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May 16, 2019

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Little M&A interest in health-care sector

By Ding Yining | 00:01 UTC+8 May 16, 2019 | Print Edition

MERGERS and acquisitions in the health-care sector might not be as active as in previous years but smaller size consolidation might be the target for pharma and investment firms, according to a new report by Ernst & Young.

Life sciences mergers and acquisitions deals totaled US$198 billion in 2018, down about US$90 billion from the average level between 2014 and 2016.

Further consolidation in four areas ­— oncology, immunology and inflammation, cardiovascular disease, infectious disease — could mean more than US$200 billion worth of opportunities in future M&A deals.

Peter Behner, EY global life sciences transactions leader, estimates that consolidation of smaller and medium Chinese firms in the coming years, especially in novel treatment methods such as cell therapy, will allow them to compete with their global counterparts.

“Chinese startups’ innovative therapy and tailor-made treatment would be an attractive target for European and US companies to acquire in order to leverage local tech for global treatment,” Behner said in an interview.

Advances in gene technology may mean R&D will shift focus from mass-market products to tailor-made medicine, which requires better use of data, commented Pamela Spence, EY global health sciences and wellness industry leader.

The number of deals involving digital technologies made by major life sciences firms has been on a steady rise since 2014 as companies race to access the latest breakthroughs.

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