Pharmaceutical Services M&A Outlook: Industry Stands to Benefit as the Ongoing Drug Development Bonanza Heads into Another Bullish Year

摘要

Record amounts of capital, compounds in development, new drug approvals by the FDA, and valuations afforded promising drug therapies fuel to continue biopharmaceutical company innovation and investment. And pharmaceutical services companies stand to benefit. Edgemont has identified the following key market dynamics that should dictate near-term M&A activity for pharma services companies: Record biopharmaceutical industry funding and continued outsourcing trendsPharmaceutical services industry fundamentals make it an attractive sector for investors given its growth prospects. Outsourced drug development services companies are in high demand by both strategic acquirers and private equity firms. ? Burgeoning market opportunity for service models that address the needs of the new generation of drug innovators There is strong growth potential for service providers geared towards serving small pharma and emerging biotech companies. This includes both existing services and new services to address unmet needs (e.g. outsourced vendor management). ? Biopharmaceutical companies are increasing outsourcing activity Large and mid-sized pharmaceutical services players are increasingly seeking acquisitions to add capabilities to enhance their specialized service offerings to meet client demand. CROs and other"asset-light" service providers possess large cash resources to make accretive acquisitions.