In the new reality for life sciences companies - one where the product development formula of the past no longer applies, where extensive M&A activity is needed to fill pipelines and mitigate risk, and where an increasing amount of attention and opportunity lie in emerging markets - prudent measures and strategic solutions are critical to succeed. Yet with all this change and uncertainty comes an immeasurable amount of opportunity.
Beyond the costs to develop new drugs and treatments, facility and real estate costs are among the highest expenses for life sciences companies, and are therefore top of mind as the industry refocuses and reprioritizes. The industry is challenged by the conflicting need to right size in mature markets, where sales and demand are waning and where M&A activity oftentimes results in excess or duplicative facilities, while strategically growing in emerging clusters in order to capture market share and savings opportunities. More than ever, it is essential to achieve the ideal portfolio balance, with the proper size and type of facilities in the right locations. Given that the industry is contracting in mature markets, creatively positioning dispositions and knowing how and when to hit the market, can greatly impact the timeline, and thus expense, of divestiture. Additionally, knowing in which locations to maintain and expand operations has major bearing on the ability to capitalize on skilled labor force and fiscal resources, and thus, efficiently achieve new product breakthroughs.
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