RE:RE:Big pharma is set to keep signing bigger deals in 2024 June 12, 2024 - Dealmakers predict that a rebound in public transactions will come soon.
“Big Pharma still has the same challenges and the only way for them to solve this is through BD [business development] and M&A,” Jefferies’s Roop said. “I feel optimistic that we’ll continue to see deal-flow.”
J&J is one drugmaker that’s likely poised to participate in any rebound, according to Nauman Shah, global head of business development for its pharmaceutical segment.
“We certainly still have the financial capability and the power to be able to do deals regardless of what size they are,” he said in an interview at last week’s BIO International Convention in San Diego. “We’re going to focus more on deals that are in that five to let’s even call it $20 billion range if they make sense. We’re not afraid to go to those levels.”
Big Pharma needs to buy in order to find innovative treatments and replenish top lines. Bloomberg Intelligence analysts Michael Shah and John Murphy recently estimated that the industry’s biggest names in the US have $180 billion in annual sales that are at risk from patent expirations between now and 2030.
With fewer obvious de-risked public targets to chase, one trend that has emerged in health-care dealmaking this year has been Big Pharma increasing its risk profile and moving upstream in the biopharma innovation space through the pursuit of smaller private companies. Pharma takeovers of private biotechs are up 198% so far this year, according to data compiled by Bloomberg, however Big Pharma is setting up to increase its M&A deal-flow in H2'24.