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INDIANAPOLIS—With large acquisition deals continuing to change Big Pharma's business landscape, some of the world's largest pharmaceutical companies have been hinting that they are also in a buying state of mind, although they have also publicly stated that any potential acquisition activity on their part is not likely to be of the "mega-merger" variety pursued by some of their competitors.

Following January's Pfizer/Wyeth and March's Merck/Schering-Plough and Roche/Genentech merger announcements, many analysts agree that other Big Pharma companies may feel pressured to join the consolidation trend, particularly as many of their blockbuster drugs face patent expiration in the next few years. Names like Eli Lilly & Co. and Bristol-Myers Squibb frequently top analysts' speculation lists, and some analysts predict that the consolidation wave may eventually hit Europe, where French pharma Sanofi-aventis is rumored to be seeking partners, particularly in the area of generics.

Putting some of the rumors to rest recently have been the CEOs of Lilly and Sanofi-aventis, John Lechleiter and Chris Viehbacher respectively, who openly discussed with various media outlets their plans to make small- or mid-sized acquisitions.

Speaking to the Wall Street Journal recently, Lechleiter ruled out a Lilly mega-merger akin to the $68 billion Pfizer/Wyeth or $41 billion Merck/Schering deals, but said Lilly is looking for acquisitions in the $5 billion to $15 billion range, saying, "There's no evidence that a consolidated industry is a more productive industry." He added that the company is eager to make more deals like its $6.5 billion takeover of ImClone, which enhanced the company's oncology portfolio.

"I don't think any of these large-scale consolidations address innovation," he told the paper, adding, "We're going to look for opportunities to be a bit more diverse pharmaceutical company. We're not going to buy a medical-device company. We're not going to buy a diagnostic company."

Pursuing smaller-sized, diverse acquisitions is also part of Sanofi-aventis' current strategy to expand its R&D division, according to Viehbacher. Although he said Sanofi will be "disciplined" on acquisitions, he added, "I am not very hot for big deals, but you can never say never. I don't see a reason to take any strategic options off the table."

Late last week—mere weeks after closing a deal to acquire Czech generics company Zentiva—the French pharma announced its acquisition of Mexican generic company Laboratorios Kendrick for an undisclosed amount. In a statement, Sanofi-Aventis said the acquisition is designed to accelerate sales growth and further extend its pharmaceutical portfolio in emerging markets. Kendrick generated nearly $35 million in sales last year and has an estimated 15 percent market share in the Mexican generic drug market.

However, on April 6, Sanofi-aventis reportedly broke off acquisition talks with Indian sector firm Piramal Healthcare after the companies could not reach an agreement on Piramal's value.

Some of the companies' competitors are beginning to clarify their own acquisition plans. AstraZeneca PLC CEO David Brennan said late last week that he did not see his company jumping on the consolidation bandwagon, either.

"I don't believe we need to engage in a large transaction," Brennan told reporters. He said the company may try to add products to its pipeline, but they would be "on the smaller side, not on the larger side."

And Jeffrey Stute, co-head of North America M&A at JPMorgan Chase, told Forbes that smaller pharma deals seem likely after an active first quarter.

"While there have been some recent large pharma transactions announced, we don't expect there to be a huge wave of consolidation that sweeps the big-cap pharma space," Stute told the magazine. "In mid-cap pharma, biotech and medical devices we do see continued activity."

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