Submission Date


Document Type



Business & Economics


Andrew Economopoulos

Committee Member

Andrew Economopoulos

Committee Member

Bryan Buckley

Committee Member

Houghton Kane

Department Chair

Andrew Economopoulos

Project Description

Many firms in the pharmaceutical industry turn to acquisitions when faced with gaps in their drug development pipelines and patent expirations as an alternative to making long-term investments in internal research and development. Investors are generally negative on this strategy, and upon the announcement of a pharmaceutical acquisition the stock of the acquiring firm often drops. This decline in share price creates an opportunity for the investor who can identify the characteristics of a target firm that increase the probability that the transaction will ultimately be a success, as measured by the subsequent appreciation in the acquirer's stock. It is expected that the characteristics of a successful acquisition are related to the target firm's pipeline. Specifically, higher quantities of late-stage drugs in the target's pipeline as well as a focus on developing biotechnology drugs are expected to lead to superior returns for the acquiring firm's investors.