Today, KPMG is reporting results from a survey of pharmaceutical executives. In this survey, respondents said they will increase their acquisition activity in the coming year in order to gain new therapies and new customers.
In the KPMG survey, 83 percent of executives said it is likely their company will be involved in a merger or acquisition as a buyer or seller in the next two years. Further, 41 percent of executives surveyed said the largest area of spending in the next year would be for acquisitions, followed by new products and services, at 38 percent, and research and development, at 38 percent. Similarly, a strategic acquisition was cited as the highest priority investment area by 41 percent of executives surveyed, followed by expansion into new markets by 22 percent.
While Wall Street and CNBC loves this news, job seekers may not be so happy about it. According to the survey, 41% of respondents said they plan to add personnel by next year. But, as the survey also notes:
Interestingly enough, 23 percent never expect hiring to return to pre-recession levels.
As our friends in Pennsylvania learned today, M&A is not always a good thing:
Following the recent decision to sell its drug manufacturing unit to Alkermes for $960 million, Elan is eliminating 104 jobs from a Pennsylvania facility that is part of the deal, according to a notice filed with the Pennsylvania Department of Labor. The jobs will be gone next month and the facility is expected to be closed by September, an Elan spokeswoman writes us.
The Elan PA situation is a real shame, as the facilities there are quite excellent. Savvy ex-US companies might want to take a look at those facilities and employees if they want to establish a solid R&D, formulation, and GMP presence on the East Coast of the US.