Merger Mania Continues in the Life Sciences Sector
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Merck of Germany announced on Sunday that it had agreed to purchase Millipore, an American supplier of laboratory products and reagents for biotechnology companies for $7.2 billion. The offer comes in the wake of the $6.0 billion offer made last week by Thermo Fisher Scientific one of the largest supplier in the world of laboratory reagents, supplies and equipment. While somewhat of an unconventional move for a healthcare company, Merck executives hailed the acquisition as a strategic move for customers, stakeholders and share holders of both companies.
In other news, Astellas Pharmaceuticals, Japan’s second largest pharmaceutical company said today that it tendered an offer to acquire all outstanding shares of Long Island, NY-based OSI Pharmaceuticals for $52.00 per share or approximately $3.5 billion in cash. OSI, which manufactures and sells Tarceva (erlontinib) a treatment for non-small cell lung and pancreatic cancer (which it co-markets by Genentech in the US and globally with Roche), has a strong oncology pipeline and is also developing treatments for diabetes and obesity. Despite early success with Tarceva, cash-starved OSI has been struggling of late. The acquisition of OSI provides Astellas with a strong pipeline and entrée into the growing US oncology market. OSI would also complement Astellas’ existing strength and franchises in urology and immunology.
While mergers and acquisitions were largely anticipated in the US biopharmaceutical sector over the past few years, the acquisition of American companies like Millipore and OSI Pharmaceuticals by foreign companies suggests that there may be chinks in the armor of once dominant US biotechnology companies. The economic crisis coupled with America’s waning innovation in the life sciences sector suggests that other US-based biopharmaceutical companies may be at risk. Although most foreign governments stumbled when attempting to develop the own internal biotechnology expertise, many cash-rich foreign companies recognize that purchasing US companies with marketed products offers them an opportunity to quickly and strategically gain a foothold in the ever-expanding biotechnology market.
Until next time....
Good Luck and Good Buying!!!!!!!!!
