COVID-19 And M&A: Multiple Scenarios In Store As World Adapts
Risks And Opportunities Emerging
The coronavirus pandemic could dull pharma M&A activity in the short-term as companies hoard cash and prioritize core activities. But experts say stress in the system could potentially push some firms to cull surplus assets or seek financial/strategic investors, amid a generally tough funding environment. Private equity investors may also find attractive investment opportunities to pursue.
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McKinsey India's head of pharmaceutical and healthcare practice shares insights on pharma’s risk management efforts and accelerated deployment of digital technologies, including augmented reality headsets for shop floor operators amid the pandemic. He expects a broad surge in deal-making and says pharma is poised for a “full recovery” soon.
M&A activity faces numerous hurdles during the COVID-19 pandemic but companies are finding different ways to negotiate, conduct due diligence and get deals completed, BIO 2020 speakers said.
Pharma manufacturing is operating well below normal levels in India, disrupted by labor absenteeism and supply chain issues amid the ongoing lock-down in the country, though the government is actively engaged in addressing bottlenecks. A speedy recovery is vital not just for domestic supplies.