Pharma Deals & Trends: M&A, Licensing, and R&D Evolution
Merger and Acquisition Trends: A Two-Year Overview
Mergers and acquisitions have shown an upward trend over the past two years, with Q3 2024 witnessing the highest activity. This surge in M&A activity, particularly in the pharmaceutical industry, has been driven by consolidation, strategic growth, and a focus on de-risked assets, especially in oncology. Notable examples include Lundbeck's buyout of Longboard to expand its neuro-rare franchise and Eli Lilly's acquisition of Morphic, aimed at advancing treatments for inflammatory bowel disease and other areas, underscoring the emphasis on de-risked assets and therapeutic areas like oncology.
Two years Mergers & Acquisitions data (2023- 2024)
Fig 1: Mergers & Acquisitions data
“Lundbeck acquired Longboard Pharmaceuticals in a $2.6 billion deal”
“Eli Lilly acquired Morphic in a $3.2 billion deal”
Pharmaceutical Licensing Deals: A Four-Year Overview
The pharmaceutical industry has experienced a steady increase in deal activity over the past four years, although 2022 saw a significant decline. In that year, the number of in-licensing deals in the biopharmaceutical sector dropped sharply to 90, down from 128 in 2021, with the total deal value also falling from $15.55 billion in 2021 to $5.84 billion. This decline was attributed to several factors, including the ongoing impacts of the COVID-19 pandemic, complex international relations, and reduced financing options for biopharmaceutical companies. In 2024, the number of deals increased, highlighted by a significant licensing agreement where Merck expanded its oncology pipeline by licensing LM-299, a Phase II PD-1/VEGF bispecific antibody, from LaNova Medicines for up to $3.28 billion. Additionally, in January 2024, Novartis finalized a $4.35 billion deal with Shanghai Argo Biopharmaceutical for a Phase I/IIa cardiovascular asset and a global Phase I asset.
“Merck licensed LM-299 from LaNova Medicines for up to $3.28 billion, expanding its oncology pipeline.”
“Novartis closed a $4.35 billion deal with Shanghai Argo Biopharmaceutical for early-stage cardiovascular and global Phase I assets.”
Four years Licensing data (2021- 2024)
Fig 2: Licensing deals
The Evolution of R&D Deals in Pharma: A Four-Year Analysis
The pharmaceutical industry experienced a steady rise in R&D agreements up to 2022, followed by a decline in 2023 and 2024. This downturn was largely driven by macroeconomic challenges, heightened regulatory scrutiny, and a strategic shift toward prioritizing quality over quantity in partnerships. Despite the overall decrease, 2024 featured notable collaborations, including Caris Life Sciences Announces Partnership with Merck KGaA. This partnership helps to discover novel cancer targets and accelerate first-in-class antibody drug conjugate development.
Four years Research & Development data (2021- 2024)
Fig 3: Research & Agreement deals
“Caris Life Sciences partnership with Merck KGaA for up to $1.4 billion deal.”