Mergers and acquisitions activity in Bio/Pharma industry remains high despite COVID-19

Up to December 1, 2020, mergers and acquisitions (M&A) deal value in the Bio/Pharma industry was down only 13% compared with last year, with a total deal value of $228bn compared with $262bn in 2020, and almost twice the 2017 total deal value of $126bn. This made 2020 the second highest year for M&A deal value of the last five years, says GlobalData, a leading data and analytics company.

Madeleine Roche, Pharma Analyst at GlobalData, comments: “Bio/Pharma companies continue to utilize M&A as a source of innovation and development, with large cap Bio/Pharma in particular, preferring to acquire an innovative biotech rather than risk the staggering and ever-growing cost of internal R&D investment.”

AstraZeneca’s announcement that it will acquire rare disease company Alexion Pharma for $39bn, with the deal expected to be completed in Q3 2021, suggests 2021 will be another year of high deal value despite lower deal volume.

Roche continues: “It is likely that this trend of mega-deals will continue, as Big Pharma favors M&A over internal R&D as a means of innovation and portfolio diversification.”

M&A deals are a core driver of growth in the Bio/Pharma industry. COVID-19 has potentially boosted M&A activity as Big Pharma market caps has risen while R&D and sales activities are hindered.

Roche adds: “The trend of mega-deals between large corporations will continue in the next few years along with the trend of increased deal values and decreased deal volumes.”

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