Value of pharma’s M&A deals remain high, despite COVID-19
Posted: 8 January 2021 | Hannah Balfour (European Pharmaceutical Review) | No comments yet
Analysts say M&A deals continue to be a core driver of pharma/biopharma industry growth and that 2021 will likely be another year of high deal value.
According to an analysis, the total value of mergers and acquisitions (M&A) deals in the pharma/biopharma industry during 2020 was $228bn, the second highest in the last five years.
GlobalData reported that up until the 1 December 2020 the total value of M&A deals for pharma/biopharma was only down 13 percent from 2019, the year with the highest total M&A deal value since 2016 ($262bn). The analytics company added that the total value of deals in 2020 was also twice that of 2017 ($126bn).
Madeleine Roche, Pharma Analyst at the company, commented: “Bio/Pharma companies continue to utilise 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.”
The enterprise added that AstraZeneca’s announcement that it will acquire 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.
According to GlobalData, M&A deals are a core driver of growth in the industry and COVID-19 has potentially added to M&A activity, as Big Pharma market caps have risen while R&D and sales activities are hindered.
Roche concluded that the trend of mega-deals between large corporations is likely to continue in the next few years, “as Big Pharma favours M&A over internal R&D as a means of innovation and portfolio diversification”. She also predicts the trend of increased deal values and decreased deal volumes will continue as well.
Related topics
Big Pharma, Biopharmaceuticals, Industry Insight, Mergers & Acquisitions, Research & Development (R&D)
