Local advice for global pharma company
PRIOR to the completion of its merger with Wyeth in October 2009, Pfizer Inc - the world's largest research-based biomedical and pharmaceutical company - announced the disposal of one of its drug products facilities in Latina, Italy, which completed in February last year.
The PricewaterhouseCoopers LLP (PwC) corporate finance team in Newcastle were Pfizer’s advisers on the disposal.
The PwC team first worked with Pfizer on the sale of its Morpeth factory in 2006.
Since then they have worked on six consecutive projects in the US, Ireland, Italy and Germany.
The Italian facility based in Latina, near Rome, was purchased by German-based pharmaceutical contract manufacturer Haupt Pharma AG.
The site employs 450 people and specialises in antibiotics production, primarily beta lactams such as penicillins and cephalosporins.
The acquisition will allow Haupt to diversify its portfolio as well as improving its market position outside of Germany.
Under the terms of the contract Haupt will continue to make products for Pfizer.
As the dynamics of the industry changed so consolidation in the pharmaceutical sector continued apace in 2009.
In addition to the $64 billion merger of Wyeth and Pfizer, Schering Plough joined forces with Merck & Co and Abbott Laboratories announced the purchase of the pharmaceutical business of Belgium’s Solvay.
Although media attention has focused on such mega deals, the bulk of mergers and acquisition activity involves smaller local organisations such as Quantum Specials and Specials Laboratory.
Amit Bhalla, corporate finance assistant director at PwC, expects further developments.
He said: “This is unlikely be the end for merger-mania in the pharma sector.
“One of the ways all pharma companies can get short to medium-term benefit is through a merger.
“There are economies of scale they can gain by combining their sales forces and marketing teams, and there are also benefits from merging their research and development pipelines.
“Large pharmaceutical companies will particularly be on the lookout for targets that can help replenish their drug development pipelines.
“In addition, the mega deals seen in 2009 could lead to further global manufacturing and R&D plant divestitures as these large pharmaceutical companies look to streamline their merged entities in a bid to realise synergies.”
:: Amit Bhalla is an assistant director in corporate finance at PricewaterhouseCoopers, Newcastle. Call 0191 269 4063 or email amit.bhalla@uk.pwc.com
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