Mergers and acquisitions were widely expected to be a key theme in the biopharmaceutical industry in 2022. Several big pharma companies were flush with cash leading into the year, thanks to their top-selling COVID-19 products, innovative branded medications, and high-value divestitures. Eleven mega-blockbuster medicines, defined as products generating sales greater than $5 billion per year, are set to lose global patent protection this decade.

Topping it off, clinical and early commercial-stage biopharma valuations dramatically fell during the last quarter of 2021—a trend that gained momentum during the first three quarters of 2022.

Amgen-Horizon

Amgen’s recent $27.8 billion acquisition of the rare disease specialist Horizon Therapeutics takes this year’s top spot as the industry’s priciest buyout. This upsized deal lands Amgen a well-rounded portfolio of high-margin rare disease drugs, including the thyroid eye disease treatment Tepezza.

Pfizer-Biohaven

Pfizer’s $11.6 billion buyout of Biohaven Pharma is the year’s second-largest M&A transaction in the industry. Through this mid-sized buyout, Pfizer gained the migraine drug Nurtec ODT, which is expected to play a vital role in the drugmaker’s battle against a slew of upcoming patent expires.

Pfizer-Global Blood Therapeutics

The year’s third priciest buyout is Pfizer’s $5.4 billion deal for the sickle cell disease specialist Global Blood Therapeutics. After winning a bidding war for Global Blood in August, Pfizer added the oral SCD drug Oxbryta to its diverse product portfolio. Oxybryta is forecasted to surpass $1 billion in annual sales at its peak. However, this revenue prediction will depend on the commercial uptake of developing rival gene-edited therapies.

BMS-Turning Point

Bristol Myers Squibb’s $4.1 billion buyout of Turning Point Therapeutics is the year’s fourth-largest buyout. This all-cash deal, announced last June, centered around the experimental lung cancer candidate, repotrectinib. If approved, Wall Street estimated that repotrectinib should generate peak sales of more than $1 billion annually. Repotrectinib, in turn, may play a vital role in the big pharma’s battle to minimize the impact of upcoming patent expires for the mega-blockbuster cancer therapy Opdivo and the blood thinner Eliquis (co-marketed with Pfizer).

Amgen-ChemoCentryx

Amgen’s $3.7 billion acquisition of the ChemoCentryx last August is this year’s fifth-largest deal. The impetus behind the transaction was chemocentryx’s FDA-approved anti-neutrophil cytoplasmic antibody-associated vasculitis drug, Tavneos.

There have been 31 total buyouts in the pharmaceutical industry in 2022.  For comparison, the sector notched 25 M&A deals in 2021, 23 in 2020, 28 in 2019, and 16 in 2018, according to Chimera Research Group. The industry has been busier than usual on the M&A front. However, the size of the deals in 2022 is also a noteworthy feature of this uptick in biopharma buyouts.  For 2022, the average among the five largest deals presently stands at $10.5 billion. In 2021, the mean ‘upsized’ deal came in at $6.4 billion. By contrast, the industry’s appetite for high-dollar buyouts surged to $17.5 and $33.1 billion in 2020 and 2019, respectively. In 2018, pharma’s average large deal came in at $7.8 billion. In short, this year’s pharma M&A activity was characterized by a sizable uptick in the number of buyouts and a modest increase in the average deal size on the top end of the spectrum relative to 2021.  Biopharma hasn’t shown much interest in returning to the type of mega-deals seen in either 2020 or 2019.

Reference: Biospace.com