biotech acquisitions Archives - Medical Design Sourcing

Do rising interest rates actually fuel pharma M&A? Sometimes, yes

[Andrey Popov/Adobe Stock]

Conventional wisdom holds that rising interest rates curb M&A activity, but an analysis of the pharma and biotech M&A data from 2018 to early October 2023 reveals a counterintuitive trend — at least over the short term.

As interest rates have risen in 2023, pharma deal-making has remained strong although the deal size has dipped. As rates surpassed 2.4% from September 2022 onwards, deal activity jumped to an average of roughly 6 deals per month. For context, when interest rates ranged from 1.4% to 2.4% from 2018 to 2019, the industry averaged roughly 2 deals per month. While there was a relative increase in M&A volume during the historically low-interest period of 2020 to August 2022 when rates dropped to as low as 0.05%, the average number of deals per month then — 3.3 — is still markedly lower than recent levels.

One possibility is that higher interest rates are s…

An overview of the GLP-1 landscape in obesity therapeutics

[Feng Yu/Adobe Stock]

The GLP-1 drug market continues to boom lately thanks to highly effective new medications like Novo Nordisk’s Wegovy and continued demand for the drug class in diabetes. The runaway success of Wegovy and Ozempic (both formulations of semaglutide) has caused Novo Nordisk’s share price to skyrocket in 2023, briefly making the Danish pharmaceutical company the most valuable in Europe by market capitalization. Novo Nordisk’s growth has even exceeded Denmark’s entire economic output.

Far-ranging GLP-1 landscape projections

Given the massive potential of the obesity drug market, with projections ranging from Goldman Sachs’ $44 billion to Barclays’ $100 billion by 2030, Big Pharmas such as Novo Nordisk and Lilly are engaging in billion-dollar acquisitions of smaller biotechs with promising obesity pipelines.

At present, Novo Nordisk is having troubling ke…

Sanofi, Merck and Novartis top pharma M&A in recent years

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.

Bar chart showing the top 10 most active pharmaceutical companies in M&A activity fr…

Illumina’s record EU fine could drive smaller M&A pharma deals

This table summarizes some of the largest fines from the European Union on companies for a variety of violations.

Illumina, the world’s largest gene sequencing company, faces a record fine from the E.U. for acquiring startup Grail without approval. The $8 billion deal closed in August 2021 despite ongoing EU. and U.S. investigations. A year later, the EU prohibited the merger, citing reduced innovation and choice. The expected $453 million fine, which would be the largest ever in the E.U. that aims to deter unauthorized deals. The chart on the right shows some of the most substantial fines in EU history.

Francis deSouza resigned as CEO and director of Illumina Inc. on June 11, 2023. The company named Charles Dadswell, senior vice president and general counsel, as interim CEO, while the board conducts a search for a new CEO.

Grail’s pioneering work on early cancer detection through blood tests pu…