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January 8, 2024

LifeSciencesIntelligence explores the primary goals of mergers and acquisitions in the life sciences industry with insight from three experts.

 – Mergers and acquisitions (M&A) play a critical role in the healthcare industry. As more products come to market, companies can leverage M&A to elevate their position in the market. The value of mergers and acquisitions in the pharmaceutical industry is understood and echoed across life sciences acquisitions.

LifeSciencesIntelligence spoke to three industry leaders to understand the existing M&A landscape and what to expect moving forward: Daniel Chancellor, Director of Thought Leadership for Evaluate (a Norstella company); Gadi Saarony, CEO of Advarra; and Joel Morse, CEO and Co-Founder of Curavit Clinical Research.


Understanding the mergers and acquisitions landscape is critical for companies in the industry. Life sciences companies must stay current on the significant players, stakeholders, and trends to understand their competition and evaluate their M&A plan.

Throughout 2023, many significant deals were propelling the M&A landscape in the life sciences industry.

“There’ve been some very clear, big deals,” Saarony began, describing the landscape. For example, “Look at Pfizer and Seagen— that’s a huge deal. It was a $43 billion deal size.”

In March 2023, Pfizer Inc., one of the leading pharmaceutical companies in the United States, confirmed rumors of its plans to acquire Seagan, a smaller oncology-focused pharmaceutical manufacturer. As Saarony mentioned, the deal was valued at approximately $43 billion, with each share accounting for $229.

Seagan is a sought-after pharmaceutical company, with other major players, including Merck, eyeing it before Pfizer staked its claim.

However, the company comes with an unmistakable, hefty price tag. According to the press release, Pfizer intends to finance the acquisition through $31 billion in new long-term debt.

Despite the cost of this deal, Pfizer presumably believes in the value of Seagan’s portfolio, which manufactures three oncology drugs and commercializes an additional medication. Pfizer revealed that the agreement will help expand its oncology portfolio and bolster its position in that therapeutic area.

Saarony also highlighted some acquisitions by Merck, Astellas, and Novartis, indicating that large pharma has been buying smaller and mid-size players. He explained that the investments have not focused on one particular therapeutic area but span various therapeutic areas, modalities, and technologies.

“Large pharma [companies] have to fill gaps in their portfolios, and they’re going after what’s complementary to what they have or a new space they want to get into,” Saarony added.

For example, the Pfizer–Seagan deal will complement Pfizer’s existing oncology portfolio and help expand it, providing the company with a broader reach. The company identifies Seagan as a powerhouse in the antibody–drug conjugate (ADC) space, facilitating one-third of the 12 FDA-approved ADC.

More specifically, they manufacture Dcetris (brentuximab vedotin), Padcev (enfortumab vedotin), and Tivdak (tisotumab vedotin) while commercializing Tukysa (tucatinib).

However, the life sciences mergers and acquisitions (M&A) landscape is evolving to accommodate changing practices, economic pressures, and discoveries. Although the volume of acquisitions in 2023 was greater than in 2022, it hasn’t kept up with peak years.

According to Evaluate’s quarter 3 (Q3) roundups, Q3 of 2023 had the lowest number of biopharmaceutical M&As since Q2 in 2021, with only 24 total transactions. Evaluate projects that M&A activity will be around $150 billion this year. Meanwhile, Leerink Partners estimates that healthcare M&As in 2023 will be valued at $181 billion, with biopharmaceuticals accounting for 33% of deals and 58% of the deal value.

These variations may depend on the definition of the industry. However, Chancellor maintains, “This is an increase from 2022, although it’s around the average of previous years — some of which have seen some huge industry consolidation deals.”

Even though the M&A landscape has seen a lot of variety, Chancellor identifies trends that have played a critical role in M&A. He revealed that most acquisitions are focused on late- or commercial-stage biotech companies with complementary product portfolios with the acquiring organization.

Chancellor notes that the highest demand is for companies with first-in-class drugs for newer oncology and immunology targets. Leerink Partners estimates that oncology is the most active and valuable therapeutic area, with 11 deals this year. The value of these deals is an estimated $49 billion, including the $43 billion Pfizer–Seagan deal. Comparatively, immunology was the third most active area, accounting for 7 contracts valued at $25 billion.

Beyond that, there has been a significant focus on rare diseases. Although rare disease mergers and acquisitions were more active than immunology, with 9 deals, they are valued lower than immunology transactions at $13 billion.

Companies are also looking to enter the obesity space, Chancellor noted.

