Abstract

Deal activity in the life sciences sector slowed in 2016 amid a climate of political and economic uncertainty. Indeed, for many of the metrics analysed in this review, deal activity in 2016 failed to live up to 2015, with deal volumes and mean total potential deal values falling for both M&A deals and licensing agreements. That is not to say that 2016 was a particularly bad year for dealmaking, however, as it surpassed 2012, 2013 and 2014 on a number of measures. Nevertheless, despite healthy balance sheets, many companies were wary of big-ticket M&A owing to concerns of overinflated valuations and uncertainty surrounding the future policies of the new political administration in the US. The venture capital market remained accessible to earlystage biotechs, although IPO market conditions were poor for many companies. The pursuit of growth continued to be a key influencer of deal activity and companies were once again willing to pay sizeable premiums to acquire key commercial and late-stage assets. For the fourth year running, AstraZeneca was the most prolific dealmaker, albeit only by a small margin ahead of Johnson & Johnson, helped by an extensive roster of externalisation deals. In terms of deal spend, Shire was the top ranked company in 2016 thanks to its US$32 B takeover of Baxalta. Oncology remained the leading therapeutic area for partnering deals and the immuno-oncology field in particular saw significant investment in R&D alliances.

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