Most of the big M&A deals in the diagnostics space that came down in 2021 involved medtech and life sciences companies. The biopharma sector was conspicuously quiet during all of this activity. But analysts expect that to change soon.

Why 2022 Could Be a Big Year for Biopharma M&A 

Biopharma companies are big and have a lot of cash, a combination which almost always bodes well for M&A dealmaking. There are also plenty of available targets, namely, small and mid-cap biotechs. With valuations under downward pressure, these firms are becoming available at affordable prices. Analysts from RBC Capital Markets suggest that single-asset companies in mid- to late-stage clinical development with valuations in the range of $1 to $5 billion will be the primary target for M&A in the biopharma sector in 2022. But “larger blockbuster” deals aren’t out of the question. Historic cycles also suggest that 2022 will be a big year for biopharma M&A. In recent years, the big biopharma firms have been selling off assets in consumer health, generics, and other noncore businesses, accumulating lots of cash along the way. As it normally does every five years or so, the pendulum is now due to swing back from strategic focus and divestment to conglomeration, consolidation, and acquisition. According to a SVB Leerink analyst report cited in medtech journal Fierce Pharma, companies with cash burning holes in their pocket that are likely to be active players in M&A this year include Johnson & Johnson (M&A capacity of over $200 billion), Pfizer ($175 billion), and Novartis ($154 billion). In addition, AbbVie, GSK, Bristol Myers Squibb, and Merck all have over $100 billion in potential M&A spending money, reports Fierce Pharma. Here’s a summary of the key new M&A diagnostic deals that were announced or closed in February 2022:

Mergers, Acquisitions, & Asset Sales