A prime example is the recent Roche announcement that revealed the company’s plans to acquire Carmot Therapeutics and its clinical-stage obesity drug portfolio. Although the deal is in its early stages, the company estimates that $2.7 billion will be paid upfront, and an additional $400 million may be spent through milestone payments.

Benefits of M&A

The experts told LifeSciencesIntelligence that mergers and acquisitions provide significant industry benefits, promoting innovation and discovery.

“M&A provides an avenue to reinvest in emerging science and to ensure that the pipeline keeps flowing,” noted Chancellor.

When big companies with more capital purchase smaller innovative companies, they establish a symbiotic relationship where the parent company benefits by adding to its portfolio, and the acquired company has the funding to continue innovation.

Saarony explained that innovative biotech companies acquired by larger pharmaceutical practices sometimes do not have to integrate fully into the business. Instead, they can function as a sub-company.

“They allow them to run in a more nimble, innovative way. So, what [the companies] are getting is a well-funded startup, which is great for the ecosystem and everyone. Most importantly, it’s great for patients who hopefully get therapies.”

“The days where pharma may have bought something to shelve it are long gone,” continued Saarony.


As with any industry, mergers and acquisitions in life sciences evolve with the pace of the market and economic climate. Sometimes, these changes result in challenges that limit M&A development, while other times, they present opportunities for growth and further progress.

Oddly enough, challenges securing capital have benefited the more prominent players in the industry who are hoping to acquire smaller companies.

“Curavit focuses a lot on the smaller end of the market, innovative companies, digital therapeutics, and digital health companies,” Morse prefaced. “They have struggled with the capital markets. They’ve dried up at the end of 2022 and certainly into 2023, which hurt innovation.”

The difficulty of securing capital has caused the costs of these companies to go down, presenting an opportunity for more prominent companies to round out their portfolios and fill the pipeline.

“[Curavit] sees that as a huge positive because that additional investment can go into some innovative companies, which is healthy for the entire ecosystem,” Morse continued. “The big players, like the Mercks, Pfizers, and Sumitomos of the world, have the capital to make investments in innovative companies that have worked hard and, in some cases, gotten over the line with the FDA but need market access and more health economic research.”

Another opportunity that is expanding M&As in life sciences is the looming patent expirations approaching. As companies lose market exclusivity, they need to acquire novel assets that can generate the revenue they will inevitably lose upon the emergence of generic therapeutic alternatives. While that may be challenging for companies holding the patent, it lends itself to a more significant number of acquisitions to add to their portfolios.

“Larger companies face patent cliffs of varying sizes, which necessitates refreshing their product portfolios, especially in light of the Inflation Reduction Act,” Chancellor noted.


Conversely, securing capital can challenge companies looking to acquire or merge with other players.

Another challenge Morse and Saarony identify is Security and Exchange Commission (SEC) scrutiny. The SEC is a US regulatory agency that enforces security laws, regulates security markets, monitors disclosures, protects investors, oversees investment funds, and promotes good corporate governance practices.

Regarding life sciences mergers and acquisitions, the SEC enforces security laws for pharmaceutical, biotechnology, and medical device companies.

When life sciences companies engage in M&A activities, they must disclose material information about the proposed transaction to their shareholders and the investing public, including details about the terms of the deal, potential risks and benefits, financial implications, and any regulatory approvals required. The SEC reviews these disclosures to ensure they comply with the applicable rules and regulations, such as the Securities Act of 1933 and the Securities Exchange Act of 1934.

The SEC’s role also includes monitoring and ensuring compliance with insider trading regulations during M&A transactions. The SEC investigates and takes action against any potential violations of insider trading laws to maintain the integrity of the securities markets.

Furthermore, the SEC may scrutinize M&A transactions from an antitrust perspective. Alongside other regulatory bodies, such as the Federal Trade Commission (FTC), the SEC evaluates whether proposed mergers or acquisitions in the life sciences industry could substantially lower competition or harm consumers. These reviews help determine whether the transaction should be approved or subject to further examination.

According to Morse and Saarony, the SEC is becoming more scrutinous of mergers and acquisitions, with more criticism on what it’ll approve and a focus on antitrust. These barriers may challenge companies in this space, altering negotiations and potential collaborations.

“FTC will continue to scrutinize deals, although the go-ahead for Amgen–Horizon and likely approval of Pfizer–Seagen bodes well,” Chancellor predicted.


LifeSciencesIntelligence asked the experts to explain what may make a life sciences company appealing for an acquisition or merger. Understanding these factors can help guide future deals or prompt companies to make changes that improve their appeal.

“In pharma, it’s simple. Does it compliment their pipeline or fill a gap at the end of the day?” posed Saarony.

