003: Bigger Pictures

At lunchtime today I learned from Radio New Zealand's Midday Report segment WorldWatch that IBM - International Business Machines - was 100 years old.

Occasion to remind me of several visits to what the 1980s termed IBM House in a cityside property along Oxford Terrace, Christchurch. I was to learn there how IBM had arisen from "business mergers" and earned its 'big blue' reputation.. and .. wasn't there a computer that could beat any brain anywhere at chess!

Sandwiched between a tree-lined and pretty River Avon at its front and commercial warehousing construction at the rear. Inside, several offices per floor with then fashionable large single rooms divided by multi-partitions whose workstations revealed the firm to have shifted from typewriters, cash registers and office machinery to computers. For them desktop times had arrived.

But, it should be said, IBM was then already behind the times. Technology, and IT, times. Thenceforth they would not catch up, and so far as I know from the radio commentary's conclusion of a present "reinvention" arrived at in ruthless cutting-off-the-past style, this will be insufficient to regain the BAU lead. Kindly put, a phrase to aptly characterize them would be slow followers.

In saying this I'd like to reiterate a term I'd come up with back then yet whose currency in the relevance of a bigger pictures take on the pharmaceutical industry(PI) today in relation to westernized medicine, is a good match.

That term: EMINENTIA.

And taken to mean not what Gould's might give to an anatomical protuberance in the inner ear or a ridge of heart chamber tissue, but a condition arising from eminence. A condition arising despite the best and/or worst efforts of all PI players in westernized medicine, whose 'golden years' were said by a wiki topic as being in the 1990s. A condition which unless recognised  - IMO 1980s - and robustly dealt to as it arises would set forth a rigidity from which so very few would escape. Until too late.

That eminentia is well-and-truly set today for let's say the U.S. pharmaceutical industry is discernible in the context of a Standard & Poors Valuation and Risk Strategies research group report recently made. The PI - and yes largely US-led in this respect - has been embarked on very substantial merger and acquisition programs as it sought also to restate itself in the Health Care business..

Latest data shows how for all business some 828 M&A deals @ ~$93B have taken place. Compared to 2007 - 905 deals @ ~$172B - decline is apparent. Yes, the global Recession in part responsible.

Again all business, when it comes to choice we find Europe taking 45% in 2011(cf 50% 2010); whereas M&A  shot up 85% in target deals around Africa and the Middle East. Whilst for Latin America and the Caribbean the figures were somewhat less.

So much for context. Now for the sectors. Real and vital pointers. For Health Care:

Year-on-year(yoy) @ 2011 Health Care M&A dived. Minus 28%.

We could say how Pfizer's Wyeth 2009 buyout - reportedly the "biggest ever" at $68B - was writing on the wall. Surely?

Perhaps more significant, however, was the nature of that acquisition — cash, shares, loans essential to make the stake. What else might remain in circulation for such activity..? And besides, vigorous take-up in M&A terms does not plenteous opportunity make. But, OTOH, serious - unbuyable - contenders.

Contenders and contention then. Replacing competition..? If yes, eminentia rules. If no, no one rules. Another possibility is the PI remainder stuck and waiting for  upturn in M&A and the industry's so-called leaders pitching their immediate futures in biopharmaceuticals.

Which brings me back to a like theme of the intro. News of a BBC production about 20 vaccines for the future of.. patients or megalo-eminentia?

Next time: Eminentia and Trade, else WTO and rules..