Pharmaceutical industry M&A activity grew by 17 per cent in H1 as deal values drop 56 per cent

According to the research data analysed and published by ComprarAcciones.com, merger and acquisition (M&A) deal activity in the pharmaceutical sector rose by 17 per cent in H1 2020, disregarding the economic toll of the global pandemic.

It saw a total of 41 deals during the period, but the Q2 2020 deal value total of USD3.3 billion was the lowest quarterly total since Q1 2018.

According to PwC, the pharma sub-sector posted a drop of 56 per cent in deal value from H2 2019 to H1 2020. For the PLS sector as a whole (pharma, biotech and medical devices), the decline in deal value was a massive 87.2 per cent during the same period.

Pharma and Life Sciences (PLS) M&A Total Deal Value Sank from USD272.9 billion to USD35 billion YoY.

The total deal value for the pharmaceutical sub-sector in H1 2019 was USD100.1 billion. In contrast, its total deal value in H1 2020 was valued at USD7.7 billion.

The PLS sector had a total of 99 deals valued at USD35 billion in H1 2020. In H2 2019, the figures were higher, with 129 deals valued at USD86.5 billion. H1 2019 was even bigger, with 119 deals valued at a remarkable USD272.9 billion.

Meanwhile, for the healthcare industry as a whole, H2 2020 started off with 13 deals valued at USD1 billion-plus, according to S&P Global.

On the other hand, based on a report from Global Data, the global M&A deal value started on a downtrend in Q1 2020. It went from USD151.2 billion to USD129.9 billion from February to March. Another study from S&P Global shows that the decline carried into Q2 2020, with a 35 per cent drop in deal volume. Similarly, total transaction value dropped by 40 per cent, the highest drop since 2015.

Comparing H1 2020 to H2 2019, the total deal volume sank by 32 per cent year-over-year (YoY) from 10,155 deals to 6,938 according to Merger Market. Deal values sank by 53 per cent, from USD1.9 trillion to USD901.6 billion during the same period.