# Pharma M&A deals in 2017, and what we can expect for the near-term future

CHRISTOPH BIERI
Managing Partner, Kurmann Partners AG, Basel, Switzerland

## Abstract

Pharma M&A activity in 2017 was at a similar level to 2016, and significantly lower than in the preceding years. While deal activity has normalized, there are patterns emerging which indicate in which direction the industry will develop. We expect deal activity to increase in 2018 owing to the tax overhaul in the US. Both OTC and generics spaces seem set to enter a final phase of consolidation.

Globally, deal activity in 2017 was at a comparable level to 2016, and significantly lower than in 2014 and 2015. We counted 323 transactions (2016: 345), with cumulative deal values of US$120bn (2016: US$ 95bn). In comparison, in 2014 and 2015, there were 440 and 490 transactions with cumulative deal values of approximately US$225bnin each year. We believe that the earlier years were exceptional, and that the 2016/2017 level likely reflects normal rather than subdued M&A activity. While global transaction numbers remained stable, the geographic pattern shifted: As shown in Figure 1, there were fewer acquisitions involving targets based in the USA, but significantly greater activity from bidders in emerging markets, when compared to 2016. The most eye-catching transactions were J&J’s acquisition of Actelion (see Box 1) and the large acquisitions of oncology-related assets, notably Gilead’s purchase of KITE Pharmaceuticals (see Box 2). RENEWED DEAL ACTIVITY IN GENERICS Three transactions announced in 2017 with deal values greater than US$1bn involved generic drug firms (see Figure 2).
Akorn was acquired for US\$ ...