After a sluggish 2023, the slowdown in deal activity in the life sciences sector continued in 2024 as persistent macroeconomic headwinds discouraged companies from signing M&A, licensing and collaborative R&D deals over the course of the year. M&A activity continued its decline from 2023 to 2024 as high interest rates and regulatory scrutiny kept deal volumes down. In parallel, aggregate spending on M&A fell 35% to US$128 B, with no therapeutic biopharma acquisitions exceeding the US$5 B mark.

Licensing deal flow for life science companies remained dampened in 2024 as licensees continued to be selective in the types of assets they in-licensed as they streamlined their portfolios. Similar to 2023, clinical stage deals accounted for a greater proportion of therapeutic licensing activity in 2024 as risk averse companies looked to invest in products further down the clinical development pathway. While the aggregate licensing deal spend was somewhat maintained from 2023 to 2024, average and median deal values increased thanks to risk-mitigating deal structures involving high option-based and milestone payments. After soaring in 2023, average upfront payments decreased by 38% in 2024, however this still exceeded the average upfronts seen in 2020 and 2021 during the COVID-19 pandemic.

Novartis joined Merck & Co. as the leading pharmaceutical dealmakers in terms of deal volume with Novartis also committing to the highest total deal spend. In terms of deal volume, oncology was once again the leading therapeutic area for partnering deals, but dealmaking in nearly all therapy areas was suppressed relative to 2023. Despite looming patent cliffs, collaborative R&D activity remained low in 2024 with values similar to 2023, as key players in the life sciences sector continued to narrow their therapeutic areas on key growth opportunities or focus on existing collaborations that complement their portfolios.