Pharma Outsourcing Mergers and Acquisitions "Set for Record Year in 2015"

An increase in M&A activity propelled the value of pharmaceutical outsourcing deals from $9.9 billion in 2014 to nearly $17.6 billion through October 2015, putting the sector on track for a record-breaking year, according to GlobalData.

In an article for Arena International’s Clinical Trial Year Book 2016, Adam Dion, MSc, GlobalData’s Senior Healthcare Industry Analyst, says that while the pharmaceutical outsourcing services sector has seen a sharp rise in M&A activity in recent years, the value of deals has more than doubled over the past year, from $5.5 billion in 2014, to $12 billion by October 2015.

Dion explains: “This year has seen a number of high-valued transactions, including LabCorp’s $6.1 billion purchase of Covance, and WuXi being sold for $3.3 billion to a Chinese private equity group."

“LabCorp’s intentions seem pretty clear – it wants a larger piece of the Contract Research Organization (CRO) market," adds Dion. This sector has enjoyed impressive growth over the past few years, Dion goes on "as plummeting sales from the loss of exclusivity branded drugs, the high cost of pharmaceutical research and development, and the globalization of clinical trials, have led to a surge in demand for outsourced clinical trial work."