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DIRECTORY OF SINGAPORE PROCESS & CHEMICALS INDUSTRIES 2021/2022
BioNTech to help vaccinate the world against Covid-19 have been unprecedented, with now more than a billion doses of BNT162b2 having been delivered globally.”
Better Days Ahead
Global healthcare spending continues to trend higher. A new research report by the IQVIA Institute for Human Data Science projects global spending on medicines, using invoice price levels, to grow at a compound annual growth rate of 3-6% to reach about US$1.6 trillion by 2025, excluding spending on Covid-19 vaccines.
The report estimates total cumulative spending on Covid-19 vaccines through 2025 to be US$157 billion. The bulk will be spent on vaccinations, which will be largely completed by 2022, followed by booster shots on a biannual basis in subsequent years.
There are wide variations in medicine spending across global markets. Pharmerging markets led by China will accelerate medicine spending while the US is expected to have slow or no growth. Japan, the world’s third largest market, will experience flat-to-declining medicine spending because of its continued price cut policy.
While Covid-19 will continue to be a defining issue, oncology remains a major growth driver for companies. In its 2021 Preview, Evaluate Vantage noted that across the broader industry, six of the ten biggest new sales generators and four of the top ten best- selling products are cancer drugs.
New approvals from the US Food and Drug Administration (FDA) are also expected to generate significant value, with ten pending drugs forecast to be billion-dollar blockbusters by 2026. The late-stage pipeline also shows significant promise, and the combined net present value for the top ten R&D projects is close to US$60 billion.
“Biopharma has unsurprisingly weathered the Covid-19 landscape much better than many industries,” said report author Amy Brown. “The focus on vaccine and treatment development has created a halo effect that has lifted companies across the industry, and investor enthusiasm is high. But big expectations carry the risk of big repercussions where performance falls short; some big tests lie ahead in the coming year.”
Pharmaceutical mergers
and acquisitions
Pharmaceutical mergers and acquisitions (M&As) took a hit in 2020 as some deals were put on hold, especially in the early months of the pandemic.
In its 2021 M&A Firepower report, consultancy firm Ernst & Young (EY) put the value of M&A activity across the life sciences industry in 2020 at US$159 billion, a steep 48% drop from the US$306 billion in 2019, although the number of deals remained relatively unchanged.
Only one megadeal was recorded during the year as the industry pivoted from signing large M&As to focus on smaller collaborations and bolt-on deals in priority therapeutic
areas. AstraZeneca’s acquisition of Alexion in December for US$39 billion accounted for a quarter of the annual life science M&A spend in 2020.
Looking ahead, E&Y expects 2021 to be an active year for M&A, as life sciences companies had ended 2020 with strong balance sheets and the ‘firepower’ to make deals. It expects the “bolt-on frenzy” to continue as the industry looks to mitigate financial risk.
In its “Global MA Trends in Health Industries: 2021 Mid-year Update”, PwC said, “The significant uptick in M&A deal flow in the sector that began in the third quarter of 2020 continued into the first half of 2021, with deal activity remaining at elevated levels across all regions both in terms of deal volume and deal value.”
Eleven megadeals were announced in the first half of 2021 with a total value of approximately US$128 billion. Amongst them was the acquisition of a majority stake in Medline for US$34 billion by a consortium of private equity; Thermo Fisher announced takeover of contract researcher PPD for US$17.4 billion; and ICON’s announced plans to buy clinical trial rival PRA Health Sciences for US$12 billion.
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