Biotech Bulletin: Acquisitions Continue to Heat Up
The biotechnology sector is witnessing a resurgence in mergers and acquisitions (M&A), bringing a wave of optimism for venture capitalists as 2024 approaches. This uptick is seen as a beacon of hope for an industry that experienced a slump in investments over the past two years.
Positive signs emerged as 2023 came to a close, with three of the biggest names in biopharma making strategic acquisitions in oncology, autoimmune diseases, radiopharmaceuticals and point-of-care diagnostics. AstraZeneca ($AZN) entered an acquisition agreement, with a total upfront consideration of $1 billion, with Gracell Biotechnologies ($GRCL). Gracell’s investigational cell therapy GC012F, is a dual-targeting autologous CAR-T therapy being developed for multiple myeloma, blood cancers and autoimmune conditions such as systemic lupus erythematosus.
Bristol Myers Squibb ($BMY) acquired Rayzebio for approximately $4.1 billion to further diversify its oncology portfolio and add a premier radiopharmaceutical platform to its oncology franchise. In the last significant deal of the year, Roche ($RHHBY) announced it had acquired certain LumiraDx companies focused on point-of-care diagnostics for $295 million at closing along with up to $55 million in reimbursements.
Recent Deals Spark Optimism
The landscape of biotech M&A has been vibrant, especially following a busy fourth quarter. Key acquisitions include drugmaker GSK’s ($GSK) agreement to purchase Aiolos Bio for up to $1.4 billion, primarily for its promising asthma drug. Similarly, Novartis ($NVS) announced its intention to acquire Calypso Biotech for as much as $425 million, a move driven by Calypso’s advancements in celiac disease and eosinophilic esophagitis treatments.
Earlier in January, Boston Scientific Corporation ($BSX) agreed to acquire Axonics, Inc. ($AXNX), a medical technology company developing differentiated devices to treat urinary and bowel dysfunction in a deal valued at approximately $3.7 billion. In a nod to an increasing focus on digital solutions, GE Healthcare ($GEHC) announced it would acquire MIM Software, which provides AI-enabled image analysis and workflow tools across multiple care areas, including oncology, urology, neurology, and cardiology. The financial terms of the deal were not publicly disclosed.
Potential Acquisition Targets
Guggenheim analyst Michael Schmidt, in a recent Barron’s article, highlighted several biotech firms as potential acquisition targets. These companies, predominantly involved in cancer treatment, show promise for being attractive additions to pharmaceutical companies with existing cancer-drug franchises.
Immunocore ($IMCR), known for its FDA-approved melanoma treatment Kimmtrak, is viewed as a strong candidate for acquisition. Syndax Pharmaceuticals ($SNDX), which has seen its stock nearly double following successful clinical trials, is another top pick. Its leukemia treatment and transplant complication reduction drug are awaiting FDA approval. Blueprint Medicines ($BPMC), with its approved drug Ayvakit targeting specific cancer types, also emerges as a potential target, especially with no near-term competition in sight.
