TABLE 9-1 Major Acquisitions and Mergers of U.S. Pharmaceutical and Biotechnology Companies

Pharmaceutical Companies

 

Biotechnology Companies

 

American Cyanamid and Immunex

1993

American Cyanamid and Immunex

1993

Procordia and Erbamont

1993

American Home and Genetics Institute

1991

Hoechst-Celanese (Hoechst) and Copley

1993

Boehringer Mannheim and Microgenics

1991

Marion Merrell Dow and generics operation of Rugby Darby

1993

Sandoz and SyStemix

1991

Beecham and SmithKline

1991

Abbot and Damon Biotech

1990

Boots and Flint

1990

Baxter and Bioresponce

1990

American Home and A. H. Robins

1989

Schering AG and Codon

1990

Bristol-Myers and Squibb

1989

Roche and Genentech

1990

Dow and Marion

1989

American Cyanamid and Praxis

1989

Merck and DuPont

1989

Chugay and GenProbe

1989

Merck and Johnson & Johnson

1989

Fujisawa and Lyphomed

1989

Kodak and Sterling

1988

Eli Lilly and Hybritech

1986

Schering-Plough and Key

1986

Bristol-Myers and Genetic Systems

1985

Monsanto and Searle

1986

 

 

Rorer and USV/Armour

1986

 

 

Rhône-Poulenc and Rorer

1983

 

 

NOTE: The acquiror is noted first, and may be either a U.S. or a foreign company. The acquired company is noted second and is a U.S. company.

SOURCE: Adapted from the Boston Consulting Group, 1993, p. 42.

health care technology are now ubiquitous. Notable examples include the dramatic consolidation under way in the multinational pharmaceutical industry (a few of the major mergers and acquisitions are summarized in Table 9-1); the diversification of major pharmaceutical manufacturers into health care delivery, through acquisition of, or partnering with, firms that manage pharmacy benefits; consolidation (Table 9-1) and extensive partnering (Read and Lee, 1994) in the biotechnology industry; sharply depressed stock prices of pharmaceutical, biotechnology, and medical device firms for the past two years (Read and Lee, 1994); the reduced flow of new equity capital into the biotechnology and medical device industries (Littell, 1994; Read and Lee, 1994); and personnel cutbacks and downsizing reported by numerous firms in the health care technology industries.

Most of the changes related above are too recent to have had an observable effect on the level of R&D activity in the affected industries. Nonetheless, it seems unlikely that the consolidation of duplicate functions that normally accompanies the merger of similar firms will fail to impact research departments. Nor is it likely that firms in financial stress will neglect to scrutinize R&D budgets. Since virtually all of the capital raised by the smaller biotechnology and device



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