Amgen saves biopharma’s buyout year

December’s $28bn takeout of Horizon bumps 2022’s M&A numbers to respectable levels.

Beaten-down biopharma was given a well-needed boost in the closing weeks of 2022, when Amgen won the bidding for Horizon Therapeutics. The $28bn deal also rescued the sector’s M&A stats, taking the total capital committed to just over $90bn.

Remarkably, transactions struck by just two companies – Pfizer and Amgen – account for more than half of that figure. The former is spending its Covid cash while the latter is trying to replace fading blockbusters, a motivation expected to drive deal making at other large developers in the coming months.

Three small deals that emerged yesterday at the JP Morgan healthcare conference probably give a taste of what is to come – smallish bolt-on deals that come with risk-sharing structures. With biotech valuations still depressed, acquirers have the power to dictate terms.

“The M&A environment has turned on its head from a seller’s to a buyer’s market,” Subin Baral, global life sciences deals leader at EY, told Evaluate Vantage. “The onus is on the seller to make sure they are a compelling asset.”

Annual biopharma M&A activity 
Year Total deal value ($bn) Deal count  Median deal value, excl-$30bn+ deals ($bn)
2018 148.4 183 195
2019 239.2 176 438
2020 131.0 176 279
2021 90.8 165 363
2022 90.5 171 247
Source: Evaluate Pharma. 

This power play was on show in 2022, with companies as diverse as Epizyme, Radius and F-Star finally accepting the new reality and selling out at depressed valuations.

Biopharma’s top-line M&A stats reflect this trend. The table above shows that the number of transactions did not really dip last year, though the total sum committed hit a five-year low. The median deal value dropped to a four-year low.

This picture would look a lot sorrier had Amgen not decided to pay up for Horizon. A big question is whether the sector is in for another long wait for the next big deal; the last transaction of comparable size was Astrazeneca's late-2020 takeout of Alexion, for $39bn.

Valuations at the more established end of the sector have been mostly unaffected by the market rout – many large developers have benefitted from their so-called defensive qualities. This means that filling revenue gaps will be expensive, though the looming patent cliff at the end of this decade will eventually force hands. 

For this analysis, which is based on data collected by Evaluate PharmaEvaluate Vantage includes only M&A deals struck by pure-play drug developers, with sectors like medtech or diagnostics excluded. Other deal types refers to majority and minority stake purchases and business unit buys; licensing deals are not counted.
2023's biggest biopharma buyouts
Acquirer Target Deal value
Amgen Horizon Therapeutics $27.8bn
Pfizer Biohaven  $11.6bn
Pfizer Global Blood Therapeutics $5.4bn
Bristol Myers Squibb Turning Point  $4.1bn
Amgen Chemocentryx $3.7bn
Note: Horizon deal not closed. Source: Evaluate Pharma

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