Utdrag
Global life sciences mergers and acquisitions (M&A) activity totaled US$219b in 2021, up from US$159b in 2020, mainly driven by medtech (US$111b), according to the 10th edition of Firepower, which EY teams define as a company’s capacity to do M&A based on the strength of its balance sheet. Only 9% of biopharma’s Firepower was deployed on M&A in 2021, compared with 25% in 2019 and 12% in 2020.
The EY report finds that despite signs of a market softening, sellers still have the advantage. In 2021, valuations for targets remained high and capital was still readily available. Last year (as of 30 November 2021), biopharmas raised more than US$80b in follow-on financing, venture funding and initial public offerings (IPOs), second only to the US$90b raised in 2020. This capital for early- and growth-stage companies was further augmented by the expanding role of special purpose acquisition companies (SPACs), a trend that accelerated in 2021.
The innovations driving biopharma’s growth over the next five years are expected to come from outside the group of established market leaders and the established classes of biopharmaceutical products that have historically driven growth.
EY research found that since the beginning of 2020, major biopharmas have deployed roughly 1.5 times more Firepower on alliances relative to M&A. In 2020, biopharmas signed 38 alliances with upfront deal values greater than US$100m and four greater than US$1b. In contrast, in 2021, companies prioritized smaller deals with lower upfront values.
To allocate capital sustainably in 2022, biopharmas should consider the following:
- Divest to invest. Based on EY research, total shareholder returns are higher for companies that divest. Despite the current fragmentation in the industry, it’s also true that biopharmas have not done enough to proactively focus their business models. Indeed, the total disclosed value of divestitures in 2021 was only US$11b
- Deploy more of their Firepower on strategic partnerships
- Continue to favor bolt-on deals rather than risking megadeal expenditure for uncertain rewards.
To stay competitive, bigger biopharma companies need to be aggressive in their pursuit of external innovation. Simply put, they need to transact if they want to transform their businesses.
Looking ahead to 2022
As biopharmas look ahead to the coming year, future patent expirations and the speed of scientific progress will keep both M&A and alliances firmly on the agenda. One key area of investment: new modalities, such as cell and gene therapies, antibody drug conjugates and RNA- and DNA-based medicines. Although leading biopharmas have made a push to bring such capabilities in house, research suggests that they are the minority of current pipelines. This is especially true in oncology.
Late-stage or marketed assets with strong clinical data will continue to command high prices, particularly in competitive therapy areas such as oncology. Yet some of the largest companies have significant cash resources to deploy for M&A and there could be increasing pressure to use it to establish beachheads. Such acquisitions would reverse the declining trend for biopharma deal value witnessed in the past two years.
In such an environment, M&A may find itself playing a supporting role, as more biopharmas pursue smarter, earlier, strategic partnering to achieve their growth goals.
Så kan spørsmålet bli, vil 2022 være PCI Biotech sitt år? Bakteppet som EY rapport har noen meget interessante trekk som synes være fordelaktige for norsk biotek og PCI Biotech.
@Handyman hva mener du? Kom gjerne med input og meninger annet enn det life Science avd i EY har vurdert. Og rapporten fra EY er 4 dager gammel 
Så lite recycle som der er mulig å komme.
