|According to PriceWaterHouseCoopers’ 12th annual CEO survey, one third of pharmaceutical CEOs are very confident they can increase their revenues in the next 12 months. A total of 47 CEOs were queried on different subjects, including the current economic downturn.
For 55% of respondents, the crisis provides an opportunity to grow by using internal cash flow at a time when the banking and general financial systems cannot provide support for mergers and acquisitions. Pharmaceutical companies with good debt to equity ratios and strong cash positions will very likely look at expanding by acquiring smaller firms or merging with peers. With the current behavior of currencies, Japanese companies are thought to be in a particularly good position to acquire US and European firms.
CEOs in the pharmaceutical industry are therefore more likely than CEOs in other industries to be positive about the outlook for the next 12 months. According to opinions stated, the current economic constraints will very probably provoke necessary changes within the industry that will bring bottom line benefits in the mid and long term.
Perhaps the only concern was that of drug pipelines at some firms being more empty than usual, which does not point to a healthy revenue situation going forward. The most probable remedy being looked at by Big Pharma firms is acquisition of pipelines through M&A.
In general, the outlook is definitely not nearly as bad as in other industries and a quick recovery can be expected from this important sector of the economy.
Separately, pharmaceutical consultants continue to see increased demand for streamlining consulting from both major, and small and medium pharmaceutical companies looking to reduce costs by either outsourcing or streamlining their administrative, research, quality control, regulatory, and procedural functions.
All in all, an important transformation of the pharmaceutical industry is taking place, and we are likely to see a much different environment by the time the economy emerges from the current recession.