The pace of mergers and acquisitions has accelerated. In this deep dive, BioSpace takes a closer look at the nature of recent deals and the players involved.
After a slow period during and after the acute COVID-19 crisis, the pace of mergers and acquisitions in the pharmaceutical and biotech sectors has accelerated. 2023 went out with a bang as biopharma firms struck a flurry of larger deals at the year’s end. That excitement carried into 2024 as several more companies announced major M&As during JP Morgan week. Indeed, Q1 2024 saw M&A activity increase by more than 100% compared with Q1 2023, according to a recent report from Leerink Partners, which forecast “biopharma M&A activity to remain elevated through the remainder of 2024.”
Here, BioSpace takes a closer look at the nature of these deals and the players involved.
Source: Numbers and values of M&As collated by BioPharma Dive as of June 11, 2024. Anticipated total 2024 M&As was calculated by BioSpace assuming the average rate through that point in the year would apply to the remainder.
Cancer in Focus
So far this year, oncology has been one of the most active therapeutic areas for M&A deals. In Q1 alone, several deals of more than $1 billion were either closed or announced, including the February completion of AbbVie’s purchase of ADC developer ImmunoGen for more than $10 billion. In addition to ADCs, radiopharmaceuticals have attracted interest, as highlighted by AstraZeneca’s potentially $2.4 billion purchase of Fusion Pharmaceuticals in March and Novartis’ announcement last month that it plans to buy Mariana Oncology for $1 billion upfront, with another $750 million in milestones.
According to the Leerink report, inflammation & immunology was the second most active therapeutic area, though obesity and neurology are also hot areas at the moment.
M&A Strategies
While M&A activity is on an upswing, there is a conspicuous absence of deals worth more than $5 billion. Novartis CEO Vasant Narasimhan has said that the company’s overall M&A strategy is “to focus on sub-$5 billion assets.” Similarly, Merck CEO Rob Davis told analysts that the company is “continuing to do smaller deals,” with a focus on acquisitions in the $1 billion to $15 billion range.
This trend away from mega deals may be in part due to the increasing number of FTC challenges to M&As. Other factors influencing biopharma M&A strategies include impending patent expirations. Merck’s cancer blockbuster drug Keytruda, for example, will in 2028 lose patent protection, also known as loss of exclusivity (LOE). “We have a lot of pressure from LOE, which essentially kind of forces us to go out and buy new assets,” Christiana Bardon, co-managing partner at MPM BioImpact, told BioSpace.
This article was originally published as a Special Edition of Biopharm Executive, BioSpace‘s weekly newsletter covering business and financial news. You can subscribe here.
