RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:PwC sees continuation of US$ 5 to 15 Billion Bio M&A Deals July 31, 2024 - While patent cliffs are looming for many of biopharma’s top-selling products, the industry has enormous capacity to respond as “conditions for M&A are favorable,” according to a research note from Morgan Stanley.
In the July 11 report, the analysts calculate that products losing exclusivity through 2030 are generating a combined $183.5 billion in annual sales, with Amgen, Bristol Myers Squibb and Merck facing the most exposure of their revenue.
Meanwhile—citing company financial reports and data from Visible Alpha and FactSet—Morgan Stanley estimates that Big Pharma has $383.1 billion of firepower available for dealmaking. The companies sitting on the most dry powder are Johnson & Johnson, Merck and Novo Nordisk, the analysts said.
"We continue to see the conditions as generally favorable for bolt-on M&A as large-cap pharma companies have balance sheet capacity and a need to acquire outer-year revenue," the Morgan Stanley team, led by Terence Flynn, Ph.D., wrote.
It’s no surprise that Merck is on the list, with 56% of its revenue exposed to patent expirations. Most of that comes from mega-blockbuster cancer drug Keytruda, which genereated $25 billion in sales last year, accounting for 42% of the company’s total haul. Keytruda is set to lose its exclusivity in 2029.
"Merck continues to have the combination of need to offset the Keytruda LOE and meaningful balance sheet capacity," the Morgan Stanley analysts wrote. "AbbVie, BMS and Pfizer have all recently transacted, so we see these companies as more likely to be acquirers over the medium term."
https://www.fiercepharma.com/pharma/firepower-aplenty-and-patent-cliffs-ahead-time-right-ma-activity-report