1 of 15

BRIEF INTRODUCTION

BIOPHARMACEUTICAL M&A STRATEGIES ANALYSIS FOR

A.Y. 2021/2022

Teva’s M&A Strategy

M&A Proposal

BioPharma Industry: �M&A Strategy Overview

Econometric Analysis

1

2

3

4

M&A Expert (Team Leader)

Econometric Expert

BioPharma Expert

Strategy Expert

AGENDA

Marco Vitellaro

Luca Faulisi

Michele Mosca

Francesca D’Amico

2 of 15

PHARMACEUTICAL

INDUSTRY

PHARMACEUTICALS

BIOTECHNOLOGY

LIFE SCIENCE

MEDICAL DEVICES

BRIEF INTRODUCTION

  • Economies of scale
  • Enlarging product portfolio and completing the pipeline
  • Access to new geographic market
  • Tax inversions (for U.S. companies)

​

M&A operations have always played a key role

WHY M&A?

3 of 15

Originators

Find, develop, launch innovative new treatments. Globally, based on strong R&D organization

Point-of-call specialists

Provide comprehensive solutions

for an indication / TA.

Build niche competence.

OTC / Consumer health

Market consumer products with

medical claim utilizing branding know-how

Low-cost providers

Manufacture and deliver standard

quality at lowest possible costs

Generics - Biosimilars

2005

M&A STRATEGY 2005-2016

4 of 15

M&A TREND IN THE INDUSTRY VS M&A BEHAVIOR OF TEVA

TEVA’S PERFORMANCE ARE UNDER THE AVERAGE-COMPANY OF THE INDUSTRY

The increasing in revenue over the years it’s a clear signal of a continuing evolution market.

Firms spent a lot in R&D activities in order to maintain their competitive position.

The number of patents is almost constant.

5 of 15

Teva is the main producer of

Over 40,000 employees and 58 global manufacturing sites

GENERIC DRUGS

What they excel in:

  • capacity utilization along value chain
  • combining cost-efficiency with quality

Mission�Deliver quality products at low prices

Global leader in generic and speciality medicines with a portfolio of 2,400 products

6 of 15

TEVA’S SWOT ANALYSIS

WEAKNESSES

OPPORTUNITIES

THREATS

STRENGHTS

  • Number of blockbuster 
  • High diversification brand portfolio 
  • Distribution Network (Teva has presence in 60 countries) 
  • Leader to generic drugs and 13th in pharmaceutical globally 
  • Holds patent for world’s largest selling multiple sclerosis drug Copaxone 
  • Superior product and services quality
  • Low R&D investment compared to other companies in the industry 
  • Discontinued production of major anesthetic drugs 
  • Implementation of Technology in processes 
  • Few products produce most of the revenue. 

​

  • Create a level playing field for all the players in the industry
  • Growing Market Size and Evolving Preferences of Consumers
  • E-Commerce and Social Media Oriented Business Models
  • Changing Technology Landscape
  • Business's expansion towards other European and Asian Markets

​

  • Changing consumer buying behavior
  • New technologies developed by the competitor
  • New environment regulations under Paris agreement (2016)
  • Rising raw material
  • Growing strengths of local distributors

7 of 15

CoGenesys Inc.

($400 millions)

​

​

Strengthening its presence in growing biotechnology market.

2013

2005

Novopharm Ltd.

($266 millions)

​

Strengthening its position as one of the global leaders in the generic pharmaceutical marketplace.

CONSOLIDATION

TEVA’S M&A

8 of 15

A

B

A

B

A

B

B

B

A

‘Buy Growth Companies’

‘Buy Scale Companies’

‘Organic Companies’

‘Multi M&A Companies’

  • Constant Growth in the long term;

​

  • In 2005, Teva acquired Novopharma, in order to expand geographically;

​

  • In 2013, Teva acquired CoGenesys, which had a good papeline;

​

  • Teva acquired only two firms over time;

TEVA’S M&A STRATEGY

TEVA’S M&A STRATEGY

9 of 15

ECONOMETRIC ANALYSIS

Short and long term

DRIVER : NMA

cv

  • An increase of netincome causes an increase of N°M&A
  • An increase of wwpatents causes an increases of N°M&A

