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Biotechnology M&A in 2024: What to expect

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DATE
January 17, 2024

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2023 brought both opportunities and challenges for the biotech industry, with mergers and acquisitions (M&As) dominating headlines due to economic pressures and regulatory changes. As we look towards 2024, experts predict that the M&A trend will continue, with deals totaling $225 billion to $275 billion, according to a PwC report.

The Federal Trade Commission’s (FTC)

The Consumer Protection laws are upheld by the Federal Trade Commission to counteract fraud, deception, and unfair business practices. Additionally, the Commission enforces federal antitrust laws with the goal of preventing anticompetitive mergers and other business activities that could result in higher prices, limited choices, or reduced innovation.

This antitrust enforcement encourages buyers to approach transactions with caution and preparation, leading some companies to proactively submit HSR paperwork before finalizing acquisition deals. On the regulatory front, more streamlined and permissive agencies like the FDA provide certain firms, especially those involved in gene-edited therapies, immunotherapies, mRNA technology, and innovative diagnostics and drug delivery systems, with additional advantages to present to potential buyers.

Inflation Reduction Act (IRA)

One of the critical factors driving M&A activities in 2024 is the steady influence of the Inflation Reduction Act (IRA) and the broader economic context in the U.S. The IRA, which shaped business activity for biotechnology in 2023, is significant for the industry due to how the law will influence future federal regulation and drug pricing. Higher interest rates will also play a role, particularly for smaller firms that may struggle to compete and become targets for acquisition by larger entities.

AI and Machine Learning

Another significant trend influencing M&A activity in biotech is the rise of AI and machine learning usage. Although AI has helped reduce time and costs while increasing the accuracy and speed of tools and platforms, regulatory concerns still exist around the technology. AI’s impact on drug discovery is still largely unknown, and while it is an important consideration in 2024, the details surrounding its use in biotech remain murky.

Cell and Gene Therapies

Cell and gene therapies are currently a hot area of biotech, and deals in this area involve companies able to ramp up production, even without proprietary technology. Internal manufacturing capabilities that can support clinical development and eventual commercialization will also influence M&A activity this year.

Conclusion

Overall, biotech M&A activity is set to continue at a healthy pace in 2024, driven by several factors influencing the industry. As biotechnology companies navigate an ever-changing landscape, they must remain aware of these trends.

About Astrix

For biotech companies seeking to take advantage of these trends and consolidate their position in the market, an effective hiring strategy will be critical. Astrix is a specialized staffing partner solely focused on the life science industry. We are committed to supporting the industry’s hiring needs and helping our clients navigate the ever-changing landscape of the biotech sector.

We offer a range of services that support biotech companies in their search for top talent. With an extensive network of experienced professionals in the life sciences sector, our recruiters possess the expertise and resources necessary to identify and place candidates with the skills and experience needed to succeed in the field.

Contact us to learn how we can help you with your hiring goals!

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