First there were rumors surrounding AstraZeneca, then Botox-maker Allergan was caught in a takeover storm and on Tuesday GlaxoSmithKline (GSK) and Novartis announced a $16 billion commercial tie-up. The pharmaceutical industry has been swept up in a wave of mergers and acquisitions.
Industry observers have been waiting for a rush of deals for months, as cash-rich companies work to reshape themselves. And over Easter weekend, that activity sharply picked up pace.
Rumored tie-ups in the sector now include a whopping $100 billion bid for AstraZeneca by Pfizer, the biggest company in the sector, and a mooted $50 billion pitch for Botox maker Allergan by Valeant and activist investor Bill Ackman.
"Bid rumors occur relatively frequently in the pharma sector," as Mark Clark, analyst at Deutsche Bank, pointed out. However, there are several factors driving companies to make deals at the moment: such as the sector's well-publicized difficulties with developing new products and pricing as well as a move to exploit a U.S. tax law.