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Research:
Research
19 Mar 2025
5 minute read

Current Pharma M&A Trends

M&A strategies

Two main goals drive most of pharma M&A deals: (a) maintaining a hold on the market while amplifying the current performance, and (b) embracing innovative and disruptive technologies to get ahead of the competition, instead of reinventing the wheel. Fulfilling the first goal calls for a defensive M&A strategy, while chasing the second one needs an offensive strategy.

The followers of defensive strategy prioritise acquisition of assets to fill gaps in the core portfolio, capture synergy for completed transactions, and restore “the balance” in financial statements by restructuring portfolios and divesting non-core assets. Those embracing offensive strategy prefer acquiring disruptive and innovative assets and competitors to enter new-growth segments, accelerating digital transformation, and collaborating with peers.

Based on the findings of “CFO Survey 2021”, the table below shows M&A trends across different sectors. More than half of the CFOs from the LSHC sector give priority to M&A activity – the data indicates an almost equal mix of defensive (55%) and offensive (45%) strategies.

 

Underpinning our annual report Measuring the return from pharmaceutical innovation series is a bespoke Deloitte analytical model that calculates the internal rate of return (IRR) that selected biopharma companies might expect to achieve from assets in their late-stage pipelines. We use this analysis of the IRR to act as a proxy measure of the industry’s ability to balance initial capital outlay on R&D with the cash inflows that the companies are projected to receive from their investment in innovation. The data we use to populate the model are reported financials from publicly available, audited annual reports and sales forecasts probability of regulatory success (PTRS) and pipeline composition data provided by Evaluate Pharma.

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