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  • Fraol Galan

Evolution of the Biopharma M&A Market and Partnership Landscape, 2018-2023

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The biopharma M&A market and partnership landscape has evolved significantly in the past six years, driven by a number of factors: COVID-19 pandemic slowdowns, fluctuating federal fund rates, and an increasingly aggressive regulatory environment under the Federal Trade Commission (FTC). In this article we will explore these various factors and consider how non-acquisitive strategic partnerships can be a viable alternative to achieve growth and innovation.


Evolution of the Biopharma M&A Market

While M&A deal volume and value was healthy in 2018 and 2019, the pandemic placed a major downward pressure contributing to a $100 billion+ decrease in transactions and a 46% drop in deal volume (Figure 1). Interestingly, the risk appetite for preclinical to Phase II assets rose from 39% in 2019 to a peak of 45% in 2020 and 2021 (Figure 2), which coincided with the Fed’s rate cuts to 0% (8). These low rates, implemented and sustained by the Fed to protect the economy, likely enabled companies to finance M&A activities via low-interest debt, reducing their risk aversion and briefly facilitating the pursuit of high-risk assets with moderate valuations. However, the Fed’s subsequent rate hikes likely led to the risk-off sentiment in the M&A market, as observed by the declining interest in early-stage targets to a five-year low of 26% in 2023 (Figure 2). This shift occurred as rates began to rise in 2022 (9), which presumably increased the cost of capital and reduced cash flow due to higher interest payments on existing debt.

Figure 1. Total biopharma M&A deal volume and value by year (1-6).

Figure 2. The percentage share of assets in different product phases at the time an M&A transaction is announced (7).

Among therapeutic areas, oncology deal volume remained dominant from 2018 to 2020, declining in 2021, and then regained ground through 2023 (Figure 3). With a growing industry interest in CAR-T therapies, Bristol-Myers Squib’s (BMS) seized its opportunity to gain a competitive foothold through its acquisition of Celgene for $74 billion in 2019 (10). This megadeal single-handedly boosted the total oncology deal valuations for 2019 (Figure 4). Pfizer’s $43 billion strategic acquisition of Seagen in 2023 was similarly oncology-focused, however, this target’s portfolio was flush with antibody-drug conjugates (11). Other notably large therapeutic deals included Jazz Pharmaceuticals’ $7.5 billion acquisition of GW Pharmaceuticals in 2021, which expanded their portfolio of neurological assets (12), and Amgen’s $28 billion acquisition of Horizon Therapeutics in 2022, providing them with a strengthened immunological portfolio (13). Despite M&A market contraction, these deals indicate that big pharma is still willing to pay a high sticker price for innovative mechanisms of action in key therapeutic areas. However, changes occurring at the FTC contributed to the development of the muted biopharma M&A market.

Figure 3. Deal volume by therapeutic area for those deals worth ≥$1 billion by target focus (1-6).

Figure 4. Deal value by therapeutic area for those deals worth ≥$1 billion by target focus (1-6).

FTC Interventions in M&A

Lina Khan’s nomination to chair of the FTC in 2021 marked an inflection point for biopharma M&A. Before her tenure, FTC activity in biopharma M&A was modest: M&A transactions considered problematic would receive requests to divest specific assets or therapeutic areas to prevent monopolies. This lighter touch meant deals such as BMS’s $74 billion acquisition of Celgene (14) or AbbVie’s $63 billion acquisition of Allergan could still proceed (15).

Under Khan’s leadership, there has been a clear willingness to outright block biopharma M&A transactions and change related legislation. While the FTC’s lawsuit may have failed to stop Amgen’s $28 billion acquisition of Horizon Therapeutics, it nonetheless signaled an increased appetite to intervene forcefully. Further, the commission has also sought to overhaul M&A-related legislation, namely the Hart-Scott-Rodina (HSR) Act of 1976 (16, 17). Among the proposed changes all transactions will be required to provide more extensive disclosers prior to announcements (18). In addition, direct filing costs due to the changes are estimated to potentially rise to $2 billion dollars as well as significantly increase time to file (19, 20).

Between these aggressive lawsuits and proposals to overhaul legislation, biopharma companies will be disincentivized to execute M&A deals, which is already a costly and time-intensive process.


The Case for Strategic Partnerships

Strategic partnerships – which would not be subject to the stricter filing rules proposed by the FTC – offer an alternative path to pipeline diversification and may represent a significantly smaller (upfront) financial commitment.  With a high cost of capital and an increasingly hawkish FTC, partnership deals unsurprisingly have continued to grow in total annual value despite headwinds (Figure 5). Like other deal structures, strategic partnerships to date have been dominated by an oncology focus, with immunology, and neurology following (Figure 6). The modest but steady increase in oncology strategic partnership deals contrasts with the volatility observed with other types for this therapeutic area. This sustained appetite in oncology indicates biopharma companies focused on this therapeutic area are likely to consider this deal structure as an attractive option.

