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Global healthcare M&A delivers strong performance | Chicago Popular

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Trading in the pharmaceutical, medical and biotechnology (PMB) sub-sectors was driven by old and new market trends in 2022

Following a Revolutionary year for trading in 2021, mergers and acquisitions in the global healthcare sector remained robust in 2022, despite a general slowdown in mergers and acquisitions across the board.

A total of 2,852 PMB offers took place in the industry in 2022, surpassing yearly totals on the Mergermarket record since 2006 (aside from the anomaly in 2021). A total of $375.1 billion in the offers, meanwhile, it still stands above the pre-2021 average.

M&A activity by volume 2006 – 2022
Target location: Global Location of the bidder: Global Sectors: Pharmaceutical, medical and biotechnological

Explore the data

The US pharmaceutical sector enters biotech

While 2021 saw a record number of transactions valued at $5 billion or more—20 in total– There were nine such megadeals in 2022, centered around biotech and medical deals, as cash-heavy big pharma continued to take advantage of post-pandemic valuation declines.

The largest of these deals included Amgen’s $28.3 billion acquisition of Horizon Pharma, General Electric’s spin-off of GE HealthCare Technologies for $22 billion, paying $19.3 billion dollars from Johnson & Johnson for heart pump maker ABIOMED; and Pfizer’s $11.6 billion acquisition of biotech company Biological Refuge.

For Pfizer, after the success of its COVID-19 vaccine, the US pharmaceutical group wanted to use the acquisitions to strengthen its drug pipeline and support its growth, and the biotech sector, with its normalizing valuations, has revealed the perfect hunting ground.

Pfizer also announced in August that it was acquiring US biotech company Global Blood Therapeutics (GBT) in an effort to replenish its drug pipeline. The purchase of GBT, a developer of sickle cell anemia treatments, was valued at $5.3 billion.

In another bid by a major US pharmaceutical company to bolster its pipeline with an innovative biotech firm, Bristol Myers Squibb (BMS) announced a $4.6 billion purchase of US cancer drugmaker Turning in June point. The acquisition is the largest by BMS in nearly two years as it aims to take advantage of the rapidly growing global oncology market, valued at $286 billion in 2021, according to market research firm Precedence Research.

UK seeks PMB growth overseas

UK dealmakers have also been increasingly eager to acquire overseas PMB companies, realizing 118 outgoing incoming operations 2022, more than any previous yearly record. This included GlaxoSmithKline’s (GSK) $3.3 billion purchase of American vaccine startup Affinivax. In addition to strengthening the company’s vaccine pipeline, the deal will see GSK expand its presence in the Boston area, a center for global biotech innovation.

The deal follows GSK’s announcement to buy blood cancer specialist Sierra Oncology for $2 billion in April following pressure from activists to bolster its drug pipeline.

Other cross-border deals in the UK include the acquisition of medical device specialists Biofarma in Italy from White Bridge Investments by British private equity (PE) firm Ardian, together with Germano Scarpa and Gabriella Tavasani. The deal, completed in March, was valued at $1.3 billion and saw Ardian acquire 70% of the business while Germano Scarpa and Gabriella Tavasani reinvested to retain a 30% stake.

In November, Ardian also reinvested in Italian pharmaceutical company Neopharmed Gentili through its latest fund, together with NB Renaissance, jointly holding an 80.86% stake in equal shares.

UK PE companies are also eager to enter the fast growing biotech sector. In January, London-based Permira worked with the Abu Dhabi Investment Authority to acquire and merge Italy-based Kedrion and UK-based Bio Products Laboratory (BPL), in a deal valued at $2.7 billion. Both companies develop, manufacture and market therapeutic products from blood plasma. The new entity will have annual revenues of approximately €1.1 billion, built on a portfolio of 37 products reaching over 100 countries.

Private equity seeks innovative buyouts

The healthcare sector has become a focus for global PE firms looking to capitalize on post-pandemic growth opportunities. Fueled by a record amount of dry powder in the market, global PE business remained robust in 2022, with a total of 914 business worth $128.4 billionsurpassing every other annual total on Mergermarket’s record except 2021, when companies spent an all-time high of 276.8 billion US dollars through 1,105 deals on health care assets.

The highest value global PE deal of the year in the PMB sector saw Walgreens Boots Alliance acquire US-based Summit Health by Walgreens Boots Alliance through its subsidiary, Village Practice Management, for 8.9 billions of dollars.

Other major deals include: the purchase of Danish hearing aid manufacturer WS Audiology by EQT and Santo Holding for US$5.7 billion; the sale of Covetrus, a US animal health technology and services company, to Clayton, Dubilier & Rice and TPG Capital for $3.4 billion; the aforementioned GSK agreement for Affinivax; KKR’s acquisition of IVIRMA Global for $3.3 billion; and Astorg Partners’ purchase of German pharmaceutical maker Corden Pharma International for $3.2 billion.

Corden Pharma, which employs 2,600 people at 11 manufacturing plants in Europe and the United States, has seen strong growth this year on the back of fast-growing drug modalities such as messenger RNA (mRNA) vaccines.

Further down the list, a consortium formed by US PE company Carlyle Group and French PE company PAI Partners has agreed to acquire Theramex HQ UK Ltd, a local specialty pharmaceutical company focused on women’s health, from Luxembourg company PE CVC Advisers. The deal, valued at $1.4 billion, will see Carlyle and PAI target international expansion of the women’s health platform, which has expanded to serve more than six million women in 57 countries across EMEA, APAC and South America under CVC ownership.

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While unable to reach the dizzying heights of 2021, healthcare deals in 2022 showed solid growth from pre-2021 levels. This strength was largely due to the trend of large pharmaceutical companies, particularly those based in the United States, to take advantage of the normalization of biotech valuations to rebuild its pipelines. Yet historic trends, such as the need to expand into new markets – a trend seen particularly among UK firms – and continued active interest from PE firms will continue to ensure that much business changes hands in 2023.

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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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