TLDR:
- Pharma sector saw a surge in activity in 2023 with big acquisitions.
- 2024 is expected to be a strong year for pharma M&A.
After a relatively slow start, the pharma sector witnessed increased activity in the second half of 2023, highlighted by significant acquisitions by major players like AbbVie, Bristol Myers Squibb, and Roche. Despite flat deal volumes compared to 2022, the global deal value saw a 28% increase reaching $228 billion.
The momentum in the pharma sector is expected to continue into 2024 with big pharma companies sitting on record levels of cash reserves. Strategic goals include clinical differentiation in areas like neuroscience, oncology, rare diseases, and more, with a focus on later-stage assets due to recent clinical failure rates.
Pharma companies are also increasingly interested in technology and AI, looking for opportunities to merge these fields for innovation. PE activity, though subdued in 2023, is expected to revive in 2024, driven by high cash reserves and a promising leveraged finance market outlook.
VC activity in the pharma sector remained steady in 2023, with biotech funding attracting significant investments globally. Regulators are closely scrutinizing transactions, particularly in terms of anti-trust and FDI regulations, underscoring the importance of considering these aspects in M&A decisions.
Looking ahead, the strong conditions in the sector, with ample dry powder and innovative assets, indicate a promising year for pharma M&A in 2024.
