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Biotech M&A’s at All Time High: Global Data

| Editor: Ahlam Rais

Global Data believes that Merck, Pfizer, and Amgen are all plausible candidates to expand via M&A.
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Global Data believes that Merck, Pfizer, and Amgen are all plausible candidates to expand via M&A. (Bild: Deposit Photos)

With a combined acquisition value of more than 26 billion dollars, drug makers Celgene and Sanofi plan to expand their oncology and hematology portfolios. Global Data predicts many other leading pharma players to expand through M&A.

London/UK – One month into 2018, biotech merger and acquisition (M&A) deal activity has already skyrocketed. Acquisitions from colossal drug makers, Celgene and Sanofi, total more than 26 billion dollars combined, and the companies have indicated a focus to expand their oncology and hematology portfolios. Many other large pharma firms are expected to join the race and boost their product portfolios through M&As, according to Global Data, a leading data and analytics company.

Over the course of January 2018, Sanofi planned to acquire Abylnx for 4.8 billion dollars and hemophilia-focused Bioverativ for 11.6 billion dollars. Meanwhile, Celgene snatched up the chimeric antigen receptor T-cell (CAR-T)-specialist Juno Therapeutics for approximately 9 billion dollars just weeks after acquiring Impact Biomedicines for up to 7 billion dollars, with 1.1 billion dollars upfront and additional milestone payments. The question now becomes, what implications these deals will have for both pharmaceutical companies and for other players in the biotech industry, and whether or not the streak is likely to continue.

Sanofi outbid Novo Nordisk’s offer and secured its second acquisition within a week, buying out the Belgium biotech Ablynx for 4.8 billion dollars. Sanofi has viewed rare diseases as an alternative to its diabetes business, which is currently being threatened by increasing competition and pricing pressure.

Celgene’s Q3 2017 earnings showed lower than expected revenues, leading to a decrease of 24 % in the share price over a six month period and to significant sales target cuts. Most of the reduction originated from a failed Crohn’s disease drug trial.

Fundamentally, large drug developers are facing pressure from maturing markets and require opportunities to spark revenue growth. Global Data believes that Merck, Pfizer, and Amgen are all plausible candidates to expand via M&A. All these large pharma companies have huge off-shore cash stores and are likely to make an acquisition to boost their mid-late stage pipeline.

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