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Create a 9 pages page paper that discusses right ingredients for a successful m&a.
Create a 9 pages page paper that discusses right ingredients for a successful m&a. Factors such as shifting market dynamics from US to Emerging Markets, rising healthcare demand due to ageing population, regulatory and government changes due to economic environment and patent expiration of blockbuster drugs and the failure of R&.D have led companies to restructure, grow inorganically and contain costs. Rationale behind M&.A in Pharma There are a number of reasons behind which organizations merge or aquire each other, the most presiding one is accelerating growth. Pharma industry has some unique growth drivers that lead the companies to grow inorganically rather in the conventional way. The key drivers of M&.A growth in the pharmaceutical industries are: 1. R&.D Productivity: The pharmaceutical industry is research-intensive industry, with an average R&.D to sales ratio as high as 18%, compared to 4% for US manufacturing industry overall (Pharmaceutical Researchers and Manufacturers of America, 2011). The R&.D process is expensive costing $1.3bn in average (Grabowski, 2007) time-consuming (12-15 years) and highly risky in their outcomes. Hence, by joining the research expertise of the two companies, M&.As can profoundly improve the research performance of the firms involved. 2. Pipeline growth: An important investing criterion in pharma firms is evaluating company’s drug pipeline. Inspite of the exorbitant R&.D spend, drug pipelines of companies are quite barren, especially the late?stage pipelines. Hence it is imperative for the Pharma companies to look outside in order to fill their pipelines. 3. Search for Blockbusters: Blockbusters, defined as brands with annual sales in excess of $1 billion, continue to drive growth.
