Despite a temporary slowdown during the early days of the pandemic, the pharma sector has witnessed a steady rise in M&A activity over the years. The number of deals climbed from 23 in 2018 to 43 in 2022. Major players driving this trend include Sanofi, Merck & Co. and Novartis. Those three players have made significant acquisitions to bolster  core assets and capabilities in specialized areas such as immunology, oncology and gene therapy.

For instance, in 2022, Merck acquired Prometheus Biosciences for $11 billion to strengthen its presence in immunology, while Sanofi purchased Provention Bio for roughly $2.9 billion to add a first-in-class therapy for type 1 diabetes. Novartis has also been on the hunt, with approximately $31 billion in deals since 2018 that have strengthened its Innovative Medicines portfolio.

M&A deals

Bar chart showing the top 10 most active pharmaceutical companies in M&A activity from 2018 to 2023. Sanofi, Merck & Co., and Novartis lead the list, highlighting their strategic growth through acquisitions.

A look at Sanofi’s pharma M&A activity in recent years

The French biopharma has sharpened its focus on AI in recent years to strengthen its core businesses and bolster its portfolio. In terms of M&A deals, Sanofi made several major ones recently. In September 2021, it acquired Kadmon Holdings for close to $2 billion to add Rezurock for chronic graft-versus-host disease to its transplant portfolio. Another key buy was Provention Bio in March 2023 for $2.9 billion, adding the $200k type 1 diabetes therapy teplizumab to its offerings. Sanofi’s $3.2 billion acquisition of Translate Bio in August 2021 marked a significant step in accelerating mRNA therapeutics and vaccines.

Merck diversifies assets, augments pipeline through high-profile acquisitions ahead of Keytruda patent loss

Merck & Co. has executed several high-profile M&A maneuvers in recent years to diversify its asset base ahead of the imminent patent cliff for its blockbuster PD-1 inhibitor, Keytruda, in 2028. In October 2021, Merck acquired the biopharmaceutical upstart Acceleron Pharma in a $11.5 billion deal. The proposed $10.8 billion acquisition of Prometheus Biosciences in 2023 aims to buttress Merck’s burgeoning immunology pipeline. Similarly, the $1.85 billion acquisition of Pandion Therapeutics also augments Merck’s immunology assets with a novel approach to treating autoimmune disorders.

Novartis goes on biotech shopping spree to boost portfolio

The Swiss Big Pharma has actively pursued M&A deals to build therapeutic depth and new technology platforms, often acquiring earlier-stage biotech companies despite the risks. For example, in June 2023, the company announced its acquisition of Chinook Therapeutics for up to $3.5 billion to add Chinook’s lead drug candidate, atrasentan, to its nephrology portfolio. Novartis has also eyed the RNA landscape for M&A opportunities to expand its research “gameboard” and has tapped Wall Street analyst Ronny Gal as its new M&A czar, indicating it is poised to continue its active M&A strategy. Some of Novartis’ other major acquisitions in recent years include The Medicines Co. for $9.7 billion in 2019, AveXis for $8.7 billion in 2018, Endocyte for $2.1 billion in 2018 and Gyroscope for $800 million in 2021.