Dealmaking on the Rise?

High Angle Shot of a Working Desk of an Successful Person in Office with Cityscape Window View. | Image credit: © Gorodenkoff - stock.adobe.com

In January each year, global healthcare and life sciences industry leaders, investors, and government officials come together in San Francisco, Calif., at the J.P. Morgan Healthcare Conference to discuss market trends that are expected to shape the industry in the near future. For 2025, this annual barometer of the healthcare sector has left industry with a reasonably positive outlook on the potential for M&A activity.

Since the bumper year of 2019, the bio/pharma industry has experienced a slower pace in M&A activity. While there have been some high value deals, such as Pfizer’s acquisition of Seagen in 2023—valued at approximately $43 billion (1)—the overall value and volume of deals have been lower than expected.

According to the EY 2025 Firepower analysis—which found that there was a decrease in deal value of 41% in 2024 compared with 2023—2024 may be considered a “reset year” when bio/pharma companies were turning away from larger deals and looking at smaller strategic ones (2). In 2025, the EY analysts expect a continued focus on smaller and smarter deals (2), with the emerging field of artificial intelligence (AI) proving a popular opportunity, as was demonstrated by NVIDIA’s announcement in San Francisco (3) and discussed in depth in this issue’s cover story on pages 10–13 (4).

Customarily, industry sees a flurry of deals announced during the J.P. Morgan Healthcare Conference, and 2025 proved no different. The biggest deal, announced on day one of the conference, was Johnson & Johnson’s proposed acquisition of Intra-Cellular Therapies for $14.6 billion (5), marking the largest seen at the conference in years.

While unlikely to hit the heights of years gone by, there is an abundance of ‘dry powder’ private equity funding potentially available (6). So, if the conditions prove optimal, the right opportunities are focused on, and policymaking shakes out in a beneficial way, 2025 could well be a prosperous year for deals for bio/pharma.

References

Pfizer. Pfizer Completes Acquisition of Seagen. Press Release, Dec. 14, 2023.

EY. EY Firepower Report: Life Sciences Dealmaking—Trends in 2025. Featured Thinking, EY.com, Jan. 13, 2025.

Hollan, M. NVIDIA Announces Pharma Partnerships to Expand AI. Pharm. Exec., Jan. 15, 2025.

Thomas, F. Expanding Pharma’s Horizons Through AI and Acquisitions. Pharm. Tech. 49 (1) 10–13.

J&J. Johnson & Johnson Strengthens Neuroscience Leadership with Acquisition of Intra-Cellular Therapies, Inc. Press Release, Jan. 13, 2025.

Whaley, E.; Ward Woffenden, T.; Mahoney Jr., P.M. At JP Morgan Conference, Health Care Investors Gear Up for Transformative Legal Developments. Reuters, Jan. 6, 2025.

About the author

Mike Hennessy Jr is President and CEO of MJH Life Sciences®.

Article details

Pharmaceutical Technology®
Vol. 49, No. 1
January/February 2025
Page: 8

Citation

When referring to this article, please cite it as Hennessy, M. Dealmaking on the Rise? Pharmaceutical Technology 2025 49 (1).