Following up on the M&A topic.

While many agree small co M&A is a good and vitally important thing (thankfully), there appears to be some disagreement around large mega-mergers and their value. @jmaxlevin @steveusdin1

1/n https://twitter.com/steveusdin1/status/1356631718875320321

I actually disagree with the contention that Big Pharma Mega-Mergers destroy value

While some deals may (like any bad deal), and all clearly cause organizational chaos during the integration, lumping all big M&A together as value-destroying ignores two things.

First, beyond sentiment, there's plenty of counterpoint scholarship that big M&A can create value. E.g., @BCG did an analysis of mega-mergers & showed that "large pharma mergers are associated w/ higher R&D productivity" in delivering Rx's to patients https://doi.org/10.1016/j.drudis.2017.06.002

They found that while the merged company faced near term disruptions, over the longer term more objective decision-making ("fresh looks") around future resource allocation and risk mitigation (portfolio rationalization) yields improvements in the quality of R&D output.

Second, benefits to the broader ecosystem of the mega-mergers are real.

Free up talent to populate new startups/cross-fertilize new perspectives;

Free up assets to find "better champions" (out-licensing);

Free up capital to shareholders (cash deals) so it can be redeployed

As an example, in the Boston area, big deals like Pfizer-Wyeth, Takeda-Shire, BMS-Celgene have created huge talent flows around the ecosystem over past decade - with very positive impacts... Many are now executives in the region's emerging biotech's.

Stock prices show if good financial deal. But just b/c acquirer's stock isn't higher in 3+ yrs doesn't mean that our ecosystem isn't stronger, nor that patients didn't get great Rx's, because of it. Investors can suffer in bad M&A, but the rest of ecosystem often still benefits

imo, Big-Big M&A is just as important as Big-Small M&A for a healthy and vibrant ecosystem.

Legislating that Big M&A can't happen is a very bad idea - & would have negative consequences for our sector - in long run impairing our collective mission to bring Rx's to patients