Will the consolidation in the pharmaceutical industry level off at any time soon or is it here to stay and will even intensify?

Elliott Berger: With the ever-increasing share of new molecules being developed by smaller players, the trend for larger pharma to supplement their pipelines with acquisitions in targeted therapeutic areas will continue. Pharma R&D productivity still needs significant improvement and this is part of that trend. Larger deals may reemerge as US tax reform is implemented. 

Does the consolidation in the pharmaceutical industry affect CROs/CMOs, e.g. does it create a necessity for outsourcing partners to consolidate, too?

Elliott Berger: Pharmaceutical partners must adjust to help support the changing needs of pharma innovators. Smaller innovator companies are taking their molecules further into development, but have very specific areas of expertise and need broader support from their partners to reduce risks, get the right expertise and resources and progress their programs faster to limit cash burn and reach key milestones. Larger pharma will continue to consolidate their supplier bases with fewer partners that are able to provide more of the best, specialized services for their increasingly challenging pipelines. The ability to provide expert solutions and technologies for more of their molecules and for one molecule end-to-end should prove increasingly attractive.

For pharmaceutical companies mergers or acquisitions can be a means of improving their drug project pipeline. Does Pharma’s innovation output increase through M&A?

Elliott Berger: Big pharma plays a major role in financing, improving and driving clinical trials through to approvals for molecules acquired from smaller innovators. While smaller innovators are now increasingly capable of taking more molecules all the way to market, with support from financial markets, and experienced CDMOs with service offerings spanning the development cycle, it is likely that at least some of those molecules would not make it through the expensive and lengthy process and reach patients without this support.

Drug development/manufacturing projects between pharma companies and CDMOs are based on mutual trust and a focus on success. How big of an issue is a merger or an acquisition for ongoing projects?

Elliott Berger: This has long been an important factor in the industry. At Catalent, we have over 80 years’ experience in developing, launching and supporting molecules through their entire life-cycle, and we often work with not just one innovator, but as many as five successor companies along the way. It has been said that we have longer and deeper relationships with molecules than people actually working on them!  This is, however, an important point, as knowledge of the molecule, and all the science that goes with associated methods and processes, is vital for success. Of course, we also have relationships with almost all of the larger pharmaceutical companies that are doing the acquiring, so this trust is there as they evaluate potential acquisitions, and it is often then just another program at Catalent for them after the acquisition. 

How can (Pharma and CDMO) outsourcing partners maintain their focus and guarantee confidentiality in their projects during a merger or the following integration phase?

Elliott Berger: Catalent has a great deal of experience in managing this process. Our focus is on the molecule itself and on the patients it is intended to help cure – we call that our ‘patient first culture’. That focus, and the need for speed in the drug development process, ensure smooth transitions along the way.

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