Companies that specialize in supplying the world's drug companies may soon be in for a huge shakeout. Several industry insiders tell the Boston Globe that a range of cost-conscious drug companies will start narrowing their lists of suppliers, putting a major squeeze on suppliers and likely forcing many to merge. The Globe sees this as potentially the next big wave of consolidations to shake the life sciences industry. "The industry should consolidate," John L. Sullivan, a financial analyst with Leerink Swann & Co. in Boston, tells the newspaper. Small suppliers would benefit by joining forces with a worldwide supplier while big outfits can expand their portfolio of products.
"I think that the large drug companies are looking for fewer suppliers," says PerkinElmer CEO Robert F. Friel. "I think there is a natural evolution where there is consolidation and that will continue."
- read the article from The Boston Globe