M&A deals surge in H1 2023, as Pfizer, Merck, Sanofi, Lilly announce buyouts
During this period, the biopharma industry witnessed a surge in high-profile mergers and acquisitions (M&As). Our analysis shows that total M&As during H1 2023 reached US$ 81.2 billion, as compared to US$ 89.6 billion for the full year 2022. By September 15, 2023, the total M&A deal value — at US$ 94.2 billion — had surpassed the total deal value for 2022.
PharmaCompass has noticed a shift in deal trends, particularly in modalities. For instance, biologics made up for 46 percent of all deals in H1 2022, and rose to over 50 percent in H1 2023, suggesting a growing interest in biologics.
Oncology and immunology are two key therapeutic areas that have seen significant scientific breakthroughs in recent years. Oncology witnessed 28 deals, worth a total of US$ 45 billion, followed by immunology with seven deals at approximately US$ 14 billion.
Our data does not include deals related to acquisition of products or facilities, divestment, medical devices, diagnostics and animal health. We have considered only deals announced in H1 2023, irrespective of when these transactions were completed.
Pfizer-Seagen, Merck-Prometheus amongst biggest transactions of H1 2023
The biggest transaction of H1 2023 was acquisition of for , announced in March. The deal is part of Pfizer’s move to mitigate a hit in revenues from declining sales of its Covid-19 products and the imminent expiration of patents for some of its top drugs.
As part of the deal, Pfizer will gain access to Seagen’s four approved cancer therapies, collectively generating nearly . This strategic acquisition bolsters Pfizer’s existing and impressive portfolio of 24 approved oncological therapies.
The second largest deal of H1 was purchase of for in April. The deal is centered around the potential of Prometheus’ candidate in phase 2 trials — PRA023 (now MK-7240) — to treat ulcerative colitis and Crohn’s disease. Merck’s CEO Robert Davis anticipates MK-7240 to be a multibillion-dollar drug.
Around the same time as the Merck-Prometheus deal, Japanese drugmaker announced of New Jersey-based eye drug developer for . Last month, the US Food and Drug Administration (FDA) approved Iveric’s intravitreal solution for the treatment of geographic atrophy — Izervay ().
Another significant deal announced in April was ’s buyout of Canada-based late-stage biopharmaceutical company . The acquisition is expected to further strengthen GSK’s specialty medicines and respiratory products.
Sanofi, Lilly, Novo Nordisk forge deals to strengthen diabetes, obesity portfolios
Over the last six months, drugmakers like , , and have beefed up their diabetes and obesity drug portfolios through acquisitions. The biggest deal in this field was Sanofi’s US-based for to access diabetes drug , the first and only therapy approved by the FDA to delay the onset of stage 3 type 1 diabetes (T1D) in adults and pediatric patients. This acquisition builds on a Provention Bio had signed with Sanofi in October 2022, one month prior to FDA’s approval of Tzield.
In July, had of for a potential value of . The deal will give Lilly access to phase 2 drug bimagrumab, a monoclonal antibody for the treatment of obesity and cardio-metabolic diseases. In June, Eli Lilly had announced the acquisition of for about to gain access to Sigilon’s cell therapy candidate SIG-002 for the treatment of type 1 diabetes. The same month, Lilly had announced of for around in order to bolster its immunology pipeline. The deal will grant Lilly access to Dice’s experimental drugs DC-806 (for treating psoriasis) and DC-853 (for treating a variety of autoimmune and inflammatory diseases).
Post the Eli Lilly-Versanis deal, announced of for up to to access the company’s lead development asset INV-202, an oral cannabinoid receptor blocker. INV-202 demonstrated weight loss potential in a phase 1 trial and is currently in a phase 2 trial for diabetic kidney disease.
Biogen, Novartis, Sobi announce buyouts in rare disease segment; Astra buys CinCor
The rare disease segment witnessed a when announced the acquisition of for . The deal gave Reata access to rare disease drug Skyclarys (), the first and only FDA-approved treatment for Friedreich’s ataxia (rare genetic neurodegenerative movement disorder) in adults and adolescents aged 16 years and older. Omaveloxolone was approved by the FDA in February 2023.
In June, had announced acquisition of American biotech for up to to expand its renal portfolio. Novartis will develop and commercialize Chinook’s lead asset and late-stage drug candidates and zigakibart for IGA nephropathy, a rare kidney disease. In May, Swedish blood disorder specialist has -based for , gaining access to the FDA-approved , a novel targeted therapy for blood-related cancers known as cytopenic myelofibrosis.
In January, Italy’s bought Ireland-based rare diseases drugmaker for up to . This deal includes Amryt’s approved drug, Filsuvez for epidermolysis bullosa, an inherited skin disease, which is approved in Europe. The same month, acquired developer for . The acquisition is expected to boost Astra’s cardio-renal pipeline with the addition of , a small oral molecule currently in phase 1 trial for the treatment of hypertension. Astra is optimistic about its potential in treating high blood pressure and chronic kidney disease, especially when used in combination with its blockbuster drug for cardio-renal diseases.
According to Bain & Company, global M&A value was down 44 percent in the first five months of 2023. The report cites factors such as macroeconomic and interest rate uncertainties to be complicating matters for both potential buyers and sellers. We can take heart from the fact that in comparison to the global data, M&As in the have actually grown in H1 2023.
Going forward, there are several factors that suggest deal making in the biopharma sector will pick up further. These include factors such as attractive valuations of biotechs, rising cash reserves of big pharma coupled with cash crunch being faced by several biotechs, and patent cliffs and loss of market exclusivity threatening the revenues of several large drugmakers. In short, H2 2023 is poised to be a lot different.