The biopharma industry has seen a recent upswing in mergers and acquisitions (M&A). Total healthcare and life sciences M&A was about $71 billion in the first quarter of 2023, more than double the $28 billion in the same period last year, according to KPMG.
The Wall Street Journal reported that executives at Pfizer PFE, Merck MRK, and Novartis NVS said they are all looking for new drugs to add to their pipelines as their top-selling products lose patent protection in the coming years.
Big pharma companies are sitting on significant cash piles that they could use for deal-making. According to EY estimates, life sciences companies had more than $1.4 trillion in cash and other capital at the end of 2022, suggesting that 2023 could be a year of heightened industry deal-making activity.
Pfizer's (PFE) purchase of Seagen SGEN for $43 billion is the largest pharmaceutical deal since AbbVie's acquisition of Allergan in 2019. Seagen produces targeted therapies that seek out and kill cancer cells without harming healthy cells.
Merck plans to acquire Prometheus Biosciences RXDX, which is testing promising therapies for immune diseases like ulcerative colitis and Crohn's disease. British pharma giant GSK agreed to buy buy Bellus Health BLU.
The iShares Biotechnology ETF IBB is the most popular product in the space. It tracks a market cap weighted index. Vertex Pharmaceuticals VRTX, Gilead Sciences GILD and Amgen AMGN are the top holdings in the fund.
The Invesco Nasdaq Biotechnology ETF IBBQ provides a similar exposure to the sector, but with a lower expense ratio. Launched in 2021, this product has managed to gather only $20 million in assets so far.
The SPDR S&P Biotech ETF XBI tracks an equal-weighted index and is therefore tilted towards smaller companies.
The ALPS Medical Breakthroughs ETF SBIO and the Principal Healthcare Innovators ETF BTEC focus on innovative small- and mid-cap biotech companies.
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Novartis AG (NVS) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
iShares Biotechnology ETF (IBB): ETF Research Reports
Seagen Inc. (SGEN) : Free Stock Analysis Report
Prometheus Biosciences, Inc. (RXDX) : Free Stock Analysis Report
SPDR S&P Biotech ETF (XBI): ETF Research Reports
ALPS Medical Breakthroughs ETF (SBIO): ETF Research Reports
Principal Healthcare Innovators ETF (BTEC): ETF Research Reports
Bellus Health Inc. (BLU) : Free Stock Analysis Report
Invesco Nasdaq Biotechnology ETF (IBBQ): ETF Research Reports
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