Do large mergers increase or decrease the productivity of pharmaceutical R&D?

Research on the impact of enterprise mergers and acquisitions on technological innovation: An empirical analysis based on listed Chinese enterprises

As an important means for enterprises to acquire technological resources, the impact of mergers and acquisitions on technological innovation and underlying mechanisms deserve in-depth study. Using the merger and acquisition data of A-share listed Chinese companies from 2007 to 2020 in Shanghai and Shenzhen, the causal effects and influence mechanisms between mergers and acquisitions and technological innovation are identified and tested using the Difference-in-Differences method. The study finds that mergers and acquisitions have a long-term, sustained, technological innovation-enhancing effect on firms. Mechanism tests show that mergers and acquisitions can promote the technological innovation of enterprises by improving production efficiency, enriching digital knowledge, and enhancing market power. A heterogeneity analysis shows that the effect of mergers and acquisitions in enhancing technological innovation is more significant when the mergers and acquisitions meet domestic merger and acquisition requirements, when there is a small transaction size, and when the enterprises involved in the mergers and acquisitions are not state-owned. It is suggested that enterprises and the government should use multiple measures, while considering the impact of heterogeneity, to take full advantage of the positive effects of mergers and acquisitions on technological innovation.

Recent trends in interorganizational deal networks in pharmaceutical and biotechnology industries

While there have been trends in drug discovery from small molecules to new chemical modalities since the large mergers and acquisitions (M&A) of pharmaceutical companies in the late 2000s, trends in interorganizational deal networks have not been well addressed. We investigated the changing trends in interorganizational deals in the pharmaceutical and biotechnology industries. The results demonstrated that there have been changing trends, including a growing number of spinouts from academia and M&A in the United States and Europe. These findings indicates that the traditional network in which large pharmaceutical companies drove drug discovery output has changed, and interorganizational deals among diverse players have become more active.

R&D efficiency of leading pharmaceutical companies - A 20-year analysis

Comparative analysis of the R&D efficiency of 14 leading pharmaceutical companies for the years 1999-2018 shows that there is a close positive correlation between R&D spending and the two investigated R&D output parameters, approved NMEs and the cumulative impact factor of their publications. In other words, higher R&D investments (input) were associated with higher R&D output. Second, our analyses indicate that there are 'economies of scale' (size) in pharmaceutical R&D.

Measuring the Efficiency of U.S. Pharmaceutical Companies Based on Open Innovation Types

The pharmaceutical industry, where research and development (R&D) efficiency is central to company survival, has recently faced significant challenges. To increase efficiency, companies must implement strategies such as open innovation (OI), wherein they sell their intellectual property, maximize their use of external resources, adjust their structures, and implement new business models. In this study, we divided 701 U.S. pharmaceutical companies according to their OI strategies to measure and compare their R&D efficiencies between 2001 and 2016. We analyzed the deal data of companies by first dividing them into four groups (inside-out, outside-in, coupled, and closed) to calculate R&D efficiency using stochastic and meta-frontier analyses. In the first group analysis, the coupled group shows high technical efficiency, but in an overall comparison, the inside-out group achieves the highest efficiency values. These values increased between 2005 and 2010, when the R&D crisis in the industry was great at its highest. We thus identified the characteristics of each group based on our results, and presented extensive analyses using a time-series comparison and enterprise-level analysis. We claim that pharmaceutical companies can still cope with the current R&D crisis by implementing different OI strategies.