Mergers and acquisitions (M&A) play an important role in an industry’s growth. M&A growth for biotech deals were strong in 2017 with $50 billion spent on such partnerships. Analysts are predicting explosive growth for biotech mergers in 2018 since deals for more than $25 billion have already been made with only three months into 2018. This is half of last year’s value with the bulk of the year remaining to achieve more growth.
The recent deals made in 2018 include the acquisition of Juno Therapeutics for $9 billion by Celgene. Another pharmaceutical giant, Sanofi, is acquiring Bioverativ for $11.6 billion and Ablynx for $4.8 billion. More deals are expected to follow as biotech companies continue to develop innovative products, with some analysts predicting that biotech M&A deals will reach an all-time high in 2018.
Companies often merge to be able to create more effective and ground-breaking products. This is exactly what is happening with pharmaceutical and biotechnology companies. Large-cap pharmaceutical companies are acquiring smaller biopharma and biotech firms to be able to use their research and technologies to achieve growth in a mature market.
The Nasdaq Biotechnology Index was also up 21.63% percent in 2017. Analysts expect this growth to continue in 2018 with more biotech diagnostic tools and biopharmaceutical products on their way to get FDA approvals and disrupt the market. As more biotech companies develop innovative medicines for hard-to-treat diseases such as cancer and diabetes, more M&A deals are anticipated from larger pharmaceutical companies such as Gilead, Amgen, Merck, and Pfizer so that they can expand their portfolios.