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Written by
Kristoffer Danielsson
2024–2025 Biopharma Deal Trends: Executive Insight Series
This series of articles provides a comprehensive analysis of the latest trends in biopharma dealmaking, with a focus on oncology, immunology, and immuno-oncology. Leveraging data from 2023 to 2024 and recent high-profile deals, the series offers strategic insights for C-suite executives. Each article explores key themes, backed by data-driven insights and illustrative examples, concluding with succinct, actionable takeaways.
Early-Stage Targets Are Hot: The Strategic Shift Toward Preclinical Acquisitions
In 2024, the biopharma industry saw a decisive pivot toward acquiring early-stage R&D assets, reflecting a strategic shift from mega-deals to targeted, bolt-on acquisitions. After a decline in large-scale M&A, major pharmaceutical companies increasingly focused on smaller acquisitions aimed at replenishing pipelines and mitigating risks associated with patent cliffs. Late-stage deal value dropped significantly, with only 8% of M&A value in 2024 coming from Phase III or commercial assets, compared to 56% in 2023. In contrast, preclinical and Phase I/II assets accounted for nearly 50% of deal value, up from a historical average of 19%.
Key Deals and Strategic Implications
Vertex’s $4.9 billion acquisition of Alpine Immune, a company developing a Phase II autoimmune drug, marked the largest early-stage M&A deal of 2024. Similarly, Gilead’s $4.3 billion purchase of CymaBay, targeting a Phase III NASH asset, and J&J’s $13.1 billion investment in Shockwave (a medical device company) highlight a shift toward mid-sized, strategically focused acquisitions. These transactions demonstrate a growing willingness to invest in assets earlier in the development process, despite associated risks.
Licensing Deals Surpass M&A in Value
With M&A activity dwindling, biopharma companies increasingly turned to licensing deals as a primary strategy for securing innovation. In 2024, licensing partnerships accounted for approximately $170 billion, significantly outpacing the $48 billion spent on M&A—a 68% drop from 2023. This shift reflects a preference for flexible capital deployment and risk-sharing. Notably, the U.S. led licensing deals with $7 billion in upfront payments, followed by EMEA with $3.9 billion and APAC with $3 billion.
Major Licensing Agreements
High-profile deals included Novartis’ $185 million upfront investment for cardiovascular programs from Shanghai Argo, and Merck’s $588 million agreement with LaNova Medicines for a PD-1/VEGF bispecific antibody. The trend toward licensing rather than acquisition signals an evolving strategic mindset—one that prioritizes access to innovation without the full financial burden of outright ownership.
AI and Precision Medicine: Key Drivers of Strategic Deals
In 2024, the integration of AI and precision medicine into R&D strategies became more pronounced. Pharma companies increasingly pursued partnerships that leverage AI for drug discovery, with 89 AI-focused deals worth $11.1 billion recorded during the year. Noteworthy collaborations include Bristol-Myers Squibb’s deals with VantAI and AI Proteins, aimed at advancing AI-driven therapeutic platforms.
Precision medicine remained a focal point, with deals targeting advanced immunotherapies and metabolic disorders. Merck’s $588 million upfront payment for LaNova’s PD-1/VEGF bispecific antibody exemplifies the value placed on precision-engineered biologics. Additionally, BioNTech’s $170 million investment in DualityBio’s ADC cancer therapies underscores the drive to develop targeted oncology solutions.
Dual-Track IPO/M&A Strategies Gain Momentum
Biotech companies increasingly adopted dual-track strategies in 2024, balancing IPO preparations with acquisition negotiations. This approach gained traction amid volatile markets, offering companies leverage when negotiating deal terms. Notably, biotech M&A involving private targets increased by 17% year-over-year. Firms prepared for public listings while simultaneously engaging in acquisition discussions, maximizing flexibility and valuation.
Therapeutic Hotspots: GLP-1, Immunology, and IO Drive Deals
The surge in demand for GLP-1 receptor agonists and advances in immuno-oncology have catalyzed significant deal activity. Notably, Novo Nordisk’s $16.5 billion acquisition of Catalent secured critical manufacturing capacity for GLP-1 therapies, while Roche’s $2.7 billion acquisition of Carmot focused on GLP-1/GIP agonists. Additionally, oncology deals, particularly those involving ADCs and bispecific antibodies, remain highly competitive.
Strengthening Western-Asian Partnerships
Partnerships between Western and Asian biotech companies flourished in 2024, driven by increased licensing value and the strategic importance of accessing innovative drug candidates. Noteworthy deals include Roche’s partnership with Innovent and BioNTech’s acquisition of Biotheus, both China-based companies. Western firms are increasingly recognizing the value of collaborating with Asian innovators, despite geopolitical complexities.
Navigating Regulatory and Political Dynamics
Regulatory and political factors continue to shape the biopharma deal landscape. Heightened antitrust scrutiny and evolving FDA standards pose challenges, while geopolitical shifts, such as the pending U.S. Biosecure Act, create additional layers of complexity. Companies are adapting by strategically balancing risk and opportunity, ensuring compliance while pursuing growth.
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Author: Kristoffer Danielsson
Founder & CEO
Jarlen Capital
Email: Kristoffer@jarlencapital.com
