Pharma Deals Booming in 2009

If the pace of recent drugmaker mergers seems a migraine-inducing blur, that's because it is. Pharma deals in the first quarter of 2009 were worth nearly 50% more than all the industry deals announced in 2008, according to a new report.

The study comes on the heels of today's announcement by GlaxoSmithKline(GSK Quote) that it will acquire privately held U.S. skincare products maker Stiefel Laboratories for $2.9 million.

The report, from The Mergermarket Group of New York and London, says deals in the quarter carried a combined value of $166 billion -- more than 10 times that of deals announced in last year's first quarter and well over the $114 billion in deals announced in all of 2008. Roche bought the 44% of Genentech (DNA Quote) it didn't already own for $47 billion. Pfizer (PFE Quote) is buying Wyeth for $64 billion and Merck (MRK Quote) is buying Schering-Plough (SGP Quote) for $43 billion.

The deals seem evidence that despite the downturn big pharma still boasts the big cash flow to make major moves. In the case of Merck, the reason for the Schering-Plough merger was clear: There is simply no projected earnings growth for Merck by analysts over the next few years thanks to patent expirations and a dearth of pipeline drugs, Brian Gilmartin said in a recent note to investors on RealMoney.com. ...