EY report sees M&A target bolt-on and alliances on Pharma's 2023 agenda

Global life sciences mergers and acquisitions (M&A) investment totaled $105 billion in the first 11 months of 2022, with total deal value well down on 2021, according to the 11th edition of the annual EY M&A Firepower report published this week.

However, the close of the year witnessed a sharp uptick, with Johnson & Johnson (NYSE: JNJ) and Amgen (Nasdaq: AMGN) both making multibillion dollar acquisitions. The industry holds record levels of Firepower – defined as a company’s capacity to do M&A based on the strength of its balance sheet – but most companies chose to hold off in 2022.

EY research found that for the first 11 months of the year biopharma M&A value dropped 42% compared with 2021, with Pfizer’s (NYSE: PFE) $10.6 billion acquisition of Biohaven the single largest deal up to December 2022. Alliances remain a significant focus for biopharma and companies’ M&A strategies. However, Amgen’s mid-December announcement that it will pay more than $28 billion for Horizon Therapeutics may be a signal that the industry is ready to return to the big dealmaking table in 2023.