​

cv

DRIVER: GROWTH

  • As the dimension of the company increases the expected Revenue increases

​

  • Higher equity leads to an increase of Revenue

​

  • An increase of eupatents causes an increase of Revenue

​

  • An increase of NMA causes an increase of Revenue

​

​

​

  • As the dimension of the company increases the expected Revenue increases

​

  • Higher equity leads to an increase of Revenue

​

  • An increase of uspatents causes a decrease of Revenue

​

  • An increase of eupatents causes an increase of Revenue

​

  • An increase of NMA causes an increase of Revenue

​

​

​

DRIVER: GROWTH

10 of 15

DRIVER: GROWTH

cv

  • An increase of Netincome causes an increase of R&D
  • An increase of wwpatents causes an increases of R&D
  • An increase of ROE causes a decrease of R&D
  • An increase of N°M&A causes an increases of R&D

cv

cv

DRIVER: PROFITABILITY

  • An increase of equity causes a decrease of ROE
  • An increase of net income causes an increase of ROE
  • An increase of eupatents causes a decreases of ROE

​

DRIVER : MARKET EVALUATION

  • An increase of employee causes a decrease of deltashareprice
  • An increase of usptents causes a decrease of deltashareprice

​

ECONOMETRIC ANALYSIS

Short and long term

11 of 15

CRITICAL ANALYSIS

​

CRITICAL ANALYSIS

Few investments in R&D (compared to market trends).

Falling prices in America for 'Copaxone’ (flagship product).

Few Worldwide Patent compared to the market trend.

Turnover due to few drugs.

Geographically centered mainly in America.

12 of 15

OUR PROPOSAL IS BASED ON:

Mission�

​

Leader in Indian market, improving the lives of patients.

Innovation

Constantly look for original and better ways to excel, creating solutions for current and future unmet needs.

Main strategies adopted�

Intention to remain on the same strategy adopted until now, in this way it is possible to avoid high debts deriving from possible big acquisitions, therefore it is proposed to search for a company in the Indian market of medium size.

​

SWOT analysis and goals�

Focus on R&D. Opportunities given by growing in a new emerging markets.

Results in terms of M&A from econometric analysis�

An increase of N°M&A causes an increases of Revenue.

13 of 15

PROPOSAL

  • Name: Granules India Limited
  • Foundation: 1984
  • Headquarters: Hyderabad, India
  • Mission: To Be An Icon For Technology Growth and Innovation.​
  • Vision: ​Leader in pharmaceutical manufacturing by process innovation
  • Values: Integrity, Quality, Continuous improvement, Customer centricity
  • ANDAs approved: 54
  • Product portfolio: APIs, PFIs, FDs
  • Emerging Business: New Products filing through R&D Medium R&D and Manufacturing capabilities
  • Industry sector: Health care
  • Number of Employees: 2789 (2016)
  • Manufacturing facilities: Bonthapally, Hyderabad (APIs) Jeedimetla, Hyderabad (Multi-Product API and PFI Facility), Gagillapur, Hyderabad (Finished Dosage and PFI Facility), Chantilly, Virginia (R&D)

​

​

​

WHY GRANULES?

GEOGRAPHICAL EXPANSION

MORE PRODUCTS IN THE PIPELINE

ENLARGING PORTFOLIO PRODUCTS

PRODUCTION COST

LEADER IN AN EMERGENTING MARKET

14 of 15

STEPS OF CONSULTANCY

MARKET EVALUATION

​

FIRST APPROACH

​

NEGOTIATIONS

POST ACQUISITION ASSISTANCE

Become in 2018 the market leader in India, where the costs are quite low, and the revenue share is composed by 72% of generic drugs. Then seek to expand into adjacent countries.

​

  • Screening of the market.
  • Definition of the objectives.
  • Identification of the ideal profile of the company.
  • Initial contacts.
  • Financial evaluation.
  • Conclusion and formalization of the agreement
  • Coordination of the negotiations
  • Signing the acquisition contract
  • Evaluation of the financial effects

Plan of attack (12 Months)

15 of 15

THANKS FOR THE ATTENTION!