Despite soaring biotech valuations thanks to lingzhi 2 day diet new a then-boiling IPO market, Big Pharma wasn’t shy about buyouts within the first quarter, based on PricewaterhouseCoopers, helping make amends for some fairly flat M&A activity among smaller drugmakers.
Per PwC’s latest acquisitions report, pharma companies wrapped up 16 deals in Q1, a 33.3% jump over the prior quarter and comparable to the same period in 2013. At $76.8 billion, though, the entire buyout value dropped 74.1% in the year-ago quarter, but PwC highlights that the period was a bit inflated by a few big transactions–a common problem in analyzing M&A trends. Biotech companies closed just 8 acquisitions around the period, four more than in Q4, but measuring up to an 82.7% dip in dollar value.
PwC expects the momentum to carry on into the remainder of 2014, and Q2’s spree of deals bodes well for your prediction. It’s likely to be a big year for M&A, the firm figures, thanks partly to pharma’s appetite for promising biotechs but also due to the industrywide shift toward specification.
CEOs in the industry “are increasingly optimistic regarding their companies’ prospects and are seeking possibilities to boost their businesses,” PwC’s analysts noted in the report. “These objectives, coupled with strong equity markets, overall economic stability and trends in each of the sectors inside the industry, are creating an atmosphere ripe for continued M&A activity.”
The type of trends is pharma’s current interest in shedding pounds. There have been 13 divestitures across the life sciences in the first quarter, tallying $10.1 billion because the likes of Bristol-Myers Squibb ($BMY) and Johnson & Johnson ($JNJ) have favored investor-pleasing sell-offs and centered on their core units. That trend–as evidenced by unit swaps between GlaxoSmithKline ($GSK), Novartis ($NVS) and Eli Lilly ($LLY)–is alive and doing fine within the second quarter, too.
Hanging over any discussion of life sciences M&A in 2014, obviously, would be the two big will-they-won’t-they stories of history month: Valeant Pharmaceuticals’ ($VRX) unwelcome $46 billion bid for Allergan ($AGN) and Pfizer’s ($PFE) now $119 million passive-aggressive 2 day diet strong version shot at overtaking AstraZeneca ($AZN). If a person or each of those deals comes true, PwC’s prediction of “a heightened degree of M&A activity in 2014” will appear more than a little conservative.