Blog Post

Navigating the Pharma Deal Universe: Insights from JPM 2024 and the Road Ahead

Feb 14, 2024

Dr. Anthony Starling
Vice President
Jatin Gupta
Associate Vice President

With the end of JPM 2024, we reflect on the state of the pharma deal universe and look to a future of intense competition where only flawless execution will deliver success. consensus on the annual event, which traditionally kicks off and sets the tone for the year, seems to be moderately positive. We look beyond the headlines to anticipate future direction, with the context provided by the past.

Position of JPM in pharma M&A:

After a couple of quiet years, JPM is back with a steady flow of deal announcements but this followed a significant uptick in the deal flow in Q4 2023. A billion-dollar buyout announced just days before the event, demonstrates that deals are not waiting for JPM announcements anymore. Nonetheless, JPM is set remain a key event and serve as the year’s starting gun in large segments of our industry. Nonetheless, it is clear that companies are not waiting for JPM to announce their deals anymore,.

Deal analyses:

Bottom line – Megamergers are a thing of the past, at least for now. The FTC’s attention, IRA’s implications on launch control and the cost of debt may all be weighing on this, but Pfizer-Seagen demonstrates the potential for big acquisitions when companies are the right fit. Pharma search and evaluation scouts continue to be highly active with asset-centric remit; at JPM 2024, Takeda described how “almost every biopharmaceutical company” was evaluating Nimbus at the time of its acquisition in 2022, even though the company had executed a down-round a few months earlier. Clinical data remain key enablers of deal-making, but valuations rely much more on circumstance, which is perhaps why the Novartis-Cytokinetics discussions (big rumor at JPM) never reached a transaction. The biotech downturn has resulted in a distillation in target companies, even as trend for pharma to fast follow peers into validated drug targets and markets continues. .

What does this mean for our biopharma partners?

The cyclical nature of our industry allows us to predict the future with some confidence. We see patent cliffs having a broad impact across Big Pharma, which, with >$1T in firepower to deploy, must now take on a pipeline restocking exercise. Healthcare VCs have raised over $90B  over the last four years to drive innovation, and there are signs that the IPO market is opening up again. We anticipate that there will be growing competition and increasing valuations around mid-stage validated assets, especially pre-launch. With all pharma companies experiencing similar macroeconomic pressures, BD strategies are likely to be differentiated on portfolio management and R&D development.

Increased competitive intensity, decreased regulatory flexibility and increasing reimbursement challenges all mean that it is more important than ever to get BD, development, launch and lifecycle management right the first time. The winners will be those with the foresight to provide new drugs that are positively differentiated by data and customer perception. Contact Prescient today to see how our view of the dynamic present can inform your future, combining hindsight, insight and foresight..