A ‘blis­ter­ing’ start to M&A in 2023 stokes hopes of a mar­ket re­bound, as in­sid­ers pre­dict a surge in deals

Big drug­mak­ers have start­ed 2023 with their check­books out, sign­ing sev­er­al multi­bil­lion-dol­lar takeovers in what some in­dus­try in­sid­ers see as the start of an M&A surge fo­cused on snag­ging block­buster drugs.

The up­swing in deals fol­lows a year of falling stock prices and star­tups that have strug­gled to ac­cess pri­vate cap­i­tal. Those two trends are re­lat­ed: The draw­down has pulled down val­u­a­tions to rea­son­able lev­els at a time when phar­ma gi­ants have cash and need to re­load their pipelines. As Jef­feries an­a­lyst Michael Yee summed up in a re­cent note to in­vestors: “Low­er val­u­a­tions and hun­gry phar­ma.”

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