Right ingredients for a successful M&A Essay Example | Topics and Well Written Essays - 2250 words

Right ingredients for a successful M&A - Essay Example Factors such as shifting market dynamics from US to Emerging Markets, rising healthcare demand due to ageing population, regulatory and government changes due to economic environment and patent expiration of blockbuster drugs and the failure of R&D have led companies to restructure, grow inorganically and contain costs. Rationale behind M&A in Pharma There are a number of reasons behind which organizations merge or aquire each other, the most presiding one is accelerating growth. Pharma industry has some unique growth drivers that lead the companies to grow inorganically rather in the conventional way. The key drivers of M&A growth in the pharmaceutical industries are: 1. R&D Productivity: The pharmaceutical industry is research-intensive industry, with an average R&D to sales ratio as high as 18%, compared to 4% for US manufacturing industry overall (Pharmaceutical Researchers and Manufacturers of America, 2011). The R&D process is expensive costing $1.3bn in average (Grabowski, 200 7) time-consuming (12-15 years) and highly risky in their outcomes. Hence, by joining the research expertise of the two companies, M&As can profoundly improve the research performance of the firms involved. 2. Pipeline growth: An important investing criterion in pharma firms is evaluating company’s drug pipeline. Inspite of the exorbitant R&D spend, drug pipelines of companies are quite barren, especially the late?stage pipelines. Hence it is imperative for the Pharma companies to look outside in order to fill their pipelines. 3. Search for Blockbusters: Blockbusters, defined as brands with annual sales in excess of $1 billion, continue to drive growth. Pharma companies constantly search for blockbuster drug molecules such as Eli Lily’s Prozac or Pfizer’s Lipitor to boast their... Right ingredients for a successful M&A There are a number of reasons behind which organizations merge or aquire each other, the most presiding one is accelerating growth. Pharma industry has some unique growth drivers that lead the companies to grow inorganically rather in the conventional way. The key drivers of M&A growth in the pharmaceutical industries are: R&D Productivity: The pharmaceutical industry is research-intensive industry, with an average R&D to sales ratio as high as 18%, compared to 4% for US manufacturing industry overall.The R&D process is expensive costing $1.3bn in average time-consuming and highly risky in their outcomes. Hence, by joining the research expertise of the two companies, M&As can profoundly improve the research performance of the firms involved. Pipeline growth: An important investing criterion in pharma firms is evaluating company’s drug pipeline. In spite of the exorbitant R&D spend, drug pipelines of companies are quite barren, especially the late†¨stage pipelines. Hence it is imperative for the Pharma companies to look outside in order to fill their pipelines. Blockbusters, defined as brands with annual sales in excess of $1 billion, continue to drive growth. Pharma companies constantly search for blockbuster drug molecules such as Eli Lily’s Prozac or Pfizer’s Lipitor to boast their top lines. The period for which the patented drug can be masrketed is effectively 4-5 years after which the patent owning company loses its exclusivity to market and sell the drug.

National Security Strategy Essay Example | Topics and Well Written Essays - 1250 words

National Security Strategy - Essay Example The NSS 2010 U.S strategy seeks to build coalitions with strong international support and participation to address these issues. The NSS focuses on the security of the United States, its citizens and the US allies and partners. In addition to detecting threats posed by weapons of mass destruction specially deployed by fundamental extremists operating from within and outside the borders mentored by state or non state actors 1. The Quadrennial Defense Report (QDR) identifies the changing environment in which America will confront the challenges and threats of future. CSDFG identifies itself with National Military Strategy (NMS) with regards to the aims of the National Security Strategy (NSS) as it describes a strategic plan for the military force. 1. National Security Strategy. The white House, Washington May 2010 The strategies set forth in the DSG and CSDJF recognize the changes required for success in the new environment to meet the challenges and threats. Accomplishing both objecti ves will require stronger cooperation from our partners to deal with global challenges. Complementing the objectives in the NSS, the Defense Strategic Guidance (DSG) highlights the importance of transitioning forces to address the challenges of the future. The guidance explains the need for rebalancing the US military to meet the ends. The assessment broadly echoes the president’s strategic direction of transitioning defense forces from present war to get organized for the future challenges that would broadly address the national security concerns of the United States. Thus, the current transition, states the Chairman’s strategic direction for the joint force, is a selective and non-negotiable assimilation of capabilities to reconstitute the forces after the long period of war. Whereas the ways of achieving this fully equipped joint force are described precisely in the CSDJF. For example, the force will have a command over the cutting edge information technologies in n etworked special operations, including cyber, intelligence and reconnaissance to ensure much controlled and collaborative operations 2. On achieving the ends, CSDJF further explains that, â€Å"the implementation of these strategies will be a regionally-postured, but globally networked and flexible force. It can close on its objective at a time and place of its choosing and produce irreversible and stable outcomes. Finally, it is a joint force that provides a degree of security in balance with what the nation demands and is willing to pay† 3. Hence, the DSG and CSDJF, to a great extant, are elaborative on the same issues that the NSS points out as areas related to our national security. 2. Dempsey, E. Martin. Chairman’s Strategic Direction to the Joint Force Joint Chiefs of Staffs 3. Ibid While CSDFJ is guidance in tandem with the NSS and the QDR, it is very vague in advising military objectives. Thus, many issues are left for interpretation, whereas, National Military Strategy (NMS) specifically recognizes the ends to achieve with appropriate allocation and use of resources. Both documents, NSS and QDR, are intentionally vague to allow for planning. The NSS specifies the policy of United States towards security threats caused by cross