2018: A year of contrasts as M&A slumps and IPOs remain strong

26 February 2019

Looking back over 2018, it is clear that the year was one of contrasts for biopharma companies, according to a new report from the Evaluate group and its editorial arm Vantage.

Macroeconomic trends in the fourth-quarter wiped out biopharma’s stock market gains from earlier in 2018, with the S&P Pharmaceuticals Index the only major biopharma index to finish the year in the black. M&A and product licensing volumes were also down, despite notable deals such as Takeda’s (TYO: 4502) $64 billion acquisition of Shire and Bristol-Myers Squibb Squibb’s (NYSE: BMY) $1 billion payment to Nektar. Deal-making slowed in the medtech sector too, with fewer acquisitions closed and a corresponding decrease in venture investment rounds.

Falling share prices in the fourth quarter turned a 15% nine-month climb for the Nasdaq Biotechnology Index into a 9% year-end decline, while the S&P Pharmaceuticals Index only managed a 5% gain.
M&A activity hit its lowest level since 2009, with 173 total deals; licensing activity also dropped from 2017 levels by both deal count (112) and value measures ($4.94 billion).
The total value of medtech M&A deals came to $27.4 billion, a precipitous decline from 2017’s figure of nearly $100 billion.

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