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Mergers & Acquisitions

‘This is going to be a very different year for M&A than 2024’

Johnson & Johnson, GSK acquisitions reignite M&A enthusiasm at the J.P. Morgan Healthcare Conference

by Rowan Walrath
January 13, 2025

 

A red awning attached to a stately building displays the name of the Westin St. Francis in San Francisco. People walk underneath.
Credit: Rowan Walrath/C&EN
The J.P. Morgan Healthcare Conference is held at the Westin St. Francis in San Francisco.

As the biopharmaceutical industry cautiously emerges from another slow year, a few pharma firms have jump-started 2025 with a burst of acquisitions.

Johnson & Johnson announced Monday morning that it would pay $14.6 billion for Intra-Cellular Therapies, maker of the schizophrenia and bipolar depression drug Caplyta. The purchase is the largest in the life sciences industry since Pfizer bought Seagen for $43 billion in 2023. It comes about 6 months after Johnson & Johnson business development head Nauman Shah said his team was looking to acquire drugs for cancer and for neurodegenerative and neuropsychiatric diseases. The Intra-Cellular deal “dovetail[s] well with JNJ’s existing neuroscience portfolio,” Leerink Partners analyst David Risinger writes in a research note.

The companies made their announcements on the first day of the J.P. Morgan conference. The meeting sees thousands of biopharma executives, analysts, and scientists descend on San Francisco’s Union Square each January and typically sets the tone for the year.

A handful of other companies released acquisition news on Sunday evening and Monday morning: GSK will buy cancer firm IDRx for $1 billion up front, Lantheus will buy positron emission tomography tracer developer Life Molecular Imaging for $350 million up front, and Telix Pharmaceuticals will buy the assets of biologics maker ImaginAb for $45 million up front. On Friday, Biogen offered to buy its struggling partner Sage Therapeutics, maker of the postpartum depression drug Zurzuvae, for $469 million.

“That’s five deals in one and a half business days,” Stifel analyst Tim Opler wrote in a research note Monday morning. “This is going to be a very different year for M&A than 2024.”

Last year, the overall values of life sciences M&A fell 41% from 2023, according to EY’s latest Firepower report, while the number of M&A transactions rose 17%. Industry watchers have been hankering for more large deals, but if J.P. Morgan is any indication, it’s likely that those will still be few and far between—more along the lines of GSK’s purchase of IDRx than J&J’s of Intra-Cellular.

“I think it’s a good sign that the industry keeps buying,” Arda Ural, leader of the life sciences sector at EY Americas, told C&EN in an interview the week before the conference. “Not at the same value we would like to see, but there is pent-up demand, and if the macro is positive, it may be the year that we drop the ‘cautious’ from the optimism statement we have been making.”

As has been the case for the last few years, several large pharmaceutical firms are heading toward so-called patent cliffs, when protections for major, moneymaking drugs expire and generics are allowed to enter the market. Companies like Johnson & Johnson, Bristol Myers Squibb, and Eli Lilly and Company are collectively slated to lose billions in revenue in the next few years. But, per the EY report, they also have $1.3 trillion in cash to spend to replenish their pipelines.

Talks that take place in San Francisco this week could materialize into concrete M&A announcements later in the year, and executives at smaller biotechnology firms are aware of the opportunity. Mural Oncology, which spun out of Alkermes in 2023, has a drug called nemvaleukin in late-stage trials for platinum-resistant ovarian cancer that are likely to wrap up human testing in 2026. If all goes well, that would set the stage for US registration and commercial launch soon after. CEO Caroline Loew says she and her team are prioritizing “business development-type discussions” this week.

“There’s just a reality that for many of the large and midsize companies, they need to build out their pipelines,” Loew says. “So acquisition, we know, is something that companies may well be interested in.”

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