Deal fever hits global pharma sector

NEW YORK, Apr 27 (AFP): Global pharmaceutical companies facing major patent expirations have announced billions of dollars of transactions in a wave of deal-making that could ultimately include mega-mergers and hostile takeovers.

On Tuesday, Switzerland's Novartis, GlaxoSmithKline of Britain and US group Eli Lilly announced nearly $25 billion worth of deals to shift key assets in oncology, vaccines and animal health among the three giants.

The same day, Canadian company Valeant, working with activist investor Bill Ackman, unveiled a bid to acquire Botox-maker Allergan for $45.6 billion. The proposal suggested Valeant would launch a hostile campaign if management does not accede to "productive discussions."

Both deals were shadowed by the possibility of an even more dramatic outcome: the purchase by US giant Pfizer of Britain's AstraZeneca for more than $100 billion. Pfizer reportedly approached AstraZeneca about such a deal, although talks are not active.

The stream of activity comes as pharmaceutical giants seek to make up for lost sales as patents expire and as medium-sized firms and generics specialists take steps to grow by acquisition.

"We expect the next few years to be particularly active from a mergers and acquisitions perspective and hence pivotal in the reshaping of the industry," said Barclays analyst Shubhomoy Mukherjee.