The first quarter of 2024 started the Healthcare M&A market off with a bang, with 13 transactions in the billion-dollar price range announced during the first quarter. This compares to Q1:23, when only six transactions exceeded $1 billion. More than half of the billion-dollar transactions announced during Q1:24 were in the Biotechnology sector.
| Acquirer | Target | Price | Target Sector |
| Novo Holdings A/S | Catalent, Inc. | $16,500,000,000 | Other Services |
| Gilead Sciences, Inc. | CymaBay Therapeutics, Inc. | $4,300,000,000 | Biotechnology |
| Health Care Service Corporation | Cigna’s Medicare assets | $3,700,000,000 | Managed Care |
| Boston Scientific Corp. | Axonics, Inc. | $3,700,000,000 | Medical Devices |
| Novartis AG | MorphoSys AG | $2,889,000,000 | Biotechnology |
| Ingersoll Rand | ILC Dover, Inc. | $2,325,000,000 | Other Services |
| AstraZeneca plc | Fusion Pharmaceuticals | $2,000,000,000 | Biotechnology |
| Johnson & Johnson | Ambrx Inc. | $2,000,000,000 | Biotechnology |
| Sanofi | Inhibrx | $1,700,000,000 | Biotechnology |
| Cardinal Health | Specialty Networks | $1,200,000,000 | Physician Medical Groups |
1. Novo Holdings Acquires Catalent for $7.6 Billion
Novo Holdings A/S, a private limited liability company wholly owned by the Novo Nordisk Foundation, announced its acquisition of Catalent for $16.5 billion in February 2024. This was the largest healthcare transaction of the quarter by purchase price, highlighting the growing importance of contract development and manufacturing organizations (CDMOs) in the pharmaceutical industry.
Catalent is a CDMO partner for personalized medicines, blockbuster drugs and consumer health brand extensions. The company was formed in April 2007 when affiliates of the Blackstone Group acquired the core of the pharmaceutical technologies and services (PTS) segment of Cardinal Health, Inc. Cardinal Health created PTS through a series of acquisitions starting with R.P. Scherer Corporation in 1998. According to its most recent financial report, Catalent generated nearly $4.3 billion in revenue in its 2023 fiscal year, and $267 million in EBITDA.
This deal holds immense significance for both parties. For Novo Holdings, it represents its largest acquisition announced to date. This transaction also marks the largest CDMO deal by purchase price of all time, based on disclosed purchase price. However, the deal was met with news of layoffs at Catalent, sparking concerns about potential integration challenges and how Novo Holdings will navigate to ensure a smooth transition and maximize the benefits of this strategic move.
Novo Holdings’ acquisition of Catalent reflects the industry’s reliance on specialized partners and sets a new benchmark for CDMO deals. As both parties move forward, attention will be on successful integration and the long-term impact on drug development and patient outcomes.
2. Gilead Sciences Acquires CymaBay Therapeutics
Gilead Sciences, a research-based biopharmaceutical company in the antiviral space, made a strategic move by acquiring CymaBay Therapeutics for $4.3 billion.
CymaBay Therapeutics is a clinical-stage biopharmaceutical company focused on improving the lives of people with liver and other chronic diseases that have high unmet medical need. Its main lead product candidate, seladelpar, is for the treatment of primary biliary cholangitis, a liver condition associated with inflammation and bile duct damage. By integrating CymaBay’s expertise, Gilead can enhance its liver-focused offerings.
Gilead Sciences is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in areas of unmet medical need. Gilead has operations in more than 35 countries worldwide, with headquarters in Foster City, California.
The acquisition allows Gilead to diversify its product pipeline and explore new therapeutic avenues. With liver disease on the rise, even among sober people, Gilead’s expanded capabilities in this area position it well to address this growing public health challenge. By diversifying its product pipeline through the CymaBay acquisition, Gilead can explore new therapeutic avenues beyond its existing antiviral portfolio. This move aligns with Gilead’s mission to bring transformational medicines to patients worldwide.
3. Health Care Service Corporation Acquires Cigna’s Medicare assets
The healthcare landscape witnessed a significant shift in Q1 2024 with the $3.7 billion acquisition of Cigna‘s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses by Health Care Service Corporation (HCSC).
This move is a strategic response to the rapidly growing Medicare Advantage market. By acquiring Cigna’s established Medicare Advantage business, HCSC gains a wider pool of beneficiaries and strengthens its presence in this crucial market segment. This deal not only positions HCSC for future growth but also potentially allows them to leverage their combined resources to negotiate better rates with healthcare providers, ultimately benefiting both the insurer and the patients they serve.
