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While MRE is undervalued by the market based upon the analysis it is not a viable investment at this time. The industry is at a vital point in its lifecycle, as is MRE. This industry has long been regarded as a highly profitable, but as the political, economic, and demographic landscapes begin to change in the US and around the world, MRE must reevaluate its competitive strategies in order to continue the growth it has enjoyed in the past.
The global industry faces a loss of $130 billion in annual sales by 2012. This could be caused by a variety of factors, such as expiration of patents, cuts in R&D budgets which limit the opportunities for the development of new products, reductions to sales forces, and tougher regulations.
While there is a high amount of uncertainty facing the industry today, there are also many positives on the horizon. M&A activity is creating stronger, more versatile firms. Demographic factors in emerging markets, such as India, which provides the fastest growing middle class in the world, along with the aging population in the United States, will continue upward shifts on the demand for pharmaceutical products. Also, companies are finding more cost effective ways to pursue R&D by outsourcing to biotech firms.