Upward Trajectory For Biotech/Pharma M&A: Sector Trends Towards Pre-Pandemic Levels, Forecasts Positive For 2024

According to the Global Data report, the pharma sector in Q3 2023 witnessed deals worth $28 billion, down 28% from the $54 billion recorded in Q2 2023. 

Deal volume fell 9% from 242 deals in Q2 2023 to 221 M&A deals in Q3 2023.

PricewaterhouseCoopers wrote in its Pharmaceutical and Life Sciences: U.S. Deals 2024 Outlook. "As regulators' perspectives on key deal factors become better understood, there may be a return of larger deals, along with continued interest in the $5 billion to $15 billion deals to fill targeted strategic gaps."

"Despite some stabilization in the macroeconomic environment and the potential for a soft landing in sight, continued geopolitical and regulatory uncertainty seems a given in 2024," PWC added in its report.

The pharmaceutical and life sciences sector experienced a notably robust year in 2023, nearing pre-pandemic levels in both M&A deal value and volume, the PWC report added. 

Anticipations for 2024 suggest continuing this trend, projecting comparable activity levels within the range of $225 billion to $275 billion across all subsectors.

Notable Deals in 2023

• Pfizer Inc PFE acquired Seagen Inc SGEN for $43 billion.
• Bristol Myers Squibb & Co BMY agreed to acquire Karuna Therapeutics Inc KRTX for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired. 
• Merck & Co MRK acquired Prometheus Biosciences for $200.00 per share in cash for a total equity value of ~$10.8 billion.
• AbbVie Inc ABBV to acquire ImmunoGen Inc IMGN and its flagship cancer therapy Elahere, for $31.26 per share in cash. The transaction values ImmunoGen at a total equity value of approximately $10.1 billion. 
• AbbVie Inc ABBV will acquire psychiatric and neurological disorders player Cerevel Therapeutics Holdings, Inc CERE for $45 per share in cash with a total equity value of approximately $8.7 billion.
• Biogen Inc BIIB agreed to acquire Reata Pharmaceuticals Inc RETA for $172.50 per share in cash, reflecting an enterprise value of approximately $7.3 billion.
• Bristol Myers Squibb & Co BMY agreed to purchase Mirati Therapeutics Inc MRTX at $58.00 per share in cash, amounting to an overall equity valuation of $4.8 billion, with an additional Contingent Value Right at $12.00 per share in cash, offering an extra $1.0 billion in value opportunity.
• Japanese healthcare company Astellas Pharma Inc ALPMY has agreed to buy Iveric Bio Inc ISEE for $40.00 per share in cash for a total equity value of approximately $5.9 billion.
• Most recently, Bristol Myers Squibb & Co BMY has agreed to acquire RayzeBio Inc RYZB for $62.50 per share in cash, for a total equity value of approximately $4.1 billion, or $3.6 billion net of estimated cash acquired.
• Image by Steve Buissinne from Pixabay