RE:RE:RE:PwC sees continuation of US$ 5 to 15 Billion Bio M&A Deals
LONDON, Dec 20 (Reuters Breakingviews) - Drugmakers are primed for a shopping spree in 2023.
Companies like Pfizer and GSK are in relatively good health, thanks to bumper sales from vaccines and a post-pandemic recovery in cancer treatments. Chief executives have a potential half-trillion-dollar war chest to use on dealmaking.
The year 2022 was relatively thin for pharma M&A, with deals worth nearly $66 billion being announced by early December – 60% below the 9-year average, according to Refinitiv data; 2023 will be better. It helps that drug companies are relatively healthy, with debt around just 1.6 times forecast EBITDA in 2023, according to Berenberg analysts. Assume they could double that to 3 times EBITDA, and the top 15 listed drugmakers including Pfizer, Moderna Novartis and Roche would have $486 billion of firepower.
Expiring patents may put a fire under CEOs to use that money. Bristol-Myers Squibb, Amgen, Pfizer and GSK will all lose exclusivity on some of their bestselling remedies in the coming years. Buying fast-growing biotech groups is the easiest way to find new revenue. Bristol-Myers Squibb alone reckons it could lose up to $14 billion of sales by 2025 as patents on Revlimid, a treatment for multiple myeloma, expire.