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Tickers in this Article: PFE, MRK, BMY, HGSI, DNDN, MDVN, NVS, GE, MMM, ACL
Most in the medical profession probably would say the H1N1 virus was the healthcare story of 2009. Wall Street, on the other hand, most likely would point to the number of gigantic mergers that took place this past year as the real story. Big pharma appears to be getting even bigger. In fact, you'd need two hands to count all of the mergers. Who knows what's in store for the drug companies in 2010? I'd imagine more of the same. IN PICTURES: 8 Ways To Survive A Market Downturn

Merger Mania
In the first three months of 2009, three huge drug mergers, worth an estimated $155.8 billion, took place. The $61 billion combination between Pfizer (NYSE:PFE) and Wyeth was announced in January. In March, Roche Holdings agreed to buy the rest of Genentech for $46.8 billion and Schering-Plough agreed to merge with Merck (NYSE:MRK) for $41 billion. Together, the three combined entities have a market cap value of $344.4 billion, larger than the entire list of conglomerates in Yahoo Finance's IndustryCenter, which includes General Electric (NYSE:GE) and 3M (NYSE:MMM). Any way you look at it, big pharma operates gigantic businesses. (For related readings, check out The Wonderful World Of Mergers.)

Biotech Helped Along
Although Bristol-Myers Squibb's (NYSE:BMY) $2.4 billion acquisition of biotech firm Medarex in July was small potatoes in comparison to the three huge deals transacted earlier in the year, it did send a signal to investors that the drug majors were looking for companies with new and innovative products to introduce once the economy recovers. As a result, many biotech stocks have seen huge gains in 2009, as speculation grew about the next biotech buyout. Year-to-date, Human Genome Sciences (Nasdaq:HGSI) stock has risen over 1,000%, while stock of Dendreon (Nasdaq:DNDN) increased almost 500% and Medivation (Nasdaq:MDVN) stock more than doubled. If 2009 is any indication, you can bet some deals will be consummated early in the new year. (For more, read The Merger - What To Do When Companies Converge.)

Bottom Line
Swiss drug company Novartis (NYSE:NVS) paid $11 billion to Nestle in 2008 for 25% of its shares in eye care group Alcon (NYSE:ACL). In January, Novartis will likely pay Nestle $28 billion for another 52% of the company. It is presumed that Novartis will then buy the remaining shares from investors sometime in 2010. Therefore, we already know that $28 billion is on the table in the drug buyout game. How many and how much is anybody's guess, but it wouldn't surprise me if the total dollars involved in 2010 neared those of the past year. (For more, read Mergers Put Money In Shareholders' Pockets.) Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

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