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 immunology - are forecast to grow at 9-12% and 6-9% CAGR, respectively, lifted by significant increases in new treatments and medicine use and offset by the impact of biosimilars.
In neurology, many new medicines are expected across a range of diseases, including novel migraine therapies, potential treatments for rare neurological diseases and potential therapies for Alzheimer’s and Parkinson’s diseases.
Smaller-scale acquisitions
and bolt-on
Biopharma mergers and acquisitions (M&As) for 2021 was one of the lowest in a decade. According to the annual EY M&A Firepower report, deals totalling US$108 billion were concluded, down from US$128 billion in 2020 and US$261 billion in 2019. It would have been far worst were it not for a flurry of deals in the last quarter.
Unlike the previous years, there was no mega deal. Rather the deals were mainly bolt-on acquisitions which were smaller in scale, aimed at bulking up R&D pipelines. Oncology was a key driver, as was rare disease and immunology/ inflammation.
The largest deal involving Australia’s CSL’s acquisition of Switzerland’s Vifor Pharma for US$11.7 billion was announced in December. With the purchase, CSL, who is heavily dependent on vaccines and blood plasma products, will have a more diversified portfolio with the addition of ten commercialised products, including Ferinject/Injectafer, Venofer, Veltassa and Korsuva.
Size-wise, it was just ahead of Merck & Co.’s US$11.5 billion takeover of Acceleron
Pharma aimed at strengthening its growing cardiovascular portfolio. The takeover gives Merck Acceleron’s lead clinical candidate sotatercept, a potential first-in-class therapy for pulmonary arterial hypertension, which has potential sales of US$2 billion toUS$3 billion.
Biopharma companies closed the year with near-record levels of firepower, the report noted. EY teams define firepower as a company’s capacity to do M&A based on the strength of its balance sheet. Only 9% of biopharma’s firepower was deployed on M&A in 2021, compared with 25% in 2019 and 12% in 2020.
Analysts expect that with the looming patent cliff, as nine of the industry’s top 20 drugs by sales are set to lose exclusivity
over the coming years, there will be a surge in deals going forward. As PWC noted in its Pharmaceuticals and Life Sciences: Deals 2022 Midterm Outlook, “All of the stars are aligned for there to be a flurry of deals activity across all areas of the sector despite the slow start to the year so far. Many large pharma players are flush with cash (particularly those that have Covid-19 treatments in their arsenal), biotech valuations have been normalising after years of a boom market and the 2025 patent cliff is rapidly approaching, all making for a strong deal environment.”
But with increased scrutiny from the US Federal Trade Commission around larger deals, PWC expects that deals will mainly be bolt-on transactions in the US$5 to US$15 billion range, though it does not entirely rule out the potential for larger deals.

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