Competitor Research

MBA 699. 4-1 Report: Potential Alternative Buyers/Competitor Research. Competitor research is very important during acquisition analysis. This is a strategy that entails researching major competitors to gain proper insight into their products and services, market share, profitability, and more.

Competitor research also allows a company to examine the strengths and weaknesses of the main competitors, enabling them to determine possible threats and opportunities. In this report, I will identify and research the top three companies in the life sciences industry, focusing on medicines and pharmaceuticals.

North American Industry Classification System (NAICS) Code

The North American Industry Classification System is the standard utilized by Federal statistical agencies to classify companies for the purpose of gathering, examining, and publishing statistical data linked to the United States business economy.

Based on the information provided in the case scenario, the organization is a life sciences company that manufactures cancer treatment drugs. Thus, the NAICS code for the company is 32541. I will use this code to find potential buyers. More specifically, I will use the code to identify companies that engage in the manufacturing of medicinal and pharmaceutical products.

Top Competitors

The top three companies in the pharmaceutical and medicine manufacturing sector include Pfizer, Johnson & Johnson, and Bristol-Myers Squibb. Pfizer is an American biotechnology and pharmaceutical company headquartered in Manhattan, New York, United States. Johnson & Johnson, on the other hand, is an American company that manufactures pharmaceuticals, consumer packaged goods, as well as medical devices.

It is headquartered in New Brunswick, New Jersey, United States. Bristol-Myers Squibb is a pharmaceutical company committed to developing innovative medications for patients with serious illnesses, including cancer. The company is located in New York, United States.

I utilized three criteria to shortlist these companies. These include 1) industry, 2) geography/region, and 3) size and profitability. I chose these criteria to ensure a successful acquisition. The three companies must be operating in the pharmaceutical industry, and they must be committed to the development and delivery of cancer treatment drugs. Both Pfizer, Johnson & Johnson, and Bristol-Myers Squibb make cancer medicine. Additionally, the three companies must be profitable to ensure a successful acquisition. We do not want a scenario where the acquirer backs out due to financial difficulties. Also, the three companies must be located in the United States. Geographic distance matters a lot in the acquisition process (Bick et al., 2017).

It has a significant influence on acquisition premiums, as well as completion time. We can have a faster time to completion the closer we are to the acquirer. I considered several other criteria but did not use them.

These include reasons behind acquisition, having a shared vision and goals, and having a good work ethic. I did not use these criteria because they are less likely to influence the success of the acquisition.

Company Information

Pfizer

Pfizer is among the leading biopharmaceutical companies around the globe. The company hopes to innovate in order to bring treatments to patients. Pfizer specializes in several products, including vaccines and pharmaceutical drugs that treat different conditions, including cancer, cardiovascular disease, inflammation, and many other conditions. As of 2019, Pfizer’s held 5% of the world’s prescription drug market (Mikulic, 2021). Its CAGR is around 9%.

Johnson & Johnson

Johnson & Johnson is among the largest pharmaceutical companies in the globe. The company hopes to change the health trajectory for humanity. It specializes in household products, surgical products, orthopedic implants, prescription drugs, and over-the-counter drugs (Compton, 2022). As of 2019, Johnson & Johnson held around 4.6% of the world’s prescription drug market (Mikulic, 2021). The company’s CAGR is around 5.5%.

Bristol-Myers Squibb

Bristol-Mayers Squibb is among the biggest pharmaceutical corporations in the United States and across the world. The company hopes to be the top biopharma corporation that transforms the lives of patients through science (BMS, n.d.). Bristol-Mayers Squibb is committed to developing innovative drugs for patients with serious illnesses. As of 2019, the company’s market share was around 2.9 percent (Mikulic, 2021). The company’s CAGR is around 4.0 percent.

Figure 1.0: Company Information

Conclusion

The top three companies in the pharmaceutical and medicine manufacturing industry to consider if we decide to look for an alternative buyer are Pfizer, Johnson & Johnson, and Bristol-Myers Squibb. The three criteria I utilized to shortlist these companies are 1) industry, 2) geography/region, and 3) size and profitability. The three companies must be operating in the pharmaceutical industry, they must be profitable, and they must be located in the United States. Both Pfizer, Johnson & Johnson, and Bristol-Myers Squibb meet these requirements. I chose these criteria to ensure a successful acquisition.

References

Bick, P., Crook, M. D., Lynch, A. A., & Walkup, B. R. (2017). Does distance matter in mergers and acquisitions?. Journal of Financial Research, 40(1), 33-54. DOI: https://doi.org/10.1111/jfir.12115

BMS. (n.d.). Our Mission, Vision, Values & Commitment. Retrieved from: https://www.bms.com/about-us/our-company/our-mission.html

Compton, K. (2022). Johnson & Johnson. Retrieved from: https://www.drugwatch.com/manufacturers/johnson-and-johnson/

Mikulic, M. (2021). Global Rx drug market share by top companies 2019 and 2026. Statista. Retrieved from: https://www.statista.com/statistics/309425/prescription-drugs-market-shares-by-top-companies-globally/#:~:text=Pfizer%20held%20five%20percent%20of,the%20global%20market%20until%202026.

References

CMS.gov. (2021). National Health Expenditure Data. Retrieved from: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical#:~:text=U.S.%20health%20care