Deal activity remains vibrant within the pharmaceutical industry between 2014 and H1 2019

From 2014 to the first half (H1) of 2019, the pharmaceutical and healthcare industry recorded 2,882 deals that fell within the gene therapy, immuno-oncology, microbiome and orphan drug space. Comprising strategic partnerships, licensing agreements and mergers and acquisitions (M&As), these deals were worth $1,068.8bn in total, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, ‘Deal-Making Trends in Pharma – Thematic Research’, reveals that the largest deal type in terms of total value was M&As at $855.4bn, driven by pharmaceutical companies with sparse/non-diverse pipelines and/or top revenue drugs nearing patent expiration (and subsequent generic erosion) seeking to acquire, merge or initiate asset transactions. In addition, the largest deal type, in terms of total deals, was strategic partnerships with 1,361 deals, comprising companies aiming to share resources and expertise for mutual benefit.

Jesus Cuaron, PhD, PPM, Associate Director of Cardiovascular and Metabolic Disease (CVMD), as well as Gender Health Pharma at GlobalData, comments: “The therapeutic theme with the largest number of deals was immuno-oncology with 270 deals in 2018. This represents a growth of 63% since 2014. Gene therapy showed similar growth (62%) with 133 deals in 2018 compared to 82 deals in 2014.”

It is expected that the pharmaceutical industry will continue to be attractive for high volumes of deal activity in the future, owing to the fact that big pharma has a track record of making deals with companies that have a focus on highly specialized biologics and other high-value therapies. Large-value deals such as Takeda’s acquisition of Shire, and Bristol-Myers Squibb (BMS) acquiring Celgene in 2019, are becoming more common, signalling a new strategy in which stakeholders capitalize on the strengths of other companies in order to overcome barriers to financial success.

Cuaron concludes: “Companies identified by GlobalData as being strong acquisition target candidates include those with drugs that fall into one of the major therapeutic themes – gene therapy, immuno-oncology, microbiome, orphan drugs. These target candidates have drugs in both the preclinical stage and clinical stage settings, as well as privately owned and have seen little to no recent M&A activity in the past five years. Lastly, the list of target candidates also includes those that have had recent positive clinical trial data.”

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