Monday, March 13, 2023

Big Pharma is resisting the temptation to go on a biotech M&A rush until prices go much lower

While falling valuations are pushing biotechs to lay off employees and pare down their pipelines, Big Pharma doesn’t believe the bargains on offer are yet appealing enough to warrant a shopping trip.

According to CEOs of several of the world’s pharma firms during their first-quarter earnings calls over the past two weeks, biotech pricing still has ways to fall before they become enticing for purchases. While M&A as a means of replenishing pipelines is on the table for the major companies, it appears that they are content to be picky.

The current dip in values, according to Roche CEO Severin Schwan, was just a course correction back to levels observed in 2019 and 2020.

“Already back then I was worried about high valuations, so even though there was the correction I still think we have to be very selective … for any M&A activity,” he said.