Pharma M&A activity primed for another high-flying year in 2024

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Despite challenging interest rates and regulatory environment, pharma M&A activity surged in 2023 with deal volume up more than 30% from the prior year based on a review of more than 200 acquisitions since 2018. The total disclosed deal value in 2023 also more than doubled the prior year’s tally to surpass $100 billion. While the pandemic boosted research into areas such as mRNA, it had something of a chilling effect on M&A. As pharma companies begin to put the pandemic in the rearview mirror, M&A activity has gained momentum. 

Analysts upbeat on biopharma M&A activity in 2024

According to PwC, the M&A activity in the pharmaceutical and life sciences sector could continue humming in 2024. Despite a challenging interest rate environment, PwC projects the sector to see deal values ranging from $225 billion to $275 billion. Deal volume in 2023 was in line with pre-pandemic levels. …

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

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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…

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Biopharma talent wars heat up as openings spike in 2023

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The biopharma industry had a lull in job opening growth from late 2022 and into early 2023. At that time, some early stage companies struggled to secure funding, while larger firms adopted a more cautious posture, according to recent research from the global real-estate firm JLL. Madeline Holmes, a senior research analyst at the company, noted, “Job Openings was something that we looked into as a metric of potential future growth.”

While biopharma layoffs remain a common occurrence, a turnaround could be underway — at least for bigger well-heeled players. The appetite for life sciences talent has ramped up since March of this year. June 2023 marked the sixth highest number of biopharma job openings in any month on record, in line with peaks in 2022. Year-over-year, June postings rose 11%.

Holmes provided some geographical context, noting that Massachusetts saw the most b…

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