Megadeals continued amid sluggish investments and M&A in 2024

Despite record amounts of dry powder ready to deploy, investors were slow to pounce on opportunities relative to 2021, preferring to funnel their cash into fewer, oversized rounds. And big pharma acquirers were reluctant to take advantage of depressed valuations in volatile public markets.

"Many people are deferring decisions due to the lack of data points and the pending new US administration", Ali Pashazadeh, CEO of the financial advisor Treehill Partners, told BioXconomy. While it’s difficult to predict the impact of Trump’s incoming government on the biopharma industry, “every part of our drug development landscape and reimbursement and pricing is going to be under scrutiny”, he added.

Amid the subdued investment scene, one of 2024’s landmark biopharma deals was the $16.5 billion takeover of the contract development and manufacturing organization (CDMO) Catalent by Novo Holdings, the Novo Nordisk Foundation’s dedicated asset manager. In an industry that has long been focused on novel biology, the obesity treatment extraordinaire’s bold move highlighted how seriously big companies are taking biopharma manufacturing.

Immunology, cardiovascular disease and oncology were the themes of other standout megadeals this year, including Johnson & Johnson’s $13.1 billion acquisition of Shockwave Medical, the $4.9 billion buyout of Alpine Immune Sciences in Vertex Pharmaceuticals’ largest-ever M&A deal; and AstraZeneca snapping up Fusion Pharmaceuticals for $2.4 billion.

“Radiopharmaceuticals is a booming field and Fusion’s next-generation radioconjugates will give AstraZeneca a solid footprint in this space” and access to supply of the therapeutic radioisotope actinium-225, said Fady Riad, CEO of the consulting firm Centurion Life Sciences.

Meanwhile, the launch of the US startup Kailera Therapeutics with a “remarkable” $400 million Series A round hammered home “growing excitement in the obesity market”, remarked Antoine Papiernik, chairman and managing partner of the venture capital (VC) firm Sofinnova Partners. He added that the deal, based on four assets from China’s Jiangsu Hengrui Pharmaceuticals, reflected a trend of licensing rights to Chinese drug candidates in territories outside of China.

The obesity field, swelled by the success of Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, suffered its own setbacks, however. The recent discontinuation of BioAge’s combination obesity therapy over safety concerns saw the firm reeling from an 80% drop in share price, and underscored the risks of advancing early-stage assets into combined trials.

Other headwinds remain as we move into next year. The underperformance of public markets has forced biopharma players to extend their cash runways with layoffs and streamlined pipelines. And interest in cell and gene therapies has cooled as developers grapple with limitations in delivery, manufacturing and tissue targeting obstacles, Papiernik said.

Despite these challenges, however, Miguel Forte, CEO of the cell therapy company Kiji Therapeutics, sees the industry building strength.

“We saw a resetting of the industry in 2024”, Forte said. “I think we're in a better environment to continue the path of steady growth”.