The Future of Biopharma: Top M&A Deals Leading the Change.

2022 was a difficult year for M&A in the field of medicine and life sciences. 

Both the value and volume of business are at multi-year lows due to general macroeconomic headwinds and broad market disruptions. In 2023, we expect M&A to be more similar to previous years, with a total business value of $225–275 billion across all subsectors. 

The background for an active year is the abundant cash reserves of companies, the need to continue investing to correct medium-term deficits, and the cancellation of the value of biotechnology.
As the general economic outlook stabilizes somewhat, the need for investment to achieve change is unparalleled. Achieving scale is imperative to creating shareholder value. We still expect deals in the $5–15 billion range to be the market’s sweet spot, but we see the potential for larger deals in the second half of the year. Once the results of the midterm elections are known and the impact of the Inflation Reduction Act on prices is better understood, much of the uncertainty plaguing the industry in 2022 should be in the rearview mirror.

m and a life science deals
Size of valuations

Promising science that addresses unmet medical needs is incredibly valuable, but significant competition for differentiated and risk-free assets continues. A clear and flexible approach to evaluating options is therefore crucial to achieving the desired results. Thinking big is essential to success because companies must create a brand to work with and a new playbook to meet the market’s insatiable demand for shareholder returns. Structured contracts, new and creative approaches to R&D funding, and portfolio revaluations leading to sales are also important themes in the M&A toolkit in 2023.


The medical technology sector continues to face headwinds, with contract values expected to decline significantly in 2022 and capital market development uneven. However, we remain optimistic about the industry’s outlook for 2023. The recent value shift could provide opportunities for the company to exceed investor expectations and create value for shareholders by focusing on various growth opportunities such as robotic surgery, structural heart disease, and combination therapy. Balance sheets and cash flows across the industry remain strong, and we believe M&A remains a priority for capital allocation.
In the service sector, M&A levels will continue to be good in 2023. Achieving scale is critical in various industries, such as differentiated contract development management organizations (CDMOs) and contract research organizations (CROs), and M&A is the right way to do it. Finally, private equity (PE) is expected to continue to be a driving force in this sector. In 2023, especially in the second half, when the debt market opens up more formally, the theme of 2023 will also be capital investments by poorly performing state-owned enterprises in market areas benefiting from secular growth trends. PE dry powder has never been bigger and has long been a favorite of the service industry.

Top PLS deals 2022

Although 2022 was difficult in terms of funding, several companies reached their deadlines either by completing Phase II trials, receiving regulatory approval, or demonstrating a positive proof of concept.

Provention owns TZIELD, the first disease-modifying drug approved by the FDA to delay stage 3 type 1 diabetes. 
Another indication that fits this definition is nonalcoholic steatohepatitis (NASH), Bardon said. Madrigal Pharmaceuticals announced Monday that it received long-awaited positive results from the Phase III MAESTRO-NASH biopsy study of the oral thyroid hormone receptor (THR) beta-selective agonist resmetirome.
A pair of psychiatric drugs were also on Bardon’s list of hot M&A targets: Karuna Therapeutics’ KarXT, which may be the first treatment for negative symptoms in schizophrenia, and an oral N-methyl-D-aspartate receptor antagonist from Axsome Therapeutics, which recently showed positive data on Alzheimer’s-related agitation. 

In the IgA nephropathy condition, Bardon singled out Chinook Therapeutics and Calliditas Therapeutics.
For orphan drugs, “the two most exciting companies are Sarepta [for Duchenne muscular dystrophy] and Reata Pharmaceuticals for Friedreich’s ataxia,” he said, adding that both Sarepta’s SRP-9001 and Reata’s omaveloxolone “can really change the course of patients’ diseases.”
BioSpace’s George Budwell and Heather McKenzie offer their top M&A picks for 2023.

Heather McKenzie 

Karuna Therapeutics 

Karuna aligns with one of PwC’s key focuses: KarXT’s apparent effectiveness in treating the negative symptoms of schizophrenia could put the biotech firmly in the lead in this challenging space. According to Voyager CEO Al Sandrock,Neurotherapeutics is also gaining momentum as a therapeutic space.
KarXT approval would also give potential buyers access to a uniquely important patient population. Although schizophrenia is not very common—the World Health Organization estimates that 20 million people worldwide suffer from it—the costs to the global health system are significant. A 2016 study published in The Lancet ranked schizophrenia among the 15 leading causes of disability in the world.

