avatarFlavio Aliberti

Summary

In 2021, the life science sector's anticipated surge in mergers and acquisitions (M&A) fell short of expectations, with fewer significant deals materializing compared to 2020.

Abstract

Despite high hopes at the end of 2020 for an unprecedented level of M&A activity in the pharmaceutical industry, with an estimated firepower of $1.5 trillion, the year 2021 concluded with a lower M&A activity than the previous year. Analysts had predicted an all-time high, but the largest deal of 2021 was nearly equivalent to the AstraZeneca-Alexion deal alone from 2020. The COVID-19 pandemic disrupted M&A strategies, leading to a focus on expanding portfolios, enhancing production capacity, and entering new markets rather than on innovative mRNA or cell gene therapies. U.S. companies were particularly active in both domestic and international acquisitions, while UK firms were more often on the selling end. The article also provides an interactive video for readers interested in a deeper understanding of the dynamics at play.

Opinions

  • The pharmaceutical industry's M&A activity in 2021 was disappointing compared to the high expectations set at the end of 2020.
  • The pandemic significantly impacted M&A strategies, with companies prioritizing portfolio expansion, production capacity enhancement, and market entry over cutting-edge treatments like mRNA or cell gene therapies.
  • There is a notable trend of U.S. companies being aggressive in acquisitions, both domestically and internationally, while UK companies are more frequently selling assets.
  • The article suggests that there is a reshuffling in the market, with certain countries like Australia and Denmark performing well in M&A activities.
  • The author encourages readers to engage with the content by watching an interactive video and tweeting about the article for further discussion.

Is It True That Life Science Orgs Went Shopping?

Those expecting a massive Life science shopping spree in 2021 were disappointed.

Photo by Markus Spiske on Unsplash

End of 2020, analysts expected an all-time high for M&A in Pharma in 2021, with the industry’s firepower estimated to be in the $1.5 trillion.

The truth is that several of the most important deals announced never materialized, and 2021 concluded on a low note when compared to the previous year.

To give you an idea, the largest deal in 2020 ($39 billion AstraZeneca buying Alexion) was nearly equal to the value of the top five M&A transactions in 2021.

What went wrong?

Looking at all 63 agreements that have been made public, it appears that the epidemic has thrown a wrench in the plans.

A few things to think about:

Pharma companies concentrated their M&A strategy on price and scale.

The majority of the money was spent in 2021 on expanding the portfolio and pipeline, enhancing production capacity, and entering new markets.

Only a few transactions on mRNA or Cell Genes treatments were made.

There is more, though.

When looking at transactions from the buyer’s perspective, there is a reshuffling going on, with US corporations buying a lot both domestically and internationally, while UK companies are mostly selling. Australia and Denmark outperformed the competition.

If you want to learn more about it, check out this interactive video.

Thanks for reading. Tweet me @flavalib and let me know you read this!

If you enjoyed the reading, I suggest you look at

_______________________________________________________________

Disclaimer: Views or opinions represented in this article are personal and belong solely to the article writer and do not represent those of people, institutions or organizations that the writer may or may not be associated with in professional or personal capacity, unless explicitly stated.

_________________________________________________________________

Illumination
Science
Philosophy
Recommended from ReadMedium
avatarOssiana Tepfenhart
Korea’s Shocking Incel Problem Is So Much Worse Than You Think

No, for real, this is terrifying.

10 min read
avatarKaki Okumura
What to do if you hate exercise (or need some support motivating yourself to do it)

Lessons from the most optimistic sport in the world

4 min read
avatarCecilia Presley
5 Ways Female Narcissists Abuse Their Male Partners

Men are often abused this way and don’t know it

9 min read
avatarRebecca✨
I Started Waking up at 4:30 a.m. Daily— This Is What Happened

For 21 days, I wake up at 4:30. The results were CRAZY.

4 min read
avatarDevon Price
Laziness Does Not Exist

Psychological research is clear: when people procrastinate, there's usually a good reason

11 min read
avatarBryan Ye
How To Wake Up at 5 A.M. Every Day

An unconventional and compassionate guide to becoming an early bird

15 min read