This is the largest transaction by purchase price outside of the Biotechnology sector during Q1. This isn’t surprising, as Managed Care transactions often tend to be high-value because due to the large customer bases, established networks of healthcare providers, valuable data holdings, and potential for cost savings that come with acquiring established players (or the assets of those players) in the healthcare insurance landscape. Mergers and acquisitions like this reflect the ongoing consolidation within the Managed Care sector, as companies vie for a larger market share and stronger bargaining power.
4. Boston Scientific Acquires Axonics
Boston Scientific, a Massachusetts-based medical device company, made a power move in Q1 2024 by acquiring Axonics, Inc. for $3.7 billion.
Axonics is a global medical technology company that is developing and commercializing novel products for adults with bladder and bowel dysfunction. Its product portfolio includes the Axonics R20 and Axonics F15 Systems, which deliver sacral neuromodulation (SNM) therapy. SNM therapy is a minimally invasive procedure that uses mild electrical pulses to restore communication between the brain and the bladder, resulting in meaningful improvements in patients’ quality of life. According to its fiscal year (FY) 2022 report, the company generated net revenue of $273.7 million for FY 2022, and adjusted EBITDA of $1.6 million.
This acquisition allows Boston Scientific to enter the high-growth sacral neuromodulation market, where it will compete with companies like Medtronic. By integrating Axonics’ technologies, Boston Scientific aims to better serve urologists treating patients with these often-chronic conditions.
According to data captured in the LevinPro HC database, this marks Boston Scientific’s ninth healthcare transaction since 2020. Moreover, with a purchase price of $3.7 billion, this deal represents Boston Scientific’s largest transaction to date, reinforcing its commitment to advancing healthcare solutions.
5. Novartis Acquires MorphoSys
The race to develop innovative cancer therapies heated up in Q1 2024 with Novartis‘s $2.9 billion acquisition of MorphoSys AG. This deal is a significant boost for Novartis’s oncology portfolio.
MorphoSys is a biopharmaceutical company dedicated to the discovery, development and commercialization of therapies for people living with cancer and autoimmune diseases, as well as hematological disorders. The company was founded in 1992 and is headquartered near Munich, Germany. According to its most recent financial report, MorphoSys had total revenues for the full year 2022 of approximately $300 million USD, and EBITDA of nearly $150 million USD.
According to data captured in the LevinPro HC database, the MorphoSys acquisition represents Novartis’ third largest transaction announced to date, by purchase price. The company had a busy first quarter, with four other acquisition announcements made in the Biotechnology and Pharmaceutical industries. Novartis has already announced $3.3 billion in transactions during Q1, quickly approaching the nearly $5.6 billion in announced transactions during the entirety of 2023.
The acquisition of MorphoSys further expands and complements Novartis pipeline in oncology, one of its priority therapeutic areas. Additionally, it enhances Novartis’s global presence in hematology, further solidifying its position as a leader in healthcare solutions.
6. Ingersoll Rand Acquires ILC Dover
Near the end of March, Ingersoll Rand announced its $2.3 billion acquisition of contract ILC Dover. ILC Dover is a world-leader in the design and production of solutions for biopharmaceutical, pharmaceutical and medical device markets, as well as a leading supplier for the space industry. The company serves its global customer base across 11 engineering and production facilities located in North America, Europe and Asia, with more than 2,000 team members.
In connection with this acquisition, Ingersoll Rand will establish a life sciences platform within its precision and science technologies segment, consisting of ILC Dover plus Ingersoll Rand’s life science-focused brands including Thomas, Welch, Zinsser Analytic, Tricontinent, Air Dimensions and ILS. The transaction is expected to close in Q2 2024 and will significantly expand Ingersoll Rand’s presence in the biopharma manufacturing space.
Despite an overall decline in M&A within the biotechnology, pharmaceutical and medical device industries during 2023, there’s still a lot of growth potential within the space. Companies like Ingersoll Rand (as well as Novo Holdings, another CDMO in the biopharma space) recognize the rising demand for medical devices, pharmaceuticals and biologics globally. Strategic acquisitions position these companies to tap into this potential and contribute to critical therapeutic areas, even amidst market fluctuations. And perhaps more money being invested into these arenas could lead to more innovation and reinvigorate M&A within the space.
7. AstraZeneca Acquires Fusion Pharmaceuticals
Another biotechnology deal that made headlines during Q1 2024 was AstraZeneca’s $2 billion acquisition of Fusion Pharmaceuticals. This marked AstraZeneca’s largest transaction to date. The biotechnology company is no stranger to the M&A market, with 12 transactions announced since 2001. Of those, four deals were exceeded the billion-dollar mark.
Fusion Pharmaceuticals is a clinical-stage biopharmaceutical company developing next-generation radioconjugates (RC). Its clinical-stage development portfolio includes FPI-2265, which targets prostate-specific membrane antigen for metastatic castration-resistant prostate cancer, and novel RCs targeting solid tumors. According to its most recent financial report, Fusion Pharmaceuticals had revenue of approximately $2.2 million in the twelve months ending September 30, 2023.
