Impact of mergers &amp; acquisitions on research productivity within the pharmaceutical industry

Koenig, Michael E. D.; Mezick, Elizabeth

doi:10.1023/b:scie.0000013304.40957.0d

Cited by 20 publications

(10 citation statements)

References 13 publications

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“…1.2 | Empirical evidence Koenig and Mezick (2004) investigated the impact of M&As on R&D performance in the pharmaceutical industry. They looked at a sample of 15 companies from the years 1981 to 2000.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…While previous research has found that there is a significant improvement in the profitability, efficiency, expense and liquidity ratios in general, evidence on the impact of M&A activities in the pharmaceutical sector is mixed; for example, Rani et al found that there was no improvement in profitability ratios or returns on capital ratios due to an M&A (Rani et al, 2015). The results of a study published in 2004 suggest that pharmaceutical companies that merged were able to achieve better research productivity scores than pharmaceutical companies that did not (Koenig & Mezick, 2004). Previous research also suggests, however, that recent mergers may have increased the concentration of pharmaceutical R&D, in turn slowing innovation (Comanor & Scherer, 2013; Fernald et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…Moreover, most of the previous studies that have focused on this topic in the pharmaceutical industry have been purely descriptive or noncausal in their approach. In addition, the evidence from most studies on M&As is quite old, dating to a time before health technology assessments became important (Danzon et al, 2007; Demirbag et al, 2007; Hassan et al, 2007; James, 2002; Koenig & Mezick, 2004; LaMattina, 2011). All of this may help explain why the previous empirical literature on the impact of M&As on corporate success has not yet provided clear results (Jansen, 2008; Koenig & Mezick, 2004; Mueller, 2003; Weech‐Maldonado, 2002; What Do We Know about Success and Failure of Mergers?|SpringerLink, 2021).…”

Section: Introductionmentioning

confidence: 99%

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To merge or not to merge? The impact of mergers and acquisitions on corporate success in the pharmaceutical industry

Büssgen,

Stargardt

2024

Manage Decis Econ

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Two of the chief goals of most companies are to secure their own existence and generate above‐average returns for their owners. One of the main ways that companies attempt to achieve these goals is to grow, and pharmaceutical companies are no exception in this regard. However, whereas internal growth tends to be organic and slow, external growth can usually be achieved more quickly, for example, through mergers, acquisitions or other external transactions.The aim of this study is to evaluate the impact of merger and acquisition (M&A) activities on pharmaceutical company success, measured in terms of financial and other performance indicators.We identified the top 30 pharmaceutical companies worldwide by revenue in 2020 and gathered data on M&A activities and a broad range of financial and other performance indicators from 2000 to 2020. We then used a generalised difference‐in‐difference design to evaluate the extent to which a company's success was affected by substantial M&A activities versus organic growth. To do so, we defined a premerger period of 2 years and a postmerger period of 3 years. We classified M&A activities as substantial when transaction costs were greater than 20% of a company's annual revenue.Our results indicate that there is a clear trend for M&As to have a positive impact on corporate success compared with organic growth. For example, after an M&A, a company's annual revenue increased on average by 3.50 billion United States dollars (USD) (p = 0.000) in the first year and by 4.52 billion USD (p = 0.000) in the second year. For employee growth, we found significant increases across all time periods (p = 0.000). Postmerger increases were also seen in gross profit in the first (+1.65 billion USD, p = 0.053) and second (+2.61 billion USD, p = 0.005) years, as well as in net profit (+6.82 billion USD, p = 0.014) and return on assets in the first year (+12.04 percentage points, p = 0.016). However, indicators of innovation (e.g. research and development [R&D] spending) and of stakeholder value (e.g. market capitalisation) did not show a significant increase.Compared with the impact of organic growth alone, M&A activities in the pharmaceutical industry led to significantly higher market dominance, size and profits but did not have a significant impact on innovation or shareholder value over the short time.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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To merge or not to merge? The impact of mergers and acquisitions on corporate success in the pharmaceutical industry

Büssgen,

Stargardt

2024

Manage Decis Econ

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“…Desde 1989, la industria farmacéutica tuvo un proceso de fusiones y adquisiciones que se presentó en tres oleadas (Koenig & Mezick, 2004). La primera ola de concentración incluye fusiones como la de Bristol-Myers Squibb en 1989 y Smith-Kline Beecham.…”

Section: Farmacéutica Y Cosméticosunclassified

“…Uno de ellos es el acceso a patentes. Asimismo, algunos análisis plantean que la industria realiza fusiones y adquisiciones buscando ventajas que incluyen economías de escala en investigación y desarrollo (I&D), acceso a medicamentos en el pipeline, marketing y capacidad de ventas, acceso a mercados, y porque las regulaciones gubernamentales se han vuelto más permisivas (Koenig & Mezick, 2004;Danzon, Epstein, & Nicholson, 2007).…”

Section: Farmacéutica Y Cosméticosunclassified

¿El fortalecimiento de los derechos de propiedad intelectual estimula la innovación? Un análisis exploratorio de la dinámica de patentamiento por sectores industriales en Colombia, 1980-2010

Campi¹,

Esterling

Zuluaga

2020

Cuad Adm.

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Los derechos de propiedad intelectual (DPI) y las patentes como mecanismos de impulso a la innovación han cobrado especial relevancia y debate en el contexto colombiano. Este artículo tiene como objetivo explorar el comportamiento de las patentes de residentes y no residentes para el período 1980-2010. En particular analiza cómo este comportamiento podría estar relacionado con el fortalecimiento de la legislación de propiedad intelectual y con el proceso de apertura económica y desindustrialización. La evidencia sugiere que el fortalecimiento de los DPI no ha incentivado la innovación local, sino que sólo ha impulsado las solicitudes de patentes de no residentes en unos pocos campos tecnológicos y por parte de unas pocas empresas multinacionales. En cambio, las empresas nacionales recurren al uso de mecanismos alternativos de propiedad intelectual como los acuerdos de confidencialidad y el secreto industrial para gestionar su conocimiento y apropiarse de las rentas asociadas a sus esfuerzos en actividades de innovación que se caracterizan por formas de innovar basadas en la imitación y adaptación de tecnologías extranjeras. Esta evidencia permite discutir la política de fortalecimiento de los DPI y el estímulo de las patentes de invención como mecanismo para incentivar la innovación en Colombia.

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Pharmaceutical information: A 30‐year perspective on the literature

Bawden¹,

Robinson²

2011

Annual Review Info Sci & Tec

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Impact of mergers & acquisitions on research productivity within the pharmaceutical industry

Cited by 20 publications

References 13 publications

To merge or not to merge? The impact of mergers and acquisitions on corporate success in the pharmaceutical industry

To merge or not to merge? The impact of mergers and acquisitions on corporate success in the pharmaceutical industry

¿El fortalecimiento de los derechos de propiedad intelectual estimula la innovación? Un análisis exploratorio de la dinámica de patentamiento por sectores industriales en Colombia, 1980-2010

Pharmaceutical information: A 30‐year perspective on the literature

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