While the overall level of deal activity in the life sciences sector fell from H1 2018 to H1 2019,deep-pocketed pharmaceutical companies drove an upturn in deal values by paying premium sums to address concerns about their growth prospects. Several major pharmaceutical companies used M&A in H1 2019 to replenish weak pipelines and offset revenue losses from patent expiries on key products. In aggregate, life science companies pledged to spend US$223 B on M&A in the first 6 months of 2019, a significant increase on the same period the previous year, although the number of deals signed was down 9%. The multi billion-dollar acquisitions of Celgene and Allergan by Bristol-Myers Squibb (BMS) and AbbVie,respectively, accounted for more than 60% of this total. Biotech companies were still able to access venture funding and the public markets with relative ease, however, putting them in a strong position at the negotiating table.

Novartis took the title of the most prolific deal maker in H1 2019 by overtaking Johnson & Johnson (J&J). The level of licensing activity fell by a double-digit percentage from H1 2018 to H1 2019, outpacing the decline in overall deal activity. Despite this, licensing deal values rose significantly over this period in terms of all metrics analysed. Oncology dominated the deal making landscape once again with four of the top 10 M&A deals involving the takeover of companies focused on cancer therapeutics and two of the top three partnering deals as ranked by upfront payment being co-development and co-commercialisation collaborations centered on clinical-stage oncology assets. Gene therapy was also a focus area for deal making in H1 2019. Despite the overall slowdown in deal activity, there was increased participation in collaborative R&D alliances in H1 2019 as companies sought more shots on goal against a backdrop of declining in-house R&D productivity. The aggregate, mean and median deal values for collaborative R&D deals all rose significantly from H1 2018 to H1 2019, helped by eight deals potentially worth US$1 B or more.