Sign of things to come?
If you haven't already seen the news, Merck has announced it will buy Schering-Plough for $41.1 billion in cash and shares.
By on Mar 9, 2009If you haven't already seen the news, Merck has announced it will buy Schering-Plough for $41.1 billion in cash and shares.
Perhaps the marriage makes sense. The companies already team on their cholestrol offerings Zetia and Vytorin. But neither drug is breaking sales records since concerns about their effectiveness emerged.
Analysts believe Schering has one of the better pipelines in the industry. But as Stephen Pope at Cantor Fitzgerald Europe points out, the company isn't well-positioned to develop some of what it has - something Merck can certainly lend a hand with. The combined company will count 18 potential new drugs in phase III development, twice what Merck currently has.
The merger also will give the new company an expanded presence in high growth emerging markets - certainly a key component of future growth in the industry. Schering generates about 70% of its revenue outside the US, inlcuding more than $2 billion from emerging markets. The new company will draw more than 50% of its revenue from outside the US, say MarketWatch.
So what does this mean for the rest of pharma? Is this the last big merger we can expect? Or is there more to come? We'd love to hear your predictions.