers and acquisitions isn’t likely to reinvigorate R&D, newly emerging economic pressures have recently triggered another wave of M&A activity in both sectors. But is this the solution for long-term sustainable growth? “The willingness for the industry to unite in such a way clearly demonstrates long-term strategies for improved business processes so long-term investment in R&D can be secured” said Drew Contessa the NPG director.
The NPG will reconvene in April 2010 to review recommendations and actionable items.
The realization that M&A is not a solution to correct waning productivity in R&D was a long time coming. It cost about 150,000 pharmaceutical employees their jobs over the past three years. The idea that companies are beginning to recognize that buying or merging with another company is not a panacea or long term fix is a good thing.
Hopefully, the life sciences industry can learn from its past mistakes.
Until next time....
Good Luck and Good Job Hunting!!!!!!
The Belgian chemical manufacturer Solvay 
The old baseball adage which says that “you can’t tell the players apart without a program” is particularly apt when it comes to tracing the M &A activity that led to the creation of some today's largest pharmaceutical companies..gif)
In the wake of last week’s Pfizer-Wyeth M&A feeding frenzy, I suspect that most analysts were hoping that this week would be a little quieter. Unfortunately for many pharmaceutical company employees, this week may be shaping up to be almost as nerve-wracking as last week!
Previously, on the Bristol-Myers Squibb/ImClone Let’s Make a Deal Show. .jpg)
According to a 
