GlobalData, data and analytics company, on Tuesday announced that the mergers and acquisitions (M&As) in the biopharmaceutical industry have rebounded with a $76.9 billion increase in total deal value seen from 2022 to 2023.
In Q1 2024 alone, biopharmaceutical M&A reached a total deal value of $43.5 billion, with a 71 percent year-on-year (YoY) increase of mega deals that were valued at $1 billion or more compared to Q1 2023.
“The recent upturn in biopharmaceutical M&A signals a return in dealmaking confidence, as big pharma companies also look to mitigate the challenges such as the Inflation Reduction Act and upcoming patent expirations,” Alison Labya, Business Fundamentals Analyst at GlobalData said.
GlobalData’s recent The State of the Biopharmaceutical Industry 2024 report reveals that the surveyed healthcare industry professionals expected mega M&A deals to be one of the factors to have the greatest positive impact on the pharmaceutical industry in 2024.
The largest M&A deal reported in Q1 2024 was Novo Nordisk’s holding and investment company’s Novo Holdings’ $16.5 billion acquisition of US-based contract development and manufacturing organization (CDMO) Catalent, announced in February 2024. Another notable M&A deal was Gilead Sciences’ $4.3 billion acquisition of US-based company CymaBay Therapeutics, which was completed in March 2024.
“Companies developing antibody-drug conjugates (ADCs) and radiopharmaceuticals attracted high levels of M&A investment continuing into Q1 2024, as large pharmaceutical companies seek to replenish portfolios with those sought-after drug classes,” Labya said.
Johnson & Johnson acquired US-based ADC company Ambrx Biopharma for $2 billion in March 2024, and AstraZeneca also announced in the same month to acquire US-based radiopharmaceutical company Fusion Pharmaceuticals for $2 billion.
Oncology was the top therapy area for M&A deals in Q1 2024, with a total deal value of $29 billion. However, immunology-focused M&As had the largest growth in deal activity compared to Q1 2023, with a 314% surge in deal value in Q1 2024 totalling to $14 billion.
“Q1 2024 saw an increase in billion-dollar M&A transactions involving large biopharmaceutical companies, such as Gilead and Novartis. Given that the biopharmaceutical industry can overcome regulatory challenges set by the Federal Trade Commission, the remainder of 2024 is poised for continued M&A investment from large biopharmaceutical companies, which could accelerate R&D and the launch of innovative drugs,” Labya added.
