Sector News

Rooting for pharma's deal volume to reach 2015's heights?

October 31, 2016
Life sciences

Remember 2015, when pharma was shattering deal-volume records? These days, it seems like a pretty long time ago.

In Q3, deal activity has headed south–both in volume and in value–compared with the year-ago quarter, according to PwC’s Global Pharma & Life Sciences Deals Insights Q3 2016 Update. And the decrease in value has been “considerable.”

The reason? Pharma hasn’t seen as many large deals–especially those greater than $1 billion. The industry registered just 7 in the quarter, with Pfizer’s $14.1 billion Medivation buy taking the cake.

And the reasons for that? They include potential interest rate movements and recent attention on drug pricing, which has brought an unwelcome spotlight on more than a few specialty players. As a result, potential acquirers are waiting “to see how this trend develops in the next few quarters,” the authors wrote.

As PwC notes, the recent M&A decline means “deal volumes in the future have the ability to trend upward.” But that doesn’t mean they will.

Instead, what’s more likely is that they’ll stay “depressed” until “uncertainty around general economic factors and industry conditions” are cleared up.

And even if deal volumes head upward again by the end of the year–an event that’s possible, PwC acknowledged, considering that companies including Valeant and Endo are currently assessing their portfolios–2016’s total deal value may still look low relative to prior years.

Potential acquirers are becoming “more disciplined with deal pricing” and scouting smaller targets.

If that shift in thinking doesn’t sound familiar, consider Allergan: After last year agreeing to technically buy Pfizer in a record-breaking $160 billion megadeal–later thwarted by the U.S. Treasury–Allergan recently committed itself to vastly smaller “stepping-stone deals,” as CEO Brent Saunders likes to call them.

By Carly Helfand

Source: Fierce Pharma

comments closed

Related News

May 15, 2022

Novo Nordisk and Flagship Pioneering announce a strategic collaboration to create a portfolio of transformational medicines

Life sciences

The companies will explore opportunities to apply Flagship’s innovative bioplatforms – an ecosystem that currently comprises 41 companies – to scientific challenges in disease areas within cardiometabolic and rare diseases and initiate research programmes based on these.

May 15, 2022

BD, Babson set sights on bringing simple blood collection into the home

Life sciences

BD is expanding its long-running partnership with the blood collection company Babson Diagnostics. The two companies have been working together since 2019 on a device that can gather small volumes of blood from the capillaries in the fingertip without requiring any specialized training, and beginning with a focus on supporting primary care in retail settings.

May 15, 2022

CSL’s $11.7B Vifor buy, 2021’s biggest biopharma M&A deal, hits antitrust delay

Life sciences

Wednesday, Australian biotech CSL said (PDF) the regulatory review of its $11.7 billion acquisition of Switzerland’s Vifor Pharma will take “a few more months,” suggesting it won’t be able to close the transaction by June 2022 as previously expected.