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2024 M&A Deal Trends in Life Sciences

While healthcare deals declined by 40% in 2022 due to inflation, rising labor costs, and general pandemic recovery, we saw a different trend in 2023. Deals in the life sciences industry began to rise in 2023 and are expected to continue climbing in 2024. Other industries may not be booming with deals, but the life sciences industry seems to be the exception. With many companies facing patent cliffs within the decade, the need to acquire new and competitive therapies is pushing them toward M&A. Similar to last year, companies continue to balance risk in acquisitions with purchase combinations of payment upfront and milestone-based payments. We also continue to see a focus on rare and ultra rare diseases, as well as acquisitions based on partnerships between big pharma and small biotech companies. However, a few other major trends stood out in 2023 and are expected to continue in 2024. Many deals focused on therapies in a select few disease states, such as oncology and obesity, as well as innovative or first-in-class drugs. We saw a number of large deals in these areas in 2023, including Pfizer’s largest acquisition in 14 years. and we expect this trend to accelerate in 2024. After examining recent deals in the last year, we’ve highlighted three themes within the life sciences industry. Below, we outline 2024 M&A deal trends in life sciences as we move forward into this year.

  • Interest in Innovative and First-in-Class Drugs 
  • Growth in Oncology & Immunology Spaces 
  • Metabolic Disease Drives Interest in Acquisition Activity 

M&A Trends in Life Sciences 

Trend 1: Interest in Innovative and First-in-Class Drugs 

We saw major deals from big pharma to acquire companies with promising first-in-class drugs. Adding novel treatments to their portfolios allows companies to serve new patient populations and increases their impact in areas with significant needs. 

One example of this trend is Novartis’ acquisition of Chinook Therapeutics. Novartis has embraced innovation as a key pillar of its company strategy and pulled the approach through with this acquisition. By acquiring Chinook, Novartis expands its portfolio in rare kidney disease and brings unique treatments to the nephropathy space, setting the company up to serve new patients in the long run. 

June 2023: GSK acquires BELLUS Health 

In a $2 billion deal, GSK purchased BELLUS Health, a Canadian biopharmaceutical company, to acquire its refractory chronic cough (RCC) medication in development. The medication, known as camlipixant, is a potential best-in-class medication and will add to GSK’s strong portfolio and expertise area of respiratory medicine. Merck has also been working on a treatment for RCC; however, the FDA denied its data package in December as it did not meet substantial evidence of effectiveness for treating RCC. With an estimated 28 million patients suffering from chronic cough, GSK’s acquisition could position them to provide a solution to a condition without any currently approved drugs.   

August 2023: Novartis acquires Chinook Therapeutics 

In a $3.2 billion deal, Novartis bought the Seattle-based biopharma Chinook in order to acquire its innovative therapies in rare kidney disease. The Chinook acquisition helps Novartis expand its renal portfolio and subsequent pipeline while aligning with its strategy to focus on and bring in innovative medicine. 

December 2023: Bristol Myers Squibb acquires Karuna Therapeutics 

In December 2023, Bristol Myers Squibb entered into a definitive agreement to purchase the neurological-focused biotech Karuna Therapeutics for a total of $14 billion. While the deal hasn’t closed, the acquisition will add a potential first-in-class medication for Schizophrenia and first-in-disease treatment for Alzheimer’s psychosis. The acquisition adds to Bristol Myers Squibb’s neurological portfolio and provides a promising future with a unique pipeline. 

Trend 2: Growth in Oncology & Immunology Sector Deal Volume 

It comes without surprise that companies continue to grow their portfolios of oncology and immunology therapies. Several of the largest life sciences deals of 2023 all fall under these two spaces, which are expected to grow as cancer and autoimmune diseases impact more and more patients. For companies looking to serve patients through their medical journey, building strong oncology and immunology portfolios will help them achieve that goal. 

The most prominent acquisition in both oncology and in pharmaceuticals last year was Pfizer’s purchase of Seagen. In its largest acquisition since 2009, Pfizer doubled its pipeline of transformative cancer treatments as well as added a top-selling lymphoma drug, ADCETRIS, to its portfolio. Pfizer’s Chairman and CEO Dr. Albert Bourla was quoted saying, “Cancer remains a leading cause of death, and one in three people in the U.S. will receive a cancer diagnosis in their lifetime. With one of the largest investments in Pfizer’s history, we are going all in on cancer with the goal of delivering breakthroughs that drastically improve the lives of people with cancer.” Pfizer is joined by many other companies looking to help patients with cancer and autoimmune diseases this year by way of deals. 

June 2023: Merck acquires Prometheus Biosciences 

In an all-cash deal, Merck purchased Prometheus Biosciences, a biotechnology company based out of California and focused on immunology therapies, for $10.8 billion. The acquisition strengthens Merck’s portfolio in the immunology space, specifically in irritable bowel syndrome (IBS) and immune-mediated diseases. The company’s leading drug candidate includes indications for ulcerative colitis (UC), Crohn’s disease (CD) and Systemic Sclerosis-associated Interstitial Lung Disease (SSc-ILD). 

