2019 YTD biopharma M&A transaction value reaches 10-year high

M&A activity in the biopharma sector was relatively low from early 2010 through 2014 (purchased market cap each year below 0.6% of sector market cap), according to a new evaluation by SVB Leerink Research analyst Geoffrey Porges.

In 2015, M&A increased with the purchased market cap percentage crossing 1% in 2015 and reaching 1.4% in 2016. M&A briefly fell in 2017 due to tax reform expectations, but quickly bounced back in 2018 and reached a 10- year high by total transaction value in 2019 (already).

The number of acquisitions for full year 2019 is likely to approach 20 deals (close to 2018) and the average size of transactions in 2019 reached $18 billion, three times higher than the 10-year average. Both transaction count and size have increased substantially since 2017, indicating companies are consolidating and expanding through M&A at a faster and more aggressive pace.