M&A, which stands for ‘mergers and acquisitions’, is a set of merger and acquisition transactions between companies and represents a possible corporate growth strategy through the acquisition of new technologies, market expansion and cost reduction.
Accordly to Deloitte’s report analysing M&A trends in 2023, the ‘Life Sciences’ sector, led by the pharmaceutical segment, is trending above expectations, both in terms of value and deal volume, with deals worth $163bn significantly exceeding the $135bn in 2022 (+20%).

Oncology represents the therapeutic area in which most of the value of deals in 2023 was recorded, although their total volume decreased and is on a par with deals between companies in the ‘central nervous system’ and ‘endocrine’ and ‘metabolic’ areas. Prospectively, oncology is expected to continue to be a strong driver for M&A activity in 2024, supported in particular by market interest in antibody-conjugated drugs (ADCs), bispecific antibodies and CAR-Ts. In addition, the first approval in 2023 of therapies based on the Crispr-Cas9 genome editing technique (Casgevy; exagamglogene autotemcel for patients with sickle cell anaemia or beta-thalassaemia) should also provide a strong impetus for cell and gene therapies in the years to come, particularly for M&A activities in the field of rare diseases.

2024, good but not great

The outlook for 2024 is mixed. As far as the pharmaceutical sector is concerned, during 2023 many giants announced cost cuts and divestments with the sale of assets to smaller companies and the retention of minority stakes, as well as the sale of pipeline assets to other large pharmaceutical companies. This trend is expected to continue in 2024, when several drugs in various therapeutics are about to lose exclusivity.

However, this very situation should be favourable for a reinvestment of the capital freed up by corporate reorganisations in acquisition transactions to fill portfolio gaps caused by products with expiring protection.

It is difficult, however, to still witness the mega-financial transactions that took place a few years ago. The current trend in pharma seems to favour more specific – and less financially demanding – open innovation actions.

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