Although the pharma industry's dealmaking activity in the last 12 months has yet to surpass the peak levels seen in previous years like 2019 when total deal values reached $264bn, mergers and acquisitions (M&As) saw somewhat of a resurgence in 2023.
While there was a rebound in M&A deals from 2022 to 2023 in terms of total deal values was observed, M&A activity in Q1 2024 has dropped in comparison to Q1 2023 in terms of deal values.
Oncology as a therapeutic area has consistently attracted the most deals over the years, with 2023’s highest-value deal also being in the cancer arena. At the same time, there was growing interest for M&As neurology and immunology last year.
Following a dip in deal activity during the Covid-19 pandemic, the value of all M&A deals in the pharmaceutical space last year reached $184bn, while the top ten highest value deals totaled approximately $121bn.
In this feature, we analyse publicly available data focusing only on the biggest M&As that were completed in 2023.
1. Pfizer’s acquisition of Seagen - $43bn
Pfizer and Seagen's $43bn deal spurred significant interest in the field of antibody drug conjugates (ADCs) last year. The deal was announced in March 2023 and was completed right before the end of the year.
Amidst the waning demand for Pfizer’s Covid-19 vaccine, and antiviral Paxlovid (nirmatrelvir + ritonavir), the company enforced cost-cutting initiatives and scrapped some of its assets at the beginning of 2023. However, by acquiring Seagen last year, Pfizer expanded its ADC portfolio to enhance its next-generation drug discovery capabilities in oncology and more specifically solid tumours. According to a company, with the acquisition of Seagen, Pfizer's oncology pipeline has doubled, “encompassing 60 programs across various modalities, such as ADCs, small molecules, bispecifics, and other immunotherapies”.
Through the acquisition, Pfizer also added Seagen’s four marketed oncology drugs, Adcetris (brentuximab vedotin), Tivdak (tisotumab vedotin) and Padcev (enfortumab vedotin)—all ADCs, and Tukysa (tucatinib), a small molecule inhibitor.
Initially, Merck & Co was expected to acquire Seagen, given their existing partnerships on several products. However, Pfizer acquired Seagen for $229 per share, representing a 33% premium over Seagen's previous closing price.
2. Amgen’s acquisition of Horizon Therapeutics - $28.3bn
The second highest value deal of 2023 was Amgen’s acquisition of Horizon Therapeutics for $28.3bn. The deal was announced in late 2022 and was completed in October 2023. Under the deal terms, Amgen purchased Horizon for $116.50 per share in cash on a fully diluted basis.
The deal granted Amgen entry to Horizon’s lineup of medications targeting rare autoimmune and inflammatory conditions, which includes its highly successful treatment for thyroid eye disease, Tepezza (teprotumumab).
The US Federal Trade Commission (FTC) initially sought to block this acquisition, claiming that the deal would allow Amgen to gain a monopoly for Tepezza, and the chronic refractory gout treatment, Krystexxa (pegloticase). In May 2023, the FTC filed a lawsuit in federal court to prevent the acquisition from going forward. However, the lawsuit was eventually settled in September 2023, after entering a binding settlement preventing the combined companies from bundling Horizon’s Tepezza or Krystexxa with other products to apply pressure on insurance companies.
3. Merck & Co acquires Prometheus Biosciences - $10.8bn
Merck & Co’s revenues reached $60.1bn in 2023, with the company being ranked as the top pharmaceutical company according to R&D expenditure in 2023.
More than half of Merck’s R&D funds were dedicated to partnerships and acquisitions, with the $10.8bn Prometheus Biosciences acquisition being its biggest known deal, which was announced on 16 April and was completed exactly three months later. The deal closed at a time as the company was preparing to offset the impending revenue loss due to the expiration of exclusivity rights for its blockbuster immunotherapy cancer drug Keytruda (pembrolizumab).
PRA023—a tumour necrosis factor (TNF)-like ligand 1A (TL1A)-targeting antibody—was Prometheus’s lead candidate that was rebranded to MK-7240 and added to Merck & Co’s portfolio through the acquisition. The asset is being developed to treat autoimmune conditions including Crohn’s disease and ulcerative colitis.
Merck & Co purchased all outstanding shares of Prometheus for $200 per share in cash for a total equity value of approximately $10.8bn, and Prometheus is now functioning as a fully-owned subsidiary.
4. Biogen’s acquisition of Reata Pharma - $7.3bn
Biogen agreed to pay $172.50 per share in cash to buy Reata, bringing up the acquisition price to $7.3bn. The deal was announced in July and completed in September last year.
Reata is developing therapeutics for treating serious neurologic diseases, one of which is Skyclarys (omaveloxolone)- the first and only FDA-approved Friedreich’s ataxia treatment. Biogen also acquired cemdomespib (RTA-901), which Reata is developing to treat diabetic neuropathic pain. The deal is important as Biogen enhances its neurology portfolio at a time when its share in the Alzheimer’s space shrinks and competition rises.
