In the wake of the 43rd J.P. Morgan Healthcare Conference held last week, industry leaders underscored the essential role of mergers and acquisitions (M&A) in fueling America’s life sciences industry. In this annual spotlight on the life sciences industry, M&A and other collaborations were a centerfold focus as a way for companies of all sizes to navigate the long, costly journey to bring new treatments and cures to patients.
Key insights from life sciences industry leaders and experts are highlighted below:
Early-stage life sciences companies depend on M&A to bring breakthroughs from the lab to patients.
- “Biotech partnerships often involve small innovative firms with potential treatments uniting with larger firms who can bring those treatments to market.” – Biotechnology Innovation Organization
- “We are well-funded, so we can take this forward for several years ourselves. But we recognize the need of eventually having a partner [though] they have to agree to our vision for the product.” – Adam Steensberg, CEO, Zealand Pharma
- “The majority of the value that we create is through smaller deals and partnerships where we can use our scale.” – Joaquin Duato, CEO, Johnson & Johnson
Life sciences M&A allows companies of all sizes to leverage specialized knowledge and resources.
- “No one company can do everything. It is absolutely critical to scale and build strategic focus in core therapy areas. To scale a business in a given therapy area, you need deep subject-matter expertise…Ultimately our goal in pharma is to get great medicines to market…” – Chris Sheldon, SVP, Global Head of Business Development, GSK
- “Whether it be through collaboration, partnership, or outright straight acquisitions, we expect a lot of collaboration and partnership in this space to let the tech-focused companies do what they’re best at and let the biopharma companies do what they’re best at and combine the two where there can be a multiplier impact.” – Subin Baral, EY Global Life Sciences Deals Leader
- “Partnerships can help overcome scientific and technological challenges, create greater cost efficiencies, share resources, and accelerate the delivery of innovative treatments that address unmet needs.” – Ruxandra Draghia-Akli, EVP, Head of R&D, Novavax
Policies which chill life sciences M&A risk stalling investment in new breakthroughs.
- “A recent hindrance to a healthy M&A environment has been a growing disparity in the biotech arena…[A]ccording to [EY Americas Life Sciences Sector Lead Arda Ural], companies led by those who are new to the space or those built on a new platform technology are finding it more difficult to secure financing.” – Fierce Pharma
Competition policies must support the fundamental role of M&A in driving American life sciences innovation, competition and growth.
- “I am optimistic that the industry will benefit from a macroeconomic environment that supports continued innovation and encourages healthy M&A and partnering activity.” – Fred Chereau, SVP, Strategy and Business Development, Alexion, AstraZeneca Rare Disease
- “We’re on the up and up, with quite a few companies sitting in the green room, waiting for predictability and a stable backdrop…The view is that predictability and stability in the environment creates clarity for dealmakers.” – Roel van den Akker, Pharmaceutical and life science deals leader, PwC