On the Up and Up

Prior to COVID-19, mergers and acquisitions (M&A) activity within the biopharma industry was booming, managing to reach an all-time high level of US$414 billion (€384 billion) worth of deals in 2019 (1). When the pandemic hit, not only did company priorities shift to working on solutions to help prevent or even cure COVID-19 but there were also lockdowns and the need to work remotely, which has impacted the timings of potential deals.

However, in 2023, the industry rebounded somewhat in terms of M&A activity with deals reaching their highest level since 2019 at approximately US$152 billion (€141 billion) (2). During 2023, there was one ‘mega-deal’ in the form of Pfizer’s acquisition of Seagen, which was worth US$43 billion (€40 billion) alone, the next highest deal was worth US$14 billion (€13 billion) for Bristol Myers Squibb’s acquisition of Karuna Therapeutics (2).

This positive upswing, representing a 79% increase from the prior year (2022), seems to be continuing into 2024. In fact, on 5 Feb. 2024, Novo Holdings’ acquisition of Catalent for US$16.5 billion (€15.3 billion) was announced (3). Under the terms of this agreement, Novo will acquire Catalent in an all-cash transaction that is expected to close towards the end of 2024. Additionally, Novo has specified that it will sell three of Catalent’s fill/finish sites, with related assets, located in Anagni (Italy), Bloomington (Indiana, USA), and Brussels (Belgium) to Novo Nordisk.

Also, on 5 Feb. 2024, European industry giant, Novartis, revealed its plans to acquire German biopharmaceutical company focused on oncology medicines, MorphoSys, for €2.7 billion in cash (4). Once Novartis has acquired MorphoSys, it will own pelabresib—a late-stage oncology therapy designed to inhibit the function of bromodomain and extra-terminal domain (BET) proteins—which will complement Novartis’ oncology pipeline.

Good M&A deals can provide companies with substantial growth opportunities and given the current macroeconomic, pricing, and regulatory risks; inorganic growth will be depended upon. Add the looming ‘patent cliff’ to the mix and a surge in M&A activity seems a no-brainer for the near future (5).

References

1. Saikia, R. Is COVID-19 Changing the Rules of the Game for Biopharmaceuticals M&A? Financier Worldwide, Expert Briefing, January 2021.
2. Gores, M.; Harries, W. Biopharma M&A Outlook for 2024. IQVIA.com, Blog, 12 Jan. 2024.
3. Catalent. Novo Holdings to Acquire Catalent. Press Release, 5 Feb. 2024.
4. Novartis. Novartis to Strengthen Oncology Pipeline with Agreement to Acquire MorphoSys AG for EUR 68 per Share or an Aggregate of EUR 2.7 bn in Cash. Press Release, 5 Feb. 2024.
5. Spence, P.; Baral, S.; Ural, A.; Boodhoo, A.; Evans, J. Life Sciences Deals are Back—Making the Right Deals in a Time of Change. 2024 EY M&A Firepower Report, 8 Jan. 2024.

About the author

Felicity Thomas is the European/senior editor for Pharmaceutical Technology Group.

Article details

Pharmaceutical Technology Europe
Vol. 36, No. 2
February 2024
Page: 6

Citation

When referring to this article, please cite it as Thomas, F. On the Up and Up. Pharmaceutical Technology Europe 2024 36 (2) 6.