Biopharma M&A started to in the first quarter of 2023 after a slow 2022. Major deals included Moderna’s acquisition of OriCiro Genomics for $85 million, expanding Moderna’s manufacturing capabilities for mRNA vaccines. Pfizer’s blockbuster $43 billion acquisition of Seagen will give Pfizer access to Seagen’s portfolio of cancer treatments, including the top-selling lymphoma medicine Adcetris. Sanofi’s $2.9 billion acquisition of Provention Bio will expand Sanofi’s focus on drugs for cancer and immune diseases and also give them access to Provention’s recently approved Type 1 diabetes drug, Tzield. These deals highlight the ongoing trend of M&A activity in biopharma therapeutics and platforms as companies seek to strengthen their pipelines, gain access to new technologies, and increase market share.
Between Q1 2022 and Q1 2023, the number of completed deals steadily increased, resulting in 124 deals over two years. The total value of M&A deals rose significantly, reaching $132 billion by Q1 2023. In Q2 2022, there was a notable surge, with $25.5 billion worth of transactions completed, compared to just $4.9 billion in Q1 2022. However, the value of M&A deals dropped to $13.9 billion in Q3 2022 before bouncing back to $36.2 billion in Q4 2022. In Q1 2023, the number of completed deals and the total M&A value reached their highest levels, with 27 deals completed and a total M&A value of $51.4 billion.
The total amount of M&A cash that didn’t include contingencies increased significantly between Q1 2022 and Q1 2023, reaching $122.2 billion. In Q2 2022, there was a surge in this type of M&A cash, with $23.3 billion worth of deals completed, compared to just $2.2 billion in Q1 2022. However, the M&A cash without contingencies dropped to $13.1 billion in Q3 2022 before rising again to $33.5 billion in Q4 2022. These fluctuations in M&A cash could be due to various reasons, including changes in market conditions, regulatory issues, or funding availability. In Q1 2023, the number of completed deals and the total M&A cash without contingencies reached their highest levels, with 27 deals completed and a total M&A cash of $50.1 billion.
M&A – Biopharma Therapeutics & Platforms Vs Other Life Sciences
In Q1 2023, the Biopharma Therapeutics and Discovery Platforms subsector had the highest number of completed M&A deals, with a total of 25. This subsector is focused on developing new therapies and drugs to treat diseases and includes companies involved in drug manufacturing, clinical trials, and drug discovery. The second-highest number of M&A deals in Q1 2023 were in the Diagnostics, Sequencing, Omics, and Tools subsector, with 18 deals completed. The MedTech, Device, Digital Tx, and Wearables subsector had 8 M&A deals in 2023, making it the third-largest subsector in M&A activity. The Manufacturing Tech, Others subsector had the lowest of M&A deals in Q1 2023, with only 7.
Regarding funding share in M&A deals, the Biopharma Therapeutics and Discovery Platforms subsector had the highest share in Q1 2023, accounting for 43% of all deals. The Diagnostics, Sequencing, Omics, and Tools subsector had the second-largest share of M&A deals, with a 31%. The MedTech, Device, Digital Tx, and Wearables subsector had a 14% share, while the Manufacturing Tech and Others subsector had the smallest share of funding, with only 12% of M&A deals in Q1 2023.
During Q1 2023, the Biopharma Therapeutics and Discovery Platforms subsector had the most significant total deal value, reaching $51.9 billion. The MedTech, Device, Digital Tx, and Wearables subsector had the second-highest deal funding, with $4.8 billion. The Diagnostics, Sequencing, Omics, and Tools subsector had a lower total deal value of only $0.9 billion, while the Manufacturing Tech and Others subsector had the lowest total deal value in Q1 2023, with only $0.2 billion.
- In January 2023, Moderna acquired OriCiro Genomics for $85 million, citing the company’s excellent tools for synthesizing plasmid DNA. OriCiro’s cell-free synthesis and amplification technologies offer a more efficient alternative to traditional cloning using E. coli bacteria, eliminating the need for post-synthesis purification.
- In January 2023, Chiesi announced its plan to acquire Amryt Pharma for $1.25 billion, offering a 107% per share premium over the stock’s closing price. AstraZeneca also revealed its $1.3 billion acquisition of CinCor Pharma, while Ipsen disclosed its $952 million upfront deal for Albireo. The total upfront consideration of $3.5 billion for these acquisitions is the highest announced at J.P. Morgan’s conference since 2019.
- In March 2023, Pfizer agreed to purchase Seattle-based Seagen for $43 billion in a significant deal that would bring together a pharmaceutical company with a biotech firm that pioneered a new form of tumor-killing therapy. This acquisition is Pfizer’s most significant since its purchase of Wyeth in 2009 and the most substantial in the pharmaceutical industry by value since AbbVie’s $63 billion takeover of Allergan in 2019. The acquisition of Seagen will provide Pfizer with control of Adcetris, the top-selling lymphoma medication, and a pipeline of cancer treatments.
- In March 2023, Sanofi announced it would acquire Provention Bio for $2.9 billion. Provention Bio recently received FDA approval for Tzield, a new type of injectable drug designed to delay the onset of Type 1 diabetes.
Mergers and Acquisitions have been a prominent feature of the biopharmaceutical industry, and their prevalence continues to grow as companies seek to remain competitive. These deals provide access to new technologies and products, increase market share, and reduce costs. In the biopharmaceutical industry, M&A activity is especially prevalent in the therapeutics and platforms sectors, where R&D costs are high and regulatory hurdles are significant. The Q1 of 2023 saw several notable deals highlighting the continued consolidation trend. While M&A deals offer companies many potential benefits, they also carry significant risks of integration challenges, regulatory hurdles, and cultural differences. Such deals can have significant implications for patients and healthcare systems, including potential drug pricing, access, and availability changes. As such, it is crucial for companies to approach M&A carefully and to consider the potential consequences for all stakeholders.