M&A In Global Healthcare & Life Sciences – 2023

By Chris Dokomajilar

Jan 31, 2024

Analysis, M&A

M&A’s are resurging as deal values returned higher in the fourth quarter, though on fewer deals. Equipped with substantial resources, large pharmaceutical companies are inclined to pursue higher-value deals. Pfizer’s acquisition of cancer specialist Seagen is a prime example. This transaction is the largest in biopharma since 2019, valued at $43 billion. Bristol Myers Squibb aimed to acquire Karuna for $14.0 billion, featuring the innovative antipsychotic KarXT, with a 53% one-day premium. Merck’s successful acquisition of Prometheus Biosciences for $10.8 billion offered stakeholders $200 per share in cash, a 75% one-day premium.

CVS Health acquired Oak Street Health for $10.6 billion, with Oak Street receiving $39 per share in cash and a 16% one-day premium. AbbVie acquired ImmunoGen for $10.1 billion, gaining Elahere, an approved ADC for Ovarian Cancer. Lastly, AbbVie acquired Cerevel Therapeutics for $8.7 billion. The trend highlights opportunities for larger companies to acquire niche-focused smaller biotechs, enhancing innovation and expanding drug pipelines.

M&A In Biopharma, Platform, Medtech, And Diagnostics

During 2023, 254 deals were announced, a decline from the previous year’s 285. Despite the decrease in deal volume, the total deal value increased to $209.8 billion, up from $143.6 billion in 2022. Remarkably, a substantial portion of the 2023 M&A, $196.3 billion, involved cash transactions with contingents.

M&A By Subsector

In 2023, 118 transactions made $158.1 billion, surpassing the previous year’s $85.4 billion across 104 deals. The Medtech, device, digital Tx, and wearables also witnessed a rise in deal value, reaching $14.2 billion in 47 deals, compared to $28.3 billion in 51 deals in 2022. Diagnostics, sequencing, omics, and tools demonstrated resilience with 50 deals totaling $13.5 billion in 2023. In contrast, Manufacturing tech and others increased in deal value, rising to $24.0 billion across 39 deals in 2023 from $21.0 billion in 59 deals in 2022.

M&A In Biopharma Therapeutics For 2023

In 2023, M&A saw 101 transactions, surpassing 81 in 2022. The total M&A value in 2023 soared to $154.2 billion, a substantial increase from $78.9 billion in 2022. The cash component of these transactions reached $144.8 billion in 2023.

M&A By Clinical Development Milestones

The platform stage witnessed 5 transactions totaling $0.26 billion. Preclinical had 17 deals, contributing to a total value of $2.48 billion, of which $1.04 billion was in cash without contingents. Phase-I companies contributed 15 deals, generating $4.42 billion with $3.89 billion in cash. Phase-II saw 23 amounting to $22.82 billion, primarily in cash at $18.55 billion. The Phase-III saw 15 deals making $49.07 billion, predominantly in cash ($48.20 billion). Approved-stage engaged in 16 transactions, reflecting the highest total value at $74.43 billion, with $72.99 billion in cash.

M&A Across Top Modalities

Biologics (antibodies, DNA, RNA, and proteins) emerged with 35 deals valued at $90.0 billion; these cash components were $86.6 billion. Small Molecule attracted 39 deals, accumulating $54.4 billion, of which $50.0 billion comprised cash transactions. Gene Therapy and vectors, although fewer in number, with 6 deals, generated $1.9 billion in total with $1.4 billion in cash.

M&A In The Top Therapy Areas For 2023

Cancer therapies consistently rank highest, with 66 deals valued at $79.7 billion. Without contingents, the cash component reached $76.0 billion. Neurologic garnered 33 deals totaling $35.1 billion with a cash outlay of $33.3 billion. Autoimmune recorded 10 deals, contributing $21.4 billion, with $21.1 billion in cash.

Top M&A Deals In Global Healthcare & Life Sciences

Pfizer’s Acquisition of Seagen (December 2023)

Overview: Pfizer acquires Seagen, known for assets in cancer treatment.
Key Assets: Adcetris, Padcev, Tivdak, and more.
Transaction Details: $229 per share in cash, 32.7% premium, $43 billion total.

AbbVie’s Acquisition of Cerevel Therapeutics (December 2023)

Overview: AbbVie acquires Cerevel for assets in neurological treatments.
Key Assets: Emraclidine, Tavapadon, CVL-354, and Darigabat.
Transaction Details: $45.00 per share in cash, 22% premium, $8.7 billion total.

AbbVie’s Acquisition of Immunogen (November 2023)

Overview: AbbVie acquires ImmunoGen for Elahere, an ADC for Ovarian Cancer.
Key Assets: Elahere, pivekimab sunirine, IMGC-936, and IMGN-151.
Transaction Details: $31.26 per share in cash, 95% premium, $10.1 billion total.

Merck’s Acquisition of Prometheus Biosciences (June 2023)

Overview: Merck acquires Prometheus with a focus on immune-mediated diseases.
Key Assets: PRA-023, PRA-052, PR-1100, and more.
Transaction Details: $200 per share in cash, 75% premium, $10.8 billion total.

CVS Health’s Acquisition of Oak Street Health (May 2023)

Overview: CVS Health acquires Oak Street for primary care services to older adults.
Transaction Details: $39 per share in cash, 16% premium, $10.6 billion total.

BMS Acquisition of Karuna (Anticipated Closing First Half Of 2024)