Eli Lilly could be Karuna’s challenger. For one thing, it might want its medicine back now that Karuna seems to have made it work. KarXT was once abandoned by Lilly due to tolerability issues, and Karuna is mentored by former Lilly executives. Current CEO Steve Paul, M.D., is the former Chief Science and Technology Officer and President of Lilly Research Laboratories.
Biogen and Jazz Pharmaceuticals could also be interested in Karuna.
The company can still plan to be on its own, at least for the time being. Earlier this month, Karuna announced that Bill Meury would succeed Paul on January 3. 

Since the FDA may not submit an application for KarXT until mid-2023, potential suitors may be left waiting for a final decision.

Reata Pharmaceuticals 

The FDA granted priority review for Reata’s omaveloxolone in May for Friedreich’s ataxia. There are currently no approved treatments in the United States for FA, a progressive, life-shortening neuromuscular disease.
The FDA originally set a PDUFA date of November 30, but later extended it to February 28, 2023.
In addition to omaveloxone, Reata also has programs for CKD, including diabetic CKD, CKD with Alport syndrome, and CKD with polycystic kidney disease (PKD).
CKD is an attractive therapeutic condition with a large patient population. Its frequency in the United States is about 13 percent, and studies have shown that this percentage increases in patients with type 2 diabetes and cardiovascular disease.

Potential buyers include:

At AstraZeneca, one of its main focuses is cardiovascular, renal, and metabolic (CVRM).
Novo Nordisk has a major focus on both type 1 and type 2 diabetes and cardiovascular disease.
Sanofi has a history with Parkinson’s disease.The French drug company halted the development of venglustat for autosomal dominant PKD in 2021 after a pivotal phase II/III trial failed to meet futility criteria.


 Boston-based Amylyx received one of the largest FDA approvals of 2022 when the regulator AMX0035 (Relyvrio) received the green light in ALS in September.
Amylyx has not received much attention as a potential MandA target, but the company could be a “dark horse” target for the following reasons:
ALS is a neurodegenerative therapeutic target for which Relyvrio is one of three approved drugs.
CEO Justin Klee told BioSpace in October that Amylyx wanted to study Relyvrio in other neurodegenerative diseases. There are few things that attract a potential buyer like a tube in an approved product.
AMX0035, which is also being studied for both Alzheimer’s disease and Wolfram syndrome, is Amylyx’s only investigational product, likely indicating a need to raise more money for growth. Led by first-time founders,
Amylyx could use the marketing expertise of Biogen or Novartis. Perhaps even Roche or Pfizer.

George Budwell 

Alnylam Pharmaceuticals 

RNA interference (RNAi) pioneer Alnylam Pharmaceuticals, with a market capitalization of nearly $30 billion at the time of writing, could be the biggest pharma acquisition of 2023. The gene-silencing drugmaker stands out as a prime takeover candidate primarily because of its unique and versatile RNAi therapeutic platform.

Alnylam currently has four FDA-approved treatments:

Onpattro for polyneuropathy in hereditary ATTR amyloidosis Givlaar for acute hepatic porphyria- Oxlumo in all age groups for primary hyperoxaluria type 1.The pipeline also includes several valuable candidates. Onpattro for ATTR amyloidosis, phytosiran for hemophilia (in collaboration with Sanofi), and cemdisira for IgA nephropathy
The RNAi drugmaker’s mid-stage pipeline also targets a NASH, type 2 diabetes and hypertension.

Madrigal Pharmaceuticals 

After the late-stage NASH win mentioned above, Madrigal may be the industry’s most obvious buyout candidate.
Notably, the drug’s beta-selective thyroid hormone agonist, resmetirom, hit both its primary endpoint and key secondary endpoints in the Phase III MAESTRO-NASH biopsy study in December.
What’s the big deal? NASH, an advanced form of fatty liver disease, has no FDA-approved treatment. In addition, the condition is currently the fastest-growing reason for liver transplants in the United States. Therefore, 
Wall Street believes that a safe and effective NASH drug could generate more than $8 billion in annual sales. Overall, the NASH treatment market is expected to grow to $35 billion annually by the end of the decade.
Madrigal, with a current market cap of $4.95 billion, may be too cheap to outbid the industry’s biggest players in liver disease, such as Merck, Pfizer, and Gilead Sciences.

Corpradar is a next-gen digital IR 4.0 corporate media house that combines the power of technology with human capital to bring decisive and insight-driven content on key business affairs. In an absolute sense, we create a space for leading business houses and visionary corporate leaders to chime in with their opinions and thoughts on relevant industry-specific matters that provide a detailed expert perspective for our followers.