This acquisition complements AstraZeneca’s leading oncology portfolio with the addition of the Fusion pipeline of RCs. The acquisition brings new expertise and R&D, manufacturing and supply chain capabilities in actinium-based RCs to AstraZeneca. It also strengthens AstraZeneca’s presence in and commitment to Canada.
Canada is known for having a relatively streamlined and efficient regulatory pathway for clinical trials compared to some other regions, especially with Health Canada actively working on modernizing its clinical trials framework. This could be advantageous for AstraZeneca, as faster clinical trial approvals in Canada would expedite bringing new drugs developed through Fusion’s pipeline to market globally.
8. Johnson & Johnson Acquires Ambrx
Johnson & Johnson kicked off 2024 with the announcement of its $2 billion acquisition of Ambrx, a clinical-stage biotechnology company focused on discovering and developing optimized protein therapeutics known as bio-conjugates. The planned acquisition presents a distinct opportunity for Johnson & Johnson to design, develop and commercialize targeted oncology therapeutics.
Ambrx has developed a pipeline of novel products, which includes antibody-drug conjugates. The company was spun out of The Scripps Research Institute in 2003. According to its FY 2022 earnings report, the company reported revenue of $7.4 million, and EBITDA was approximately -$73.3 million.
Johnson & Johnson has already started off Q2 with yet another multi-billion dollar transaction. The company acquired Shockwave Medical for $13.1 billion, marking its largest transaction to date. With more than $15 billion in transactions already announced in 2024, Johnson & Johnson has proven itself as one of the most active companies in the space. As a leading acquirer in the space, Johnson & Johnson’s M&A activity will influence industry dynamics, shape research priorities and drive innovations within every space it enters.
9. Sanofi Acquires Inhibrx
In January, Sanofi set its eyes on Inhibrx and its key asset, INBRX-101, in a $1.7 billion deal.
Inhibrx is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates in oncology and orphan diseases. TINBRX-101 is a human recombinant protein that holds the promise of allowing Alpha-1 Antitrypsin Deficiency patients to achieve normalization of serum alpha-1 antitrypsin levels with less frequent (monthly vs. weekly) dosing. According to its FY 2022 financial results, the company generated $2.2 million in revenue for FY 2022, and EBITDA loss was $165 million.
The focus of the deal is on INBRX-101. Sanofi will acquire the drug via a buyout of Inhibrx following the spinout of the biotech’s other assets and employees into a new publicly traded company that will inherit the Inhibrx name. Sanofi will retain an 8% equity stake in New Inhibrx, which allows Sanofi to benefit from any future successes while also supporting the growth of the new entity. The companies expect the transaction to close in the course of Q2 2024.
This deal represents a strategic move by Sanofi to enhance its rare disease portfolio, address unmet medical needs and position itself as a leader in innovative therapies. The $1.7 billion price tag signals Sanofi’s confidence in INBRX-101’s potential and underscores the long-term value of INBRX-101. The successful development and commercialization of INBRX-101 may create positive ripple effects within the healthcare sector, benefiting patients and contributing to Sanofi’s long-term growth.
10. Cardinal Health Acquires Specialty Networks
Cardinal Health, Inc. announced its acquisition of Specialty Networks, an integrated multi-specialty platform with group purchasing organizations, life sciences and research solutions in urology, gastroenterology and rheumatology. The combination of Specialty Networks’ clinical and economic solutions with Cardinal Health’s existing offerings creates synergies that can enhance patient care, streamline workflows and improve outcomes for specialty providers.
Specialty Networks’ PPS Analytics, which analyzes data from various sources (electronic medical records, practice management, imaging and dispensing systems), provides actionable insights for providers, researchers, payers and policymakers. Cardinal Health can leverage these insights to make informed decisions, optimize resource allocation and drive better patient outcomes.
Cardinal Health, Inc. is an American multinational healthcare services company, and the 14th-highest revenue-generating company in the United States on the Fortune 500 list. Headquartered in Dublin, Ohio, Cardinal Health provides pharmaceutical and medical products and services in the United States and worldwide.
Cardinal Health’s focus on downstream provider-focused analytics aligns well with the industry’s trend toward data-driven healthcare. By bolstering its analytics capabilities, Cardinal Health positions itself as a valuable partner for healthcare providers seeking innovative solutions to improve patient care and operational efficiency. The acquisition also accelerates Cardinal Health’s upstream data and research opportunities with biopharma manufacturers. Access to Specialty Networks’ research solutions can facilitate collaboration, clinical trials and pave the way for novel therapies, ultimately benefiting patients and advancing medical science.
