Consolidation
Nine merger and acquisition (M&A) deals worth more than US$1 billion were made in the global pharmaceutical and bio industries in the first half of this year.
According to the Korea Biotechnology Industry Organization (KBIO) on July 2, the global pharmaceutical and bio industries recorded nine M&A deals worth more than US$1 billion in the first half of the year including Pfizer’s US$43 billion acquisition of Seagen in March. Pfizer took over U.S.-based Seagen, an antibody drug conjugate (ADC) company, to strengthen its position in the anticancer drug market and secure new therapies.
The second is Merck’s acquisition of Prometheus Biosciences. The US$10.8 billion deal was sealed in April. The deal will enhance its pipelines in ulcerative colitis and Crohn’s disease, among others, and solidify its position in immunology.
The third is Astellas’ acquisition of U.S.-based Iveric Bio. Astellas is a Japanese company. The deal was worth US$5.9 billion. It strengthened Astellas’ pipelines in blindness treatments, including macular degeneration drugs.
Swiss drugmaker Novartis’ acquisition of U.S.-based Chinook Therapeutics (US$3.5 billion) was the fourth largest M&A deal of the first half of the year. The acquisition gives Novartis a pipeline of autoimmune kidney disease therapies including treatments for immunoglobulin A nephropathy (IgAN).
The fifth largest M&A deal was Sanofi’s acquisition of U.S. diabetes drug company ProbentionBio. The US$2.9 billion deal gave Sanofi exclusive access to type 1 diabetes treatments.
The sixth largest M&A deal was made as U.S.-based Eli Lilly inked a contract to absorb U.S.-based Dice Therapeutics for US$2.4 billion. The deal gave Eli Lilly access to Dice’s drug discovery platform DELSCAPE and increased its power in developing drugs for autoimmune diseases.
Seventh place was taken by GlaxoSmithKline’s (GSK) acquisition of Canada’s Velus Health. The US$2 billion deal enabled GSK to secure candidates for the treatment of intractable chronic cough.
The eighth case is AstraZeneca’s (AZ) acquisition of Cincor Pharma in the United States. It was worth US$1.8 billion. The deal granted AZ rights to candidates for hypertension and chronic kidney disease.
The final and ninth one is the acquisition of Switzerland’s VectivBio by US-based Ironwood Pharmaceuticals for US$1 billion. With this acquisition, Ironwood Pharmaceuticals became able to get its hands on candidates for various rare diseases, including acute graft-versus-host disease, or GVHD.
The global pharmaceutical and biotech industries have seen a significant decline in M&A size and number due to inflation, high interest rates, and the IRA in the United States since 2022. This impact continued in the first half of this year, making the M&A market sluggish. The market will not rebound easily down the road, the KBIO forecast.
“Multinational pharmaceutical companies are faced with patent expirations for their blockbuster drugs and feel a sense of urgency to secure new treatments and therapies,” KBIO said. “They are expected to increase M&A activities in the thick of declining valuations of biotech companies.”