Trend spotting: M&A in the pharma industry 2007/8 by Nigel Jones

It has been a year of contrast for mergers and acquisitions in the pharmaceutical industry. Intense activity ceded to uncertainty as the credit crunch made itself felt. Nigel Jones, partner and co-head of the health care sector at international law firm Linklaters, looks back on the most influential pharmaceutical deals of 2007 and predicts what 2008 holds in store - from emerging market hotspots and private equity interest to the impact of increased demand for R&D will have on deal values.

In June, AstraZeneca acquired biotechnology firm MedImmune, with a final purchase price of $15.6 billion (Marketletters passim). Not only was this to be the biggest deal of the year in the sector, it also made the record books as the largest biotech deal ever completed.

The deal reflects a wider trend of 2007 - Big Pharma willing to pay large sums of money to secure the sought after resources of biotechnology drugmakers and replenish parched pipelines. The number of publicly-traded biotechnology companies has increased by 5% since 2006. In the same period, the revenue generated from M&A deals has increased by nearly triple this amount.