5. Roche acquires Telavant from Roivant Sciences and Pfizer - $7.25bn
Right behind Biogen’s deal comes Roche’s acquisition of Televant with a $7.25bn price tag. As part of the deal, Roche acquired Televant, a Roivant subsidiary created to develop the ulcerative colitis drug RVT-3101. The deal was announced in October after positive Phase IIb data suggested the asset had clinically meaningful efficacy.
Televant was a new subsidiary set up by Roivant Sciences and Pfizer to develop the inflammatory disease asset. Pfizer maintained a 25% ownership interest in Televant, which will also transfer to Roche.
RVT-3101 is an antibody directed to TL1A, a potential target for regulating inflammation, and is a direct competitor to Merck & Co’s newly acquired MK-7240 through the aforementioned acquisition of Prometheus Biosciences. Roche is aiming to have a first-in-class drug and is rapidly advancing RVT-3101 into Phase III trials following the completion of the deal in December 2023.
6. Takeda Pharma’s acquisition of Nimbus Lakshmi - $6bn
Another significant deal that was finalised last year was Takeda’s full acquisition of Nimbus Lakshmi, a tyrosine kinase 2 (TYK2) programme-focused subsidiary, from Nimbus Therapeutics for $6bn. The acquisition was announced in December 2022 and was later completed in February 2023.
Nimbus Therapeutics received nearly $4bn in an upfront payment from Takeda. Nimbus is also eligible to receive payments based on milestones met for the TAK-279 (zasocitinib) programme.
This deal also signifies the interest and competitiveness in the immunology and inflammation space, which is evident both through Roche’s acquisition of Telavant and Merck & Co’s purchasing of Prometheus.
7. Astellas Pharma’s acquisition of Iveric Bio - $5.9bn
Another high value deal last year was Astellas Pharma's acquisition of biotechnology company, Iveric Bio for $5.9bn. Under the deal terms, IVERIC bio will become an indirectly wholly-owned subsidiary of Astellas through the purchasing of all outstanding share for $40 in cash per share.
Iveric Bio focuses on discovering and developing new therapies for retinal diseases with considerable unmet medical needs, which aligns with Astellas’s emphasis on blindness and regeneration therapies.
Apart from capitalising on Astellas’ ophthalmology-focused expertise, the deal will add promising assets, such as Zimura (avacincaptad pegol) for geographic atrophy (GA) secondary to age-related macular degeneration (AMD), to Astella’s portfolio.
8. Danaher’s acquisition of Abcam - $5.7bn
Danaher, a US-based group, finalised its acquisition of UK-based Abcam last year, for $5.7bn (£4.5 bn) in cash. The deal was first announced in August and was completed at the end of the year.
Abcam specialises in marketing antibodies, reagents, biomarkers, and assays for drug discovery, research, and diagnostics. Danaher will fund the transaction by utilising available cash reserves, as well as proceeds from the issuance of commercial paper.
9. Novartis acquires Chinook Therapeutics - $3.5bn
In 2023, Novartis ranked fourth in the list of top pharma companies spending on their R&D plans, given its $11.37bn expenditure last year.
Part of Novartis’s investment strategy was a $3.2bn deal to acquire Chinook Therapeutics in August 2023, to boost its kidney disease pipeline. The deal aimed to enhance Novartis’s portfolio of treatments for kidney disease. As part of the deal, Novartis obtained two Phase III assets, BION-1301 (zigakibart) and ABT-627 (atrasentan hydrochloride), for which Novartis is now seeking accelerated approval. The two high-profile assets are in Phase III development for the treatment of IgA nephropathy (IgAN).
Under the deal terms, shareholders were entitled to receive $40 per share, amounting to $3.2bn. Additionally, shareholders may qualify to receive an extra $4 per share contingent upon regulatory milestones, totaling $300m.
10. Sanofi’s acquisition of Provention Bio - $2.9bn
The last high value pharma deal on this list was Sanofi’s acquisition of Provention Bio for approximately $2.9bn. The deal was announced in March and was eventually completed in April 2023. Sanofi's involvement in diabetes primarily revolves around its insulin portfolio, placing the company at a disadvantage compared to its competitors in the diabetes space like Eli Lilly and Novo Nordisk. These rivals have been advancing with innovative GLP-1 medications such as Mounjaro and Ozempic, respectively. Through the acquisition, Sanofi will incorporate Tzield (teplizumab) a first-in-class disease-modifying treatment for the postponement of Stage 3 type 1 diabetes (T1D), into its core asset portfolio in General Medicines.
Under the deal terms Sanofi paid $25 per share in cash, reinforcing the company's strategic transition towards diversified products.
