Valeant chief latest pharma CEO to question M&A mania, calls it a 'bit of a bubble'
- Valeant is well known as a company that aggressively acquires other companies. Its strategy is to become one of the world's largest biopharma companies through acquisitions. But its CEO, Michael Pearson, is skeptical about the industry's M&A frenzy and is calling it a "bit of a bubble," Bloomberg reports.
- Valeant recently acquired Salix Pharmaceuticals for $11.1 billion and beat out Endo in the process.
- Valeant, which is based in Canada, has been expanding in Canada and is actively considering growth opportunities in the Asia and the Middle East.
Stating the obvious, Michael Pearson said about the current frenzy of deal-making, "Some of these acqusitions are not going to work." He went on to say that not all of the prices make sense, and that Valeant is continually looking for good deals, instead of taking a cyclical approach like many players in the industry.
During the first quarter of this year, there were almost $100 billion worth of M&A deals in the biopharma sector, and the pace doesn't seem to be slowing down. However, many participants, Pearson included, realize that much of the activity is driven by the availabilty of cheap money and the pressure to grow. GlaxoSmithKline CEO Andrew Witty also expressed similar sentiments recently.