Pharmaceutical Industry M&A Activity Heats Up as Big Players Eye Strategic Acquisitions

In a significant shift for the pharmaceutical industry, major companies are signaling a renewed focus on mergers and acquisitions (M&A) as they look to bolster their pipelines and drive growth. This surge in deal-making interest comes as the sector grapples with ongoing challenges, including potential drug pricing pressures and the lingering effects of global trade tensions.

Novartis Leads the Charge with $1.7 Billion Regulus Therapeutics Acquisition

Swiss pharmaceutical giant Novartis has made a bold move, announcing a $1.7 billion offer to acquire oligonucleotide biotech Regulus Therapeutics. This deal, revealed just hours after Leerink Partners predicted an uptick in M&A activity, underscores the industry's appetite for strategic acquisitions. Novartis executives have expressed interest in pursuing further bolt-on M&A, business development, and licensing deals to enhance their portfolio.

The Novartis-Regulus deal follows closely on the heels of German company Merck KGaA's $3.9 billion acquisition of SpringWorks Therapeutics, indicating a broader trend of increased M&A activity in the sector.

Big Pharma Signals Readiness for Strategic Deals

Several major pharmaceutical companies have indicated their readiness to engage in M&A activities during recent earnings calls:

• Pfizer CEO Albert Bourla emphasized the importance of being strategic and disciplined in the current market, stating, "You need to sell when prices are high and buy when prices are low." The company is actively seeking deals in the $10 billion to $15 billion range to replace discontinued assets and strengthen its cardiometabolic pipeline.

• Bristol Myers Squibb CEO Chris Boerner declared business development as their "top capital allocation priority," highlighting opportunities in both partnerships and acquisitions. The company has implemented a cost realignment program, saving $1.5 billion and reducing headcount to facilitate external opportunities.

• Merck CEO Robert Davis reaffirmed that business development remains a "top priority" despite the complex macro environment. The company is committed to pursuing deals aggressively.

• GSK CEO Emma Walmsley noted the company's recent $1 billion ADC deal with Shanghai-based DualityBio, emphasizing opportunities in China while promising a "cautious and disciplined" approach to future deals.

Industry Optimism Tempered by Economic Headwinds

While the renewed interest in M&A is a positive sign for the biopharma ecosystem, companies remain mindful of potential challenges. The threat of tariffs and possible new drug pricing pressures continue to influence strategic decisions.

Roche CEO Thomas Schinecker acknowledged that tariffs could impact business development plans. Similarly, GSK's Walmsley and Merck's Davis noted the complexity added by current economic uncertainties but maintained their commitment to pursuing valuable opportunities.

Despite these challenges, recent data from Pitchbook indicates a recovery in the M&A landscape. After a 26% decline in deal count momentum over the past 12 months, the first quarter of 2025 saw a 63% rise in momentum within the biotech and pharma sectors. Valuations, which had fallen by 143% over 12 months, have rebounded by 107% in the last quarter.

As the pharmaceutical industry navigates this complex landscape, the coming months are likely to see continued M&A activity as companies seek to capitalize on strategic opportunities and drive long-term growth.