Sanofi-Aventis Acquisition
Table of Contents
1. Description of the Pharmaceutical sector
In the year 2004, the global economy experienced a momentum. After the dot.com bubble and the 9/11 terrorist attacks, the economy slowed down, especially in the USA. The American economy, which was the greatest market for the pharmaceutical industry, suffered an economic recession from 2001 to 2003. However, in 2004 the tax cuts and the lower interest rates stimulated a robust expansion in that country.
Particularly, the worldwide sales in pharmaceutical products reached the $550 billion in 2004 and $466 billion in 2003, which implied a growth of 7% and 9% over the previous year. These sales were concentrated in USA, where the market share was about 45% of the global sales. 40% of the total industry revenues took place in Europe and Japan.
With regards to the market share ranking of the pharmaceutical sector by revenues, the leader in 2003 was Pfizer, GlaxoSmithKline, Merck, Johnson & Johnson and Aventis. However, due to patent expirations and new successful drug launches, the ranking of top pharmaceutical companies constantly faces numerous variations. The most sold drug in 2003 was Lipitor manufactured by Pfizer, with a global market share of 2.2%, or equivalently sales worth $10.3 billion. During this time, there were 64 blockbusters (products generating over $ 1 billion in sales).
Moreover, the pharmaceutical sector has been characterized with a very high M&A activity – a fact that further contributes to the constant variation in the rankings and the dynamism of the pharmaceutical industry in general. For example, in 2003, before the merger took place, Aventis occupied fifth place, as measured by level of revenues, and Sanofi came in thirteenth. After the conclusion of the merger, Sanofi-Aventis emerged as the third largest company in the industry. Therefore, the huge competitive pressure has led to an increasing consolidation in the sector. In 1985, the ten largest
1. Description of the Pharmaceutical sector
In the year 2004, the global economy experienced a momentum. After the dot.com bubble and the 9/11 terrorist attacks, the economy slowed down, especially in the USA. The American economy, which was the greatest market for the pharmaceutical industry, suffered an economic recession from 2001 to 2003. However, in 2004 the tax cuts and the lower interest rates stimulated a robust expansion in that country.
Particularly, the worldwide sales in pharmaceutical products reached the $550 billion in 2004 and $466 billion in 2003, which implied a growth of 7% and 9% over the previous year. These sales were concentrated in USA, where the market share was about 45% of the global sales. 40% of the total industry revenues took place in Europe and Japan.
With regards to the market share ranking of the pharmaceutical sector by revenues, the leader in 2003 was Pfizer, GlaxoSmithKline, Merck, Johnson & Johnson and Aventis. However, due to patent expirations and new successful drug launches, the ranking of top pharmaceutical companies constantly faces numerous variations. The most sold drug in 2003 was Lipitor manufactured by Pfizer, with a global market share of 2.2%, or equivalently sales worth $10.3 billion. During this time, there were 64 blockbusters (products generating over $ 1 billion in sales).
Moreover, the pharmaceutical sector has been characterized with a very high M&A activity – a fact that further contributes to the constant variation in the rankings and the dynamism of the pharmaceutical industry in general. For example, in 2003, before the merger took place, Aventis occupied fifth place, as measured by level of revenues, and Sanofi came in thirteenth. After the conclusion of the merger, Sanofi-Aventis emerged as the third largest company in the industry. Therefore, the huge competitive pressure has led to an increasing consolidation in the sector. In 1985, the ten largest
Bibliography: Cleaves, K., Thayer A., (August 2004). Warning, merge with care: Sanofi-Aventis. Modern Drug Discovery. Retreived on June 6, 2014 from http://pubs.acs.org/subscribe/archive/mdd/v07/i08/pdf/804business2.pdf Eironline Johnson, L. (April 25, 2013). Bristol-Myers Earnings Plunge as Sales of Plavix Plummet. DailyFinance. Retrieved on June 5 from http://www.dailyfinance.com/2013/04/25/bristol-myers-earnings-plunge/ Institute of Mergers, Acquisitions and Alliances Outsourcing-pharma. (August 23, 2004). Sanofi-Aventis merger completes. Retrieved on June 5, 2014 from http://www.outsourcing-pharma.com/Preclinical-Research/Sanofi-Aventis-merger-completes Rangnekar, A Sellers L.J. (May 2004). Special Report. Pharmaceutical executive. Retrieved on June 6 2014 from http://www.pharmexec.com/pharmexec/data/articlestandard//pharmexec/202004/95192/article.pdf Sorkin, A., Harris G Thayer A. (June 2004). Blockbuster Model Breaking Down. Modern Drug Discovery. Retrieved on June 5 from http://pubs.acs.org/subscribe/archive/mdd/v07/i06/pdf/604business3.pdf Weyzig F