18 large international pharmaceutical companies with 1.72 trillion US dollars, will mergers and acquisitions explode in 2022?

In 2021, the top 10 global M&A transactions in the biopharmaceutical sector will total nearly $53 billion
.

This figure is far lower than the $97 billion in 2020, and only a quarter of the $207 billion in 2019

Obviously, the total value of the world's top 10 M&A transactions in 2021 is significantly lower than in previous years
.

The reason for this, according to industry analysts, is that there were a large number of large-scale mergers and acquisitions in 2019.

01.
2021 seems to be back to 10 years ago

01.
2021 seems to be back to 10 years ago

Overall, the top 10 global M&A transactions in the biopharmaceutical sector in 2021 will basically exceed US$2 billion, with two of them tied for 10th place, with each transaction valued at US$1.
9 billion
.

Top 10 global M&A transactions in the biopharmaceutical sector in 2021

And as 2021 draws to a close, the biggest deal of the year comes: Australian biotech company CSL bought Vifor Pharma, a Swiss biotech company developing treatments for kidney and iron deficiency diseases, for $11.
7 billion
.

This is also the largest transaction in CSL's history

In terms of acquisition frequency, the most active acquirers are Pfizer and Sanofi, which have carried out 2 major transactions respectively, including Pfizer’s $6.
7 billion acquisition of Arena Pharma, a biopharmaceutical company focused on the development of immunological drugs; and its $2.
26 billion acquisition of anticancer therapy R&D company Trillium Therapeutics; Sanofi's $3.
2 billion acquisition of mRNA company Translate Bio; and its $1.
9 billion acquisition of biopharmaceutical company Kadmon Holdings
.

In terms of acquisition frequency, the most active acquirers were Pfizer and Sanofi,

In terms of disease areas of interest for acquisitions, oncology continues to be the driver of M&A
.

In addition, the fields of rare diseases, immunity, and inflammation have also received much attention

In terms of emerging technologies, RNA therapy has also become an area of ​​deployment for many companies
.

An industry insider said: “ In some ways, the biopharma M&A landscape in 2021 looks like a return to the usual deal pattern of a decade ago, characterized by a series of small acquisitions and add-ons aimed at expanding the R&D pipeline.
trade
.

"

In some ways, the biopharma M&A landscape in 2021 looks like a return to the usual deal pattern of a decade ago, characterized by a flurry of small acquisitions and add-ons aimed at expanding the pipeline

2021 is a "more normal year for M&A investment," and 2022 is expected to see an increase in the total value of M&A in the biopharmaceutical industry, as the industry still has substantial capital allocations available

02.

Glenn Hunzinger, PwC's U.
S.
pharma and life sciences consulting solutions leader, said 2022 could be a "pretty active year" for biopharma M&A, not just because Big Pharma amassed a lot of cash, but also because pharma companies The need to scale and diversify across different therapeutic areas remains evident
.

2022 could be a "pretty active year" for biopharma M&A, not just because Big Pharma has amassed a lot of cash, but also because the need for pharma to scale and diversify across different therapeutic areas is still evident
.

PricewaterhouseCoopers estimates that by 2022, the entire life sciences industry could complete M&A transactions worth $350 billion to $400 billion
.

In addition to a string of $5 billion to $15 billion biotech acquisitions, PwC believes there will be mega acquisitions of $50 billion, $100 billion or more

PricewaterhouseCoopers believes that there will be 50 billion US dollars, 100 billion US dollars or even more large acquisition opportunities

Predicting a "backlash in M&A is imminent",

As for the size of potential deals, RBC Capital Markets analysts predict that single-asset companies in mid-to-late stages of clinical development valued at around $1 billion to $5 billion will be "the sweet spot" for most mergers and acquisitions in 2022, but added "A bigger blockbuster deal may be needed in 2022.

"

Single-asset companies in late-stage clinical development valued at around $1 billion to $5 billion would be "the best bet" for most mergers and acquisitions in 2022, but added that "2022 may require larger blockbuster deals
.
"

Analysts at Mizuho Securities in Japan also believe that mergers and acquisitions will be intensified when big pharmaceutical companies face growth pressures, but also said that if the overall transaction environment does not change significantly, the biopharmaceutical mergers and acquisitions in 2022 may be the same as in 2021
.

Biopharma M&A in 2022 could be the same as in 2021 if the overall deal environment doesn't shift significantly
.

Over the past few years, Big Pharma has been selling off non-core assets in consumer health, animal health, generics or small brands, and through spin-offs, has focused their businesses on areas they want to grow in the future
.
And the sale of non-core assets has also freed up a lot of cash for Big Pharma to do more deals
.

According to a recent report from analysts at SVB Leerink , 18 large U.
S.
and European biopharma companies will theoretically have about $1.
72 trillion in M&A capacity by the end of 2022 , given $500 billion in projected cash and the ability to tap into additional financing .

By the end of 2022, 18 large U.
S.
and European biopharma companies will theoretically have about $1.
72 trillion in M&A capacity
.

Among the 18 companies, J&J has the largest M&A capacity, exceeding $200 billion
.
Pfizer and Novartis followed with $175 billion and $154 billion, respectively
.
AbbVie, GlaxoSmithKline, Bristol-Myers Squibb and Merck all have more than $100 billion in potential M&A reserves
.

Among the 18 companies, J&J has the largest M&A capacity, exceeding $200 billion
.
Pfizer and Novartis followed with $175 billion and $154 billion, respectively
.
AbbVie, GlaxoSmithKline, Bristol-Myers Squibb and Merck all have more than $100 billion in potential M&A reserves
.

Another reason for fewer mergers and acquisitions in 2021 has to do with the high valuations of biotech companies, according to
Torreya analysts .
The Nasdaq Biotech Index and SPDR S&P Biotech ETF (traded open-end index fund) have been on the rise, reaching new all-time highs in early 2021
.

Another reason for fewer mergers and acquisitions in 2021 has to do with the high valuations of biotech companies
.

But recently, biotech company valuations appear to be on a downward trend, which could also increase the number of deals
.
But in fact, the standards for mergers and acquisitions of large pharmaceutical companies have not changed, and they will not acquire some companies that are not needed because of cheapness
.

References:

References:

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