August 2023: Eli Lilly acquires DICE Therapeutics 

Lilly added to its immunology portfolio with the $2.4 billion acquisition of DICE Therapeutics. The immunology and inflammatory company contributes a pipeline of small molecule oral medications to fight chronic diseases. The deal brings together Lilly’s resources with DICE’s innovative technology and expertise to better help patients suffering from autoimmune diseases. 

November 2023: AbbVie acquires ImmunoGen 

In late 2023, AbbVie announced that it would be purchasing ImmunoGen, a Massachusetts-based biotech for $10.1 billion. The acquisition adds the ovarian cancer treatment Elahere to AbbVie’s growing portfolio of oncology therapies. Adding to their antibody-drug conjugate (ADC) program, AbbVie beat out several competitors who were also interested in the purchase. 

December 2023: Pfizer acquires Seagen 

In the largest life sciences acquisition of 2023, Pfizer purchased Seagen, a Seattle-based biotech company known for its cancer treatments. The $43 billion acquisition is Pfizer’s largest purchase since its 2009 purchase of Wyeth and adds a top-selling lymphoma drug, ADCETRIS, to Pfizer’s portfolio along with a pipeline of cancer treatments. 

Trend 3: Metabolic Disease Drives Interest in Acquisition Activity 

With Ozempic making headlines on a regular basis along with continued buzz from celebrities and social media about weight loss drugs, the weight loss and diabetes categories are guaranteed to keep growing in years to come. According to the Trust for America’s Health, 41.9% of adults and 20% of children in the US suffer from obesity. Additionally, 11.6% of the US population has diabetes according to the CDC. Companies realize these patient populations are still growing and looking for safe and effective treatments, therefore expanding therapies in these areas in a necessity. 

The metabolic trend can be seen amongst many deals in 2023. Novo Nordisk, the company behind Ozempic, added several new drugs to its obesity and diabetes portfolio through acquisitions. Other major players including Sanofi, Eli Lilly and Roche made acquisitions in these therapeutic areas. 

April 2023: Sanofi acquires Provention Bio 

To grow its diabetes portfolio, Sanofi purchased Provention Bio. In a $2.9 billion deal, the companies built the acquisition off a previously signed marketing agreement, which helped launch the first-in-class Type 1 diabetes drug TZIELD using Sanofi’s strong commercial team in the diabetes sector. Provention retained all rights in the marketing agreement until the acquisition closed in August 2023. 

August 2023: Eli Lilly acquires Versanis Bio 

Lily acquired cardiometabolic and obesity focused biopharmaceutical company Versanis for $1.9 billion. Payment was completed in a cash deal split between upfront payment and conditional payment based on development achievements and sales milestones. The deal allowed Eli Lilly to bring on Versanis’ top asset, bimagrumab. The therapy will treat adults living with overweight or obesity conditions and is currently in assessment in a Phase 2b study. 

August 2023: Novo Nordisk acquires Embark Biotech & Inversago Pharma 

Novo Nordisk acquired the Copenhagen based obesity firm Embark Biotech for $16 million. Embark focused on fat tissue burning and glucose and lipid uptake. This acquisition is one of two obesity-focused firms that Novo purchased in 2023. In a separate $1.07 billion deal, Novo Nordisk purchased Inversago Pharma, a Canadian biopharmaceutical company known for its weight loss and diabetes therapies. Both deals add to Novo Nordisk’s already booming obesity portfolio. Most recently in February 2024, Novo Nordisk announced intent to acquire Catalent, a leading global CDMO known for its broad end-to-end CDMO capabilities. This latest deal will change the metabolic disease industry and in particular, the customers involved in the pharma value chain. 

January 2024: Roche acquires Carmot Therapeutics 

In December of 2023, Roche announced that it would be acquiring Carmot Therapeutics, a clinical-stage biotechnology company with focus on obesity and diabetes. The deal was completed in late January 2024 for $2.7 billion upfront and potential for $400 in milestone payments. The acquisition gives Roche three potential injectable and oral drugs similar to Novo and Lilly’s therapies but supposedly with more tolerability and allowing for more muscle mass retention. 

Looking Ahead: 2024 M&A Deal Trends in Life Sciences

As we look at 2024, we expect many of the trends from 2023 will continue, including seeking out standout pipeline therapies to ensure growth while older patents expire as well as increasing oncology and immunology deals as new therapies are introduced for the growing patient populations. We also expect medications focused on metabolic diseases like diabetes and obesity will accelerate in years to come as the category and offerings become more accessible. 

Our M&A consulting team continues to have a pulse on the latest trends, insights, and capabilities required by company executives and investors alike when progressing through the deal process. To better understand how these trends impact your business, reach out to us. 

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Tags: Life Sciences Trends, Mergers and Acquisitions