RE:RE:RE:RE:RE:RE:Big pharma is set to keep signing bigger deals in 2024March 10, 2024 - Cantor Fitzgerald sees another strong year ahead for oncology M&A. Impending patent cliffs will be a big motivator for deals. According to Cantor, around $182B in revenue is at risk over the next four years due to patent expirations, with oncology products accounting for 42% of that number.
Several of the industry's biggest are set to lose patent protection by 2029, including Bristol Myers (BMY) Yervoy, Pomalyst and Opdivo; Johnson & Johnson’s (JNJ) Imbruvica; Merck’s (MRK) Keytruda; Pfizer’s (PFE) Ibrance; and Roche’s (OTCQX:RHHBY) Perjeta, according to Cantor.
Meanwhile, the global market for oncology drugs is expected to grow from $180B in 2022 to $323B in 2028, a rate that is “unparalleled to other therapeutics areas,” Cantor said. In comparison, the global biopharmaceutical market is expected to swell from $978B in 2022 to $1.39T in 2028.
Cantor estimates the industry should see between five and 17 acquisition deals this year, noting that three have already been announced to date: J&J/Ambrx (AMAM), Merck/Harpoon (HARP), and Novartis (NVS)/Morphosys (MOR).
The investment bank also pointed out that the pool of potential buyers is fairly deep as pretty much every major drugmaker has a presence in oncology, with Novo Nordisk (NVO) being a notable exception.
So what type of assets will Big Pharma be seeking out?
Cantor still sees a preference for de-risked assets but noted that proof-of-concept data for oncology drugs can often be achieved in Phase 1/2 testing. Drug candidates addressing larger markets, such as breast, lung or colorectal cancer, should be particularly attractive to potential buyers.
Cantor says complex biologics have been gaining in popularity.