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M&A Has Been Down, But EY Argues Conditions Are Right For An Uptick In 2023

Executive Summary

Despite concerns about the impact of the Inflation Reduction Act and constraining factors like inflation, EY believes more than $1.4tn in life sciences industry “firepower” should result in increased deal-making this year.

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Biopharma Has Money To Spend On M&A, EY Says – As Well As Need

Upcoming patent expirations are increasing the sector’s need to acquire candidates and products that can deliver near-term revenues, driving up valuations, EY’s 2024 Firepower report says.

2022 Deal-Making Snapshot: One Big Deal Didn’t Change The Downward Trends

Even with Amgen’s $27.8bn acquisition of Horizon in mid-December, biopharma M&A volume, total value and average deal value all dropped substantially from 2021.

Slew Of Challenges Calls For Revised Biopharma Playbook

While not immune to the impact of a storm of macroeconomic pressures, pharma companies have pulled through before, and they’ll do it again. However, this time around, the economic, geopolitical and internal cost and revenue pressures are unique and weathering the near-term turbulence will call for smart investment strategies that not only focus on quality assets, but that update companies to take advantage of new digital opportunities.

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