China and India pharma companies driving M&A activity in Asia

A report by analyst group Datamonitor has identified China and India’s pharmaceutical industries as the ones to watch following a flurry of M&A activity over the last three years.

Of the 400 transactions analysed by Datamonitor in the region between 2007 and this year, 32 percent involved healthcare and pharmaceutical companies from China, including Hong Kong, with Indian companies involved in 31 percent of transactions.

In contrast, companies from the region’s leading markets of Japan and Australia were less active during the period, although Japan continued to be the dominant player when it came to the big end of transactions.

Datamonitor noted that the huge growth of middle class populations in China, India, Thailand, Vietnam and Indonesia, coupled with improved regulatory standards, was attracting increasing numbers of foreign pharmaceutical companies looking to offset losses for imminent patent expiries as well as a general slow-down in world markets.

This was reflected in an increased number of foreign firms, particularly from the US, buying local Asian manufacturers or generics firms well placed in their respective markets, Datamonitor said.

“M&A in Asia-Pacific is expected to increase throughout the remainder of 2010, provided the world economic climate remains stable and governments in developing Asia-Pacific nations continue to push ahead with ongoing healthcare reforms and regulatory policy reviews,” said Datamonitor healthcare analyst and report author Erin Brady.