Rising Tide
2021 turned out to be a very strong year indeed for US life sciences dealmaking, marked by high transaction values and volumes
Deal Drivers
New technology deployment and strong revenues are trends stemming from the pandemic fueling expansionary dealmaking
Post-merger Integration
The pandemic has further complicated things, with personnel and cultural issues among the matters respondents are seeking to improve
Partnerships
Partnerships can be seen as a less complex option to the regulatory hurdles in M&A, possibly, at least in part, because of strengthening antitrust enforcement in the United States.
The Post-Pandemic Future of US Life Sciences M&A 2022
US life sciences in 2022 is clearly in a strong position to benefit from the tailwinds pushing the industry forward. Seizing Opportunities: The Post-Pandemic Future of US Life Sciences M&A 2022 showcases the results of a survey of 100 senior-level US-based executives at life sciences companies on their most recent experience of M&A in the sector.
Seizing Opportunity
What Is Your Company's Plan?
What is your company’s growth plan for 2022 and beyond? If you’re contemplating expansion via M&A or partnerships, download the report.
The stage is set for more and faster breakthroughs than ever before
Life sciences companies most able to respond to the pandemic have reported exceptionally strong revenues, which they have been investing in growth and further innovation through both traditional M&A and, increasingly, partnerships with other organizations. The sector as a whole is looking for collaboration opportunities that build on the technologies, platforms, and ways of working that have proven their mettle through the pandemic, which will create new products and services that could vastly improve patient care and outcomes across a range of conditions.
Patent expiration and defensive reasons have moved to the bottom of the pile
US life sciences companies now see significant potential ahead. Cost-cutting and moves to offset losses in market share are also trending downward. Instead, players in the sector are engaging in M&A from a position of confidence and with a desire to grow and diversify their customer bases and products.
Dealmakers more satisfied with the outcomes & giving more consideration to cultural factors
Notwithstanding the continued challenges stemming from transacting during the pandemic, dealmakers are more satisfied with the outcomes of their integration processes. They have also, tellingly, afforded more time to integrate businesses. That doesn’t mean all has run completely smoothly, with many reporting that they have learned valuable lessons around the importance of cultural factors during integration and some having to withdraw products or services following the deal close.
Download the Report
Life Sciences Industry
It is essential for life sciences industry buyers to dedicate time and resources at the outset of the merger process to plan for post-merger integration.
Not Disclosed
<15m
15m-100m
101m-250m
251m-500m
>500m
0
50
100
150
200
250
300
350
Number 0f Deals
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2022
2021
2020
2019
2018
2017
M&A 2017-Q1 2022 / NUMBER OF DEALS BY DEAL SIZE RANGE
Technology & strong revenues are fueling expansionary dealmaking. We look at the drivers — and deterrents — impacting M&A in the US life sciences space.
SPAC Scrutiny
Disappointing post-merger performance, an increasing number of SPAC-related disputes, and greater SEC scrutiny has led to the shine coming off of these vehicles.
Pricing & Deal Structure
The flurry of biotech listings as well as the divestment of pharmaceutical companies bolstered the cash positions of many US life sciences companies.
R&D Pipeline
The most important reason for pursuing an M&A transaction is that the deal added to or improved the R&D pipeline (for reasons other than patent expiration).
Antitrust Enforcement
The potential effects of more stringent antitrust rules may alter deal plans negatively, or result in hurdles in getting deals over the finish line.
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Merging in a
Pandemic
Overcoming Challenges
Merging in a Pandemic
While M&A has continued through the pandemic, the crisis has contributed to challenges in formulating a strategy, performing due diligence, making sense of a target’s financial projections, and creating cohesive organizations post-transaction.
Overcoming
Challenges
Life sciences companies need to consider cultural integration, due diligence issues, and the value of earn-outs.
Careful planning and a detailed approach to execution are vital to the success of an integration, especially when the business requires high levels of regulatory compliance, and when the backdrop is challenging for operational aspects.
Careful planning is integral to the successful creation of a common culture.
