Private equity plays an increasingly important role in a number of industries. Early-stage (‘venture capital’) investors have been active in the biotech industry for a long time. Most late-stage (‘buyout’) investors, however, have steered clear of pharmaceutical R&D and generics companies. But the reasons, a comparatively high regulatory environment and the resulting complexities, are losing their threat. In the future, one is likely to see financial investors taking a closer look at the pharmaceutical industry — and at generics opportunities in particular.
Get full access to this article
View all access options for this article.
References
1.
PricewaterhouseCoopers, Global Private Equity Report 2004 and other sources.
2.
Analysis performed on the Dealogic database (www.dealogic.com) by the author, February 2005.
3.
Abolon created the Abolon Global Generics Index due to the lack of indices that distinguish the stock market performance of the generics industry from the pharmaceutical industry as a whole. The dollar-based Abolon Global Generics Index is a capitalisation-weighted price index and contains 28 publicly listed generics stocks. Figure 1 shows the performance of the Index's regional constituents.
4.
Blackstone has invested in North European pharma company Nycomed as part of a private equity syndicate led by CSFB.
5.
At that time the remaining shares were held by management and a large number of Czech healthcare professionals.
6.
CauchiM. (2004) ‘Alternative investing: Drug industry has been giving healthy returns’, available at www.sitkapartners.com/news55.html, accessed 20th August 2005.
7.
Market analysis by product class received from IMS throughout 2003.
8.
Private discussions of the author with local competitors.
9.
Abolon pro-forma adjustments and margin analysis of continued operations across publicly listed generics companies in Western and Eastern Europe.
