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Who are the top 10 small to mid-sized pharma companies in Peru, who have good growth prospects, a proven business model, and could benefit from investment to help expand?
Hello! Thank you for your question on the top 10 small to mid-sized pharma companies in Peru. The most useful sources I found to respond to your request were an article published by the Council on Hemispheric Affairs and an article on PharmExec.com. In short, there are very few pharmaceutical companies remaining in Peru that are small to mid-size and do not have a global presence. The establishment of bilateral investment treaties and the cost associated with pharmaceuticals as a result of intellectual property laws are two primary reasons global companies are overtaking smaller firms in Peru. Below, you will find a deep dive of my findings.
RESEARCH FINDINGS
Gartner defines a small business as having 1-99 employees and an annual revenue of less that $50 million. Medium-sized business are defined as having 100-999 employees, with an annual revenue between $50 million and $1 billion. Despite exhaustive research through numerous industry and market reports, as well as trusted media sites, there was not enough information available to create a list of top 10 Peruvian pharmaceutical companies that meet this criteria. I have included information for two Peruvian-based pharma companies that, although they do not meet the criteria for small to mid-size businesses, provide a better understanding of the pharmaceutical market in the country.
With the establishment of numerous bilateral investment treaties with countries around the world, Peru has become significantly more competitive in the landscape of worldwide investment. The development of strict intellectual property laws, along with the high cost of for pharmaceuticals, limits pharmaceutical innovation in developing countries. With the incentive to trade, most established Peruvian pharma companies were invested in between 2002 and 2012, thus expanding beyond the perimeters of Peru. This opens the gates for larger global companies to enter the Peruvian market and take over. Statistics show in 2014, Peru's pharmaceutical industry accounted for $669.15 (in millions) in imports, while only reaching $44.13 (in millions) in exports. This statistic confirms the fact that the Peruvian pharmaceutical industry is much more of a global enterprise.
A post from Biotechnology lists the top pharmaceutical companies in Peru at this time; however, most are global companies based in countries other than Peru, and also have enough employees to be considered large businesses. This information, listed below, provides an overall scope of the competitors in the market:
According to research from GlassDoor, there are 15 biotech and pharmaceutical companies with a presence in Peru. All of the companies are global, and only two, Hersil and Albis S.A., are based in Peru.
FUTURE OUTLOOK
Overall, the pharmaceutical sector is poised to see a continuation of the high level of activity and deal-making, with larger companies buying out small to medium size companies. With the increase in big-pharma competition, mid-size companies are likely to seek bolt-on deals or mergers in order to compete with rivals and adapt to the ever-changing market. Organic growth is difficult to realize; therefore, large pharmaceutical companies will continue their attempts to "buy" growth through acquisitions and mergers. "While political and market volatility may result in short-term pause in M&A activity globally as investors adopt a wait-and-see approach, we can expect transactions among small and medium-sized pharmas to pick up in 2017."
CONCLUSION
Peru has seen a shift from local and national pharmaceutical companies meeting the demands, to the strong presence of global entities taking over. The primary pharma companies in Peru are global and have amassed a workforce placing them outside the range of small to medium size businesses. Furthermore, the pharmaceutical industry is expected to see a continuation of the large number of acquisitions and mergers, as large companies seek to take over small to medium size companies in an effort to promote growth over their competitors.
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