Cultural challenges of integration
10%
8%
12%
6%
12%
18%
18%
24%
28%
18%
20%
26%
0%
5%
10%
15%
20%
25%
30%
Buyer
Seller/Target
External communications
Retaining key talent/staff
Employee relations, other than retaining key talent/staff
Establishing a common culture
Achieving specific cultural goals, such as diversity
Designing for the future, combined organization
Cultural differences are the key item in any M&A deal. Management teams should be prepared for cultural integration to take longer than anticipated.
Evaluating
Success
Evaluating Success
M&A Deals & Drivers
Post-merger Integration
Partnerships on the Rise
Click the Cards Below to Learn More
Last 18 Months / Considerations for Partnerships
9%
4%
0%
23%
19%
4%
14%
18%
24%
14%
29%
23%
0%
5%
10%
15%
20%
25%
30%
Buyer
Seller/Target
Gateway to a potential future acquisition
Potential to access particular capabilities and resources
Lower financial risk than M&A
No complex integration process
Fewer regulatory hurdles than M&A
Connections for future potential partnerships
Well-structured partnerships can help organizations improve their R&D, expand their offerings to patients and customers, leverage new technologies, and even test the water prior to a potential merger or acquisition.
Maintaining control over your organization
5%
14%
This is what Mintz and Mergermarket see for 2022
& beyond.
in private equity funds
trillion
$1.3
US life sciences M&A
1,028
deals
in deal value
rise
43%
As of September 2021, private equity firms globally were sitting on a record $1.32 trillion of dry powder, according to data group Preqin.
US life sciences dealmaking was marked by high transaction values and volumes as the industry continued on its expansionary M&A path.
M&A value in 2021 reached $301 billion, representing a 43% rise on 2020 and amounts to the second-highest annual total on record.
Click to Learn More
Life sciences is poised for a very robust run of M&A activity.
Well-structured partnerships can help organizations improve their R&D, expand their offerings to patients and customers, leverage new technologies, and even test the water prior to a potential merger or acquisition.
gain more focus
Licensing & Collaborations Member
John Cheney
Setting the Stage:
2021 by the Numbers
The stage is set for a robust period of dealmaking – even as the M&A market moves closer to pre-pandemic norms.
Are you ready?
© 2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. P.C.
To Top
Close
Patent expiration and defensive reasons have moved to the bottom of the pile
US life sciences companies now see significant potential ahead. Cost-cutting and moves to offset losses in market share are also trending downward. Instead, players in the sector are engaging in M&A from a position of confidence and with a desire to grow and diversify their customer bases and products.
Close
Dealmakers more satisfied with the outcomes & giving more consideration to cultural factors
Notwithstanding the continued challenges stemming from transacting during the pandemic, dealmakers are more satisfied with the outcomes of their integration processes. They have also, tellingly, afforded more time to integrate businesses. That doesn’t mean all has run completely smoothly, with many reporting that they have learned valuable lessons around the importance of cultural factors during integration and some having to withdraw products or services following the deal close.
Close
0%
5%
10%
15%
20%
25%
30%
© 2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. P.C.
What Is Your
Company's Plan?
What is your company’s growth plan for 2022 and beyond? If you’re contemplating expansion via M&A or partnerships, download the report.
Download the Report
To Top
Cultural challenges of integration
10%
8%
12%
6%
12%
18%
18%
24%
28%
18%
20%
26%
0%
5%
10%
15%
20%
25%
30%
Buyer
Seller/Target
External communications
Retaining key talent/staff
Employee relations, other than retaining key talent/staff
Establishing a common culture
Achieving specific cultural goals, such as diversity
Designing for the future, combined organization
Cultural differences are the key item in any M&A deal. Management teams should be prepared for cultural integration to take longer than anticipated.
Post-merger Integration
Merging in
a Pandemic
Overcoming Challenges
Merging in
a Pandemic
While M&A has continued through the pandemic, the crisis has contributed to challenges in formulating a strategy, performing due diligence, making sense of
a target’s financial projections, and creating cohesive organizations
post-transaction.
Overcoming
Challenges
Life science companies need to consider cultural integration, due diligence issues and the value of earn-outs.
Careful planning and a detailed approach to execution are vital to the success of an integration, especially when the business requires high levels of regulatory compliance, and when the backdrop is challenging for operational aspects.
Evaluating Success
Careful planning is integral to the successful creation of a common culture.
Evaluating
Success
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