He adds that the current landscape, especially with service and technology providers and clinical research organizations (CROs), is fragmented and ready for consolidation.

“We’re about the ethical compliant conduct of clinical trials,” explained Sarrony, providing an example of how mergers and acquisitions must align with the company’s overall mission.  “I’m not going to get into any services or technologies that, by definition, are the antithesis of that.”

“My important client sets are CROs,” he added. “I’m not going to get into any services or acquire any companies that compete with CROs; it’s too much of a channel cost.”

The examples provided by Saarony are based on his organization’s needs; however, each company’s decision is seen through a different lens, depending on their goals and business models.

“Acquiring companies are often looking for near-term growth drivers, which means late-stage pipeline drugs are in high demand,” added Chancellor. “For earlier-stage drugs, the conversation is often about licensing and partnering, which allows both sides to mitigate the risks associated with R&D.”

For instance, in the two examples mentioned before, the Pfizer–Seagan and Roche–Carmot deals, the companies chose their acquisitions because they added a particular asset aligned with their company goals.

In the Pfizer–Seagan deal, the company hoped to add to its oncology portfolio, making Seagan’s four FDA-approved drugs particularly enticing. In 2022, Seagan’s revenue increased 25%, generating roughly $2 billion, including $1,707 million from total net product sales.

Beyond that, Seagan predicted that 2023 would generate approximately $2.2 billion in revenue, accounting for a 12% year-over-year growth. Additionally, Pfizer estimated that Seagen will generate roughly $10 billion in 2030 and continue to amass income by advancing and expanding its existing oncology portfolio. Both of these projections factored into acquisition choice.

For the Roche–Carmot deal, three obesity assets in late-stage clinical trials present an opportunity in the growing obesity drug landscape.

Beyond looking at the patient improvement lens, which is the primary end goal for all of these organizations, Morse adds that companies are considering whether the assets acquired during a business transaction are a marked improvement — regarding health outcomes and health economics.

“In the current environment, where M&As are typically bolt-on acquisitions rather than large mega-mergers, the most attractive candidates have a narrow therapeutic focus and best-in-class or first-in-class assets,” noted Chancellor.

These late-stage assets minimize an acquiring company’s investment in research and development while maximizing the potential profits.


Beyond determining the actual acquisition and whether it is a good fit, companies must be prepared for the integration of the two entities.

“Getting it right in terms of having bought the right asset is maybe 50% of the story at most,” began Saarony. “It’s ensuring that it functions afterward, that [the acquiring company] doesn’t lose the key people or clients.”

Even though some companies function as startups within larger pharma entities, he notes that the integration needs to start from day one.

“Day one, all the back-office systems get integrated,” asserted Saarony. Beyond the system integration, the companies switch to the new policies and procedures of the parent company. It takes time to dissolve the old protocols and bring in the new ones, but that is paramount before considering product synergies.

“First, we want to stabilize the house and ensure that we preserve the best of the culture from both companies, the acquired and the acquirer, making sure that there’s clarity around who we are — we’re one company,” said Saarony.

Morse added, “It is important to make the company that’s being acquired feel at home. And part of that is making sure that everything is the same, which takes a while.”

According to AON’s M&A Risk in Review report, approximately 98% of M&A deals teams prioritize talent acquisition, retention, culture, and leadership as moderate-to-significant focus areas.

“A good portion of our revenue gets generated from people. When acquiring a company, we don’t want to lose the people who are generating the revenue. This is a very pragmatic financial view,” said Saarony.

Although companies in the Aon report list employment law and labor relations as the primary workforce concern, acquirers must also consider the company culture and the environment. In descending order, the following factors are regarded as secondary workforce concerns: culture alignment, leadership and talent retention, pension liabilities, and headcount synergies.

“In general, as much as we’re buying products, we’re buying people, and you better learn how to retain them and keep them happy,” added Saarony, revealing that redundant roles will be eliminated. Still, companies should consider how to keep staff happy during the acquisition.


Beyond providing insight into the M&A landscape, the experts also provided predictions for the industry in the coming years. “Wider macro environment suggests that M&A levels should continue to pick up,” predicted Chancellor.

Morse and Saarony echoed the excitement and positivity looking toward the future.

“It’s an exciting time, and we’re bullish on 2024. Look out for a lot of activity that we can’t even probably predict right now,” noted Morse.

“The great thing about our industry is it is resilient. [It’s] going to have the ups and downs of the economy, the political environment, and the social environment,” Gadi added. But “our industry is resilient. Innovation will continue. The focus on driving and then delivering therapies to patients will continue. R&D will thrive.”

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