IQVIA – Pharma Deals Half-Year Review of 2023

The life sciences sector experienced a slowdown in deal activity in the first half of 2023 due to the uncertain economic environment, resulting in fewer transactions being made. M&A activity remained subdued, with fluctuating valuations and increased antitrust scrutiny discouraging potential buyers. However, despite the low deal volume, the total spending on M&A reached $100.5 billion, with the four largest deals accounting for 66% of that amount. In the first quarter of 2023, there was a significant mega-deal announcement, marking the first of its kind since 2019. Big pharma companies such as Merck & Co., Astellas, and Novartis cautiously re-entered the M&A market in the second quarter of 2023, each securing deals worth over $3 billion. Merck & Co. emerged as the top dealmaker in the first half of 2023, particularly due to its collaboration focused on its lead asset, Keytruda®. However, overall transaction volume for leading big pharma companies decreased compared to the previous year. Licensing deal flow also declined in the first half of 2023, as licensees became more selective in the types of assets they wished to invest in. Despite the decrease in aggregate deal spending, upfront payments for licensing deals increased, primarily driven by deals involving later stage assets and rising asset valuations. Collaborative R&D activity also decreased, as many pharma giants narrowed their focus on key growth opportunities. Oncology remained the most popular therapy area for dealmaking, driven by the demand for innovative multi-targeted approaches.