There’s no doubt it was an unusually slow February in the healthcare M&A market. Historically, the middle of Q1 tends to dip and then rebound by March, but with less than 100 deals on the books, the rapid spread of the coronavirus, Covid-19, seems to have undercut investor confidence, both big and small. And although some biotech stocks have soared following announcements of their coronavirus treatment efforts, pharmaceutical firms have been relatively quiet. Aside from some players like Gilead (NASDAQ:GILD), which just announced a $4.9 billion acquisition of Forty Seven, Inc. (NASDAQ: FTSV) and whose product remdesivir is seen a hope as a potential treatment for Covid-19, no mega-deals have graced the headlines.

Since last year, pharmaceutical companies have been cutting down their portfolios instead of diving into huge competitor takeovers. Just this week, Takeda Pharmaceutical Co. Ltd. (OTCQB: TKPYY) unloaded a portfolio of 18 select OTC and prescription pharmaceutical assets to Hypera S.A., Brazil’s largest pharmaceutical company, for $825 million. The portfolio was primarily products sold in Brazil, Mexico, Argentina, Colombia, Ecuador, Panama, and Peru, which was part of Takeda’s Growth & Emerging Markets Business Unit. In the company’s news release, Takeda said the sale is part of its plan to divest approximately $10 billion in non-core assets and intends to use the proceeds to reduce debt.

The divesture echoes a slew of deals from 2019, where Takeda sold Xiidra to Novartis (NYSE: NVS) for $3.4 billion in cash and $1.9 billion in potential milestones, and Tachosil to Ethicon, a subsidiary of Johnson & Johnson (NYSE: JNJ), for $400 million. It also sold a primary care drug portfolio to Acino International AG for $200 million in mid-October and a portfolio of 20 selected OTC and prescription pharmaceutical products to STADA Arzneimittel AG for $660 million.

All of these deals certainly relate to Takeda’s huge takeover of Shire plc (NASDAQ: SHPG) for $81.5 billion in 2015, which left Takeda roughly $30 billion in debt. That’s a lot of baggage to carry, even for big pharma.

It’s not just Takeda with plans to lighten the load. In the EY Global Corporate Divestment Study, it found that 83% of life sciences companies are planning to divest portfolio assets, including deprioritized businesses. And it’s not just to cut down debt, as it seems to be the motivation for Takeda, but also to create a focused portfolio to reflect the market. The healthcare services sectors are wrestling with an industry shifting to more value-based care, and that seems to have affected the Pharmaceutical sector as well. If these deals underscore anything, it’s that instead of managing a wide portfolio full of non-core assets, build and invest in a portfolio of core products centered on value could be more profitable. And that idea rang true to us, especially after examining transactions in our Deal Search Online Database.

Take for instance GlaxoSmithKline plc‘s (NYSE: GSK) sale of Rabipur and Encepur to Bavarian Nordic (OTCMKTS: BVNRY) for $334.8 million in late 2019. As mentioned in their news release, the goal of the sale was to “increase focus and reinvest in growth assets, innovation and a simplified supply chain in its vaccines business. ”

Just last week, Aptevo Therapeutics (NASDAQ: APVO) sold off its subsidiary, Aptevo BioTherapeutics, which owns worldwide rights of the commercial hematology asset, IXINITY, to Medexus Pharmaceuticals Inc. (TSXV: MDP) for $30 million in cash. The sale was an effort to transform Aptevo Therapeutics into a “pure-play” life sciences company, focusing on its ADAPTIR bispecific platform, a proprietary approach focused on developing novel antibody-based immunotherapies which hold significant promise for the treatment of cancer and other diseases.

These trends seldom produce any mega-deals, and those may be on hold as the presidential election kicks into high gear and as the coronavirus stifles the stock markets, but stay up-to-date on all Pharmaceutical transactions on and our weekly newsletter.