With a high cost of capital and an increasingly hawkish FTC, partnership deals unsurprisingly have continued to grow in total annual value despite headwinds.

Figure 5. The total deal volume and value of deals for biopharma partnerships (1-6).

Figure 6. Share of deal volume by therapeutic area for those deals worth ≥$1 billion by target focus (1-6).

In addition to its macroeconomic favorability, this deal structure also offers some operational and business development advantages.  Flexible deal terms mean that partners can capitalize on both parties’ strengths: for example, one’s drug development efficiency is complimented by the other’s commercial excellence.  Longitudinal relationships mean that a potential target becomes well understood – operationally and scientifically – and the partnership can serve as an extended diligence period for M&A.  Should M&A headwinds prevail, this ability to longitudinally assess risk clarifies investment decision-making.

The View from the Crow’s Nest

As M&A transactions pivot further away from early-stage assets and face tougher financial and regulatory pressures, biopharma companies have generally turned toward de-risked assets and smaller deals (with a few notable exceptions). Given the current landscape, small biopharma companies with coveted oncology, neurology, and immunology portfolios are likely to thrive. Meanwhile, big pharma will need to continue exercising caution in their investment strategy, closely monitor the M&A regulatory changes taking place, and be willing to engage with regulators early in the process. This proactive approach will better ensure successful outcomes once a more favorable M&A backdrop eventually develops. Until then, strategic partnerships offer both parties a viable means to achieve growth and innovation.

Of course, there are additional paths a biopharma company can consider such as out-licensing of products, discovery agreements, and commercial partnerships. Ensuring the right type of deal structure is formed will entirely depend on the unique circumstances of each company and the market dynamics that exist and are likely to develop.

If you would like to learn more about how we help companies navigate the ever-changing waters of M&A, licensing, and strategic partnerships, please reach out. We’d be happy to help you chart your course.

If you are interested in learning more, get in touch at 

Spinnaker offers true partnership and comprehensive guidance to help leaders navigate the complexities of the Life Sciences industry and chart a path to success. From early-stage market assessment through commercial execution and ongoing lifecycle management, we deliver tailored solutions to ensure optimized practicable results.


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5.      Giglio, Patricia, and Amanda Micklus. “Biopharma dealmaking in 2022.” Nature reviews. Drug discovery vol. 22,2 (2023): 92-93. doi:10.1038/d41573-023-00012-0.

6.      Giglio, Patricia, and Amanda Micklus. “Biopharma dealmaking in 2023.” Nature reviews. Drug discovery vol. 23,2 (2024): 101-102. doi:10.1038/d41573-024-00012-8.

7.      Gores, Markus, and William Harries. "Biopharma M&A Outlook for 2024: Incremental Catalysts Point to Continued Uptick of M&A Momentum." IQVIA Blog, Jan. 2024,

8.      Federal Reserve Board. “Reserve Requirements.” Federal Reserve Board, 2023,

9.      Federal Reserve Board. "Open Market Operations." Federal Reserve Board, 2023,

10.  Bristol-Myers Squibb Company. Form 8-K Current Report. U.S. Securities and Exchange Commission, 3 Jan. 2019,

11.  Pfizer Inc. Form 8-K Current Report. U.S. Securities and Exchange Commission, 9 Mar. 2023,

12.  Jazz Pharmaceuticals PLC. Form 8-K Current Report. U.S. Securities and Exchange Commission, 3 Feb. 2021,

13.  Amgen Inc. Form 8-K Current Report. U.S. Securities and Exchange Commission, 12 Dec. 2022,

14.  Federal Trade Commission. "FTC Requires Bristol-Myers Squibb Company and Celgene Corporation to Divest Psoriasis Drug Otezla as Condition of Merger." FTC Press Releases, 15 Nov. 2019,

15.  Federal Trade Commission. "AbbVie Inc./Allergan PLC (Matter)." FTC Cases and Proceedings,

16.  Federal Trade Commission. "Hart-Scott-Rodino Antitrust Improvements Act of 1976." FTC Statutes,

17.  Federal Trade Commission. "Statement of Chair Khan, Joined by Commissioners Slaughter and Bedoya, on the HSR Form and Rules." FTC, 27 June 2023,

18.  Federal Trade Commission. "FTC and DOJ Propose Changes to HSR Form for More Effective and Efficient Merger Review." FTC Press Releases, 27 June 2023,

19.  Kothari, S.P. "The US Antitrust Agencies’ NPRM re Additional Information Requirements for HSR Filings." Report of Professor S.P. Kothari, 26 Sept. 2023,

20.  Federal Trade Commission. "Proposed Amendments to HSR Rules and Form Instructions, 2023." FTC, 2023,


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