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Winter 2024 | M&A Report In The Healthcare & Life Sciences Industry Sector

By Daniel Sirvent

March 06, 2024

The report below gives a good overview of the Winter 2024 M&A activity in the Healthcare & Life Sciences Industry Sector. The 12th edition of the annual EY M&A Firepower report, which monitors global M&A investment in the life sciences sector, highlights the industry's resurgence in M&A activity driven by various factors. These include pressures on topline growth, impending patent expirations of key products within the next five years (referred to as the "patent cliff"), and the urgency to strike strategic deals to ensure sustained revenue growth and value creation. The report identifies three primary reasons for the continued and accelerated uptrend in M&A spending anticipated in 2024 and beyond. Firstly, the biopharma sector maintains near-record levels of M&A Firepower. Secondly, significant revenue challenges in the next five years necessitate securing inorganic growth. Lastly, prevailing economic conditions create a buyer's market, favoring acquiring entities. Furthermore, the oncology market presents substantial growth prospects, evidenced by the considerable M&A investment in oncology assets, reaching US$65.2 billion in 2023. Intense competition for these assets has resulted in companies paying higher multiples compared to targets in other therapeutic areas, with oncology acquisitions averaging 11.9 times total target company revenues over the past decade. Apart from oncology, changes in the regulatory landscape have rendered other assets attractive acquisition targets. Legislation like the IRA has minimal impact on the pricing of orphan drugs, prompting companies specializing in rare diseases to emerge as significant M&A targets, commanding high multiples, and driving major deals in the past year.

Posted by Daniel Sirvent.

Read the Entire Winter 2024 Healthcare & Life Sciences Report Here