With the recent announcement of the Merck & Co acquisition of Schering & Plough, Fred Hassan the former Chief Executive Officer has been speaking to Meettheboss.TV on the future of the pharmaceutical Industry, mergers, acquisitions and the resistance felt?
Last year Fred over saw the $41.1 billion sale and predicts that more mergers and acquisitions should be expected throughout 2010. Company investments are a necessity for the funding of key research and development projects. “Innovation costs, but is the price too high for those involved?”
Fred speaks out during this candid interview how he dealt with a plethora of financial pressures and resistance. Shearing Plough were under FDA investigation as well as the SEC for accounting irregularities and although Fred saw this as a challenge it was not an impossible one.
‘We were under a financial challenge in the sense that the major businesses were going down. Part of that financial challenge was something I did not know about before I got there, that was a cash flow challenge. It is something, which is not seen, very often in pharmaceutical companies. But this company was looking at a big cash burn, and something had to be done about it very quickly.’
The trends to combine company earnings to increase spend and meet with the financial demands of R&D is not without its risks. Fred believes that more thought must be taken into account before trying to resolve the situation with a quick fix scheme.
“I joined a company in 1997 that was in great difficulty. There has been a merger between a Swedish company and a U.S. company, and that merger had resulted in a lot of difficulties, I was brought in as a CEO from the outside to try to make this merger work. I realized that the future growth product of this company has been compromised in a deal that had to be untangled.” Fred told MeetthebossTV.
With the daily announcements of big pharmaceutical companies joining forces to combat the ever increasing costs of bringing new and advanced drugs to the consumer market we must remember that short term gains will not always lead to long term prosperity.
“Don’t get enamored by the attraction of the object of the target company, does it fit the next stage of strengths, weaknesses, opportunities and threats that my company has at present? Does it fit the strategy?” To watch the full interview visit Meettheboss.TV (registration required).