Big Pharma biotech acquisitions hit record pace as patent cliff drives dealmaking

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Pharma biotech acquisitions surge

Highlights

Biotech takeovers worth at least $1bn have reached 37 so far in 2024, surpassing last year's record 35, with total deal value at $216bn versus $118bn last year.
Eli Lilly agreed to pay up to $3.8bn for AtaiBeckley, following earlier deals for Kelonia Therapeutics ($7bn) and Centessa ($7.8bn), while GSK paid $10.6bn for Nuvalent.
Patent expiries on blockbuster drugs like Merck's Keytruda ($31.7bn sales; patent loss in 2028), robust balance sheets, and a lighter U.S. antitrust environment are accelerating sector M&A.

Record deal volume and latest acquisitions

As reported by Financial Times, the number of biotech takeovers worth at least $1bn this year has reached 37, already above last year's full-year record of 35, citing data from U.S. investment firm Stifel. Total biotech deal value has climbed to $216bn so far this year, up from $118bn in the same period last year, according to LSEG data.

Executives and advisers say the main force behind the surge is the industry's patent cliff, when major drugs lose exclusivity and face lower-priced generic competition. Eric Tokat, co-president of Centerview Partners, says the market is the liveliest he has seen, with buyers across the sector now actively pursuing transactions rather than only a handful of companies leading activity.

The latest deals underscore that momentum. Eli Lilly last week agrees to pay up to $3.8bn for AtaiBeckley, adding to earlier purchases including Kelonia Therapeutics for up to $7bn and Centessa for $7.8bn, while GSK in June pays $10.6bn for Nuvalent, whose two oncology drugs could reach the market later this year if they win U.S. Food and Drug Administration approval.

Patent pressure, policy backdrop and sector impact

Bankers and investors say pharmaceutical groups are using strong balance sheets to secure growth for the next decade, and the market is rewarding that strategy. Ben Wallace, Goldman Sachs' co-head of mergers and acquisitions in the Americas, says patent expiry is the biggest driver, while ample balance-sheet capacity gives chief executives confidence to pursue acquisitions.

Interest is centering on biotech companies with late-stage assets or products close to launch, as companies seek commercially ready medicines. Ailsa Craig, fund manager at Schroders' International Biotechnology Trust, says buyers need assets that can contribute quickly because intellectual property cliffs are approaching; Keytruda alone generated $31.7bn in sales for U.S.-based Merck last year and loses patent protection in 2028.

Competition is also broadening beyond the biggest drugmakers. Midsized groups including France's Servier and Ipsen have each struck two deals this year, while industry executives say a lighter antitrust approach under the Trump administration, easing concerns over tariffs and drug-pricing agreements have all supported confidence; Dave Gardner, chief strategy officer at Incyte Pharma, says fear of missing out is also pushing buyers to act before rivals secure the most attractive targets.

In our earlier article, we covered Cardinal Health’s plan to expand its at-home care footprint through about $360 million in acquisitions. The company agreed to buy AdaptHealth’s diabetes health business and Strive Medical to add direct-to-patient diabetes supplies and strengthen its urology and chronic-care offerings, with management expecting the deals to be accretive to adjusted EPS within 12 months.

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