San Diego's Biotech M&A Activity Surpassed $6 Billion in January, Here's What to Expect in 2024
Biotech deals are heating up at the top of 2024, and experts say the hot streak will likely continue in coming months.
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Corporate executives, real estate experts and analysts predict the biotech sector could see lots of buying and selling this year as M&A deals in San Diego are off to a hot start.
Signs of consolidation are already evident. More than $6 billion in biotech M&A activity in the last 30 days, which is on pace to hit deal values not seen since 2021.
Last week, Johnson and Johnson announced it acquired Ambrx Biopharma for $2 billion. This deal closed two weeks after San Diego-based Rayzebio was brought up for $4.1 billion by Bristol Myers Squibb.
San Diego has completed fourteen life science-focused acquisitions in the last two years, which is more frequent than it was five years ago.
“The story is that big pharma is moving into San Diego through acquisition,” Grant Schoneman, executive managing director with JLL, told me in a phone interview on Friday. “We’re seeing this with companies Bristol Myers Squibb, Merck, and Vertex Pharmaceuticals — all who have moved into San Diego through acquisitions of local companies.”
“Big Pharma tends to keep the San Diego-based entity in place more times than not,” he said. “They also keep the same legal entity, and employees — rather than cutting jobs — which allows them to maintain the company and continue growing it.”
One reason why dealmaking is picking up is — strategic acquisitions. Global companies need to remain competitive, and venture backed life science startups are looking to sell, especially now due to the challenging VC fundraising environment.
There are several recent examples of large pharmaceutical firms buying biotech companies with late-stage assets. In 2023, Merck purchased Prometheus Biosciences for $11 billion in June, Novartis bought DTx Pharma for $1 billion in July, and Bristol Myers Squibb acquired Mirati Therapeutics for $4 billion in October.