Deal Search Online: Pharma is the single most active sector in decade's health care M&A market

According to Deal Search Online, an Irving Levin Associates M&A database, there has been a total of 1,431 pharmaceutical M&A deals, totaling $632.3 billion dollars committed to the industry during the ten-year period ended December 31, 2010. Pharma was the single most active sector of the health care industry in the decade's health care M&A market, accounting for roughly 40 percent of all dollars spent during the decade. The high cash flow pharmaceutical companies possessed also helped drive M&A activity in the biotechnology sector. With high cash flow, big pharma also drove much of the M&A activity in the biotech sector.

The five largest pharmaceutical M&A transactions reported in 2010 are listed below.

1. Teva Pharmaceutical Industries acquired Ratiopharm for $4.97 billion

2. Biovail Corp. acquired Valeant Pharmaceuticals International for $3.86 billion

3. Abbott Laboratories acquired Piramal Healthcare Limited for $3.72 billion

4. Pfizer, Inc. acquired King Pharmaceuticals, Inc. for $3.6 billion

5. Eisai Company Inc. acquired the rights to market Lorcaserin for $1.37 billion

In the most recent year, 2010, over $38.7 billion was committed to pharmaceutical M&A, a 74 percent decrease from 2009's decade high total of $147.2 billion. There were 127 mergers and acquisitions announced last year, a 9.3 percent decrease from 2009's 140 deals. This marked the second lowest total in deals per year over the last decade; in 2001 just 87 pharmaceutical M&A transactions were reported. However, the data is somewhat misleading. We note that 2009's decade-high in dollars committed was in large part due to two first quarter mega deals, which combined for $109.1 billion. Pfizer, Inc. acquired Wyeth, Inc. for $68 billion and Merck & Co., Inc. acquired Schering-Plough Corp for $41.1 billion. Therefore the drop off since last year in terms of the number of deals or dollars committed was not as significant as one might assume by simply glancing at the data.