Industry Insights: Promising Forecasts for Consolidation and M&As - United States Life Sciences 2023

Industry Insights: Promising Forecasts for Consolidation and M&As

Big Pharma's shopping list for the most promising technologies, growing price gaps between buyers and sellers, and correcting pumped valuations

“I believe 2023 will be a big M&A year. First of all, pharma is always ready and able to execute M&A given its tremendous cash flows and cash balances. The only question is whether there are mature, de-risked assets of interest for them to acquire. 2023 is different because there is a big crop of phase 3 and approved assets in the biotech industry. Given this set of mature assets, I expect to see a lot of M&A activity over the next 18-24 months.”

Christiana Bardon, Co-Managing Partner, MPM | BioImpact Capital

“Big pharma companies have an enormous amount of cash and are continuously looking for innovative products to help them fill their pipelines. They are starting to increasingly look at smaller biotech companies to fulfill that requirement, and good quality biotech companies with great portfolios focused in the target areas that big pharma is looking at are going to be rich acquisition targets. We should see big pharma continuing to do significant biotech acquisitions, either through licenses or outright purchases of companies.”

John Pennett, Partner-in-charge of the National Technology and Life Sciences Group, EisnerAmper

“Nowadays we are witnessing that big pharma is favoring products that are in the market or in the late stage. These products have a more meaningful impact on their near-term revenues and earnings. They are also very selective because of the competitive landscape in a particular disease or treatment category. The decline in valuations of companies is also causing a price gap between buyer and seller. As sellers begin to accept the reality of lower valuations and possibly the need to do a transaction, M&A activity will likely start to pick up.”

James Gale, Founding Partner and Managing Director, Signet Healthcare Partners

“Overall, biopharma has a cumulative firepower valued at US$1.4 trillion to deploy towards inorganic growth and capital expenditures. We are bullish about the industry’s overall innovation capacity and expect that the next two to three years will be conducive to improving margins by applying intelligent automation and digitalization while focusing on innovating new medicines and bolt-on acquisitions.”

Arda Ural, Americas Industry Market Leader, Health Sciences & Wellness, EY USA

“The pandemic cycle brought several companies into the public markets too early, and it exaggerated their valuations. This has now left them stranded and struggling to find capital. It will take us a while to get through this, but as the fundamentals are so positive – the science of human disease, our large number of treatment approaches, and the improved capital efficiency of our sector – I am confident that in the long term, our sector will thrive.”

Douglas Crawford, Managing Director, Mission BioCapital

Background image courtesy of Evonik

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