In a recent study published in Concurrences Law & Economics, Cornerstone Research experts found a significant association between biopharmaceutical mergers and acquisitions (M&A) and the likelihood of new and novel therapies coming to market. After analyzing over 33,000 drug projects between 1994 and 2025, the authors also found that drugs in development which undergo M&A between a large and small firm are three times more likely to launch, helping to increase the odds of innovation reaching patients.
Key findings from the study are included below:
1) Biopharmaceutical M&A can increase the likelihood of new drugs making it to patients, for both new and novel treatments.
- Drugs in development that undergo M&A are nearly twice as likely to launch than non-acquired ones.
- Novel drugs which undergo M&A are over three times more likely to launch than non-acquired ones. Novel drugs are defined as those that received an expedited review designation from the FDA, which recognizes drugs that could “fill an unmet medical need” or “demonstrate substantial improvement over available therapy.”
- Even after controlling for drug candidate and firm characteristics, there remains a large, positive, statistically significant association between M&A and new and novel drug launches.
2) M&A brings new drugs to patients by allowing large acquiring biopharmaceutical firms to provide resources, expertise and infrastructure to smaller firms. The researchers compare drugs in development which undergo M&A with a large firm (those with prior experience launching a drug) to those that undergo M&A with another small firm (those with no prior experience launching a drug). Drugs in development which undergo large-small firm M&A are:
- Nearly three times more likely to launch,
- Five times more likely to launch as novel drugs, and
- Nearly 24 times more likely to launch with a new mechanism of action — representing an entirely new way of treating a disease.
3) When an acquiring firm has more experience, there is a greater likelihood that an acquired drug in development will launch.
- Drugs in development are nearly twice as likely to launch, and three times as likely to launch as novel drugs when they are acquired by a firm with experience developing at least 17 drug projects, compared to when they are acquired by a firm with less experience.
- Among drug projects that are acquired within the first three years of development, those that are acquired by a large firm are 2.4 times more likely to launch, and nearly 6 times as likely to launch as novel drugs, relative to drug projects acquired by a small firm.
This Cornerstone study adds to the growing body of research on the unique and critical role of M&A in the biopharmaceutical innovation ecosystem, building on an article published in 2024 which examined the many positive mechanisms by which biopharmaceutical M&A may drive innovation. This study demonstrates the empirical, statistically significant, positive impact of biopharmaceutical M&A on innovation for patients.
In order to preserve the continued and demonstrated success of this ecosystem, policymakers must recognize and support the critical role that life sciences M&A plays in bringing new treatments to patients who need it most.