RE:RE:RE:Big pharma is set to keep signing bigger deals in 2024April 18, 2024 - The number of biopharma M&A deals more than doubled in the first quarter of 2024 compared to the same period a year ago, exemplifying a top exit route for pre-commercial companies vying for validation and attention.
A new report from Leerink Partners tallied 13 biopharma M&A deals in the first quarter of 2024 compared to six in the first quarter of 2023. There were 47 deals in the last twelve months through March 2024, compared to 42 through March 2023. According to Cantor Fitzerald, big Pharma had close to $1.37 trillion in cash in 2023, the second-highest in a decade after the 2021 Covid-vaccines-induced boom. Now, however, estimates are that these companies’ cash piles have grown even higher, further bolstering the industry’s firepower.
Their pursuit of diversification could trigger a cascade of oncology-focused M&As,” says Aaron Rafferty, co-founder and CEO of Standard.
The increasing competition for innovation within the sector may also lead to the payment of high premiums for smaller target companies, which could result in hefty gains for investors positioned in such stocks.
“Historically, we know big Pharma can be quite price insensitive when it comes to assets that they want. We could be looking at just as many, if not more, deals, but maybe at a higher premium or valuation than the past two years,” explains Fitzgerald's Watsek.
As an example posted on April 11, 2024 - Vertex Pharmaceuticals is acquiring Phase 1b Alpine Immune Sciences for $4.9 billion, gaining access to povetacicept, a potential treatment for IgA nephropathy and up to seven potential indications. [ONCY has 2 registration ready clinical indications (mPDAC and mBC) and multiple additional indications (ie. anal cancer, TNBC, CRC, GI cancers, Gliomas, etc.)]
Povetacicept has shown results in reducing proteinuria in IgAN patients in their single phase 1b clinical trial. The deal brings no revenues until at least 2027 and will produce modest upside for Vertex this decade.