The number of deals in the UK healthcare mergers & acquisition (M&A) sector in January 2025 was down from the same period last year, signalling a more cautious investor landscape for company consolidation.
The total number of deals for the month reached 17, down from the 22 that were completed in January 2024, according to a report by investment firm Heligan Group. As in previous years, pharma and life sciences were the most active sectors, accounting for 35% of the deal volume.
Analysis by the company suggests that the drop in deal number does not necessarily signal a subdued deal tally for Q1, but could highlight changing dynamics in domestic funds and foreign fund deal flow. Outbound deals made up 29% of the January activity – with UK buyers focusing on foreign expansion in the US and Italy. Foreign funds coming into the UK made up 18%, continuing a trend of falling foreign direct investment (FDI) as identified in a UK government report last year.
UK drugmaker GSK was one of the companies spending money away from the UK this month, agreeing to acquire US-based biotech IDRx for $1.15bn to bolster its oncology portfolio. The deal follows GSK’s decision to pump $800m into a new vaccines drug substance facility and R&D pilot plant in the US, with the planned investment set to double the size of the company’s site in Pennsylvania.
“The pharmaceutical industry has seen substantial M&A activity, reflecting a strategic focus on expanding portfolios and enhancing R&D capabilities,” Heligan partner Ramesh Jassal said whilst highlighting the GSK deal.
GSK is not the only British pharma company seeking expansion in the US. In mid-2024, AstraZeneca announced it was considering pulling the plug on manufacturing vaccines in the UK.
While expansion in the US represents a profitable business path, changing market dynamics in the country have ushered in uncertainty. Despite President Donald Trump seeking to boost domestic investment, announced tariffs on other countries have caused uncertainty on the cost-benefit of outsourcing. Heligan stated that the introduction of tariffs “may create barriers for non-US firms accessing the US market.”
An analysis by GlobalData shows that there was a 787% rise in Europe’s FDI to the US from 2023 to 2024. Amid ongoing trade tensions, investors could delay new deals until the effect of policies becomes clearer.
GlobalData is the parent company of Pharmaceutical Technology.
Jassal said: “With the administration’s focus on shaking up healthcare policies, non-US buyers – particularly those from Europe – may need to adapt their strategies. As [the US government] begins to implement these policies, it may be the case that non-US companies may seize opportunities for expansion or changing regulatory and market conditions could create challenges for access.”
