Once upon a time, the way to be a big pharmaceutical company was to discover and develop drugs. But now, the business is becoming less about R&D, and more about M&A. It may cause excitement in financial markets, but it’s not a sign of health.
Valeant Pharmaceuticals International Inc.’s nosebleed-inducing $46-billion (U.S.) hostile takeover bid (in partnership with Bill Ackman) for Botox maker Allergan Inc. is the latest, and boldest, move yet from a company that has become the pharma industry’s poster child for buying your way to the top. In the past two years, Valeant has spent nearly $13-billion (U.S.) on acqusitions.