Biopharma mergers and acquisitions (M&A) activity is ratcheting back up following a downturn in 2022 and 2023.

Biopharma M&A have increased by 71% year-over-year during the first quarter of 2024, according to a report out of GlobalData this week. 

The report found M&A deals reached a total deal value of $43.5 billion in Q1 2024. Respondents said they expect mega M&A deals to be a positive growth factor for the pharma industry in throughout this year.

“The recent upturn in biopharmaceutical M&A signals a return in dealmaking confidence, as Big Pharma companies also look to mitigate the challenges such as the Inflation Reduction Act and upcoming patent expirations,” said Alison Labya, a business fundamentals analyst at GlobalData, in a statement.

Thus far, the biggest deal to date this year was Novo Holdings’ $16.5 billion acquisition of Catalent. The move by the parent company of Novo Nordisk is all part of an effort to boost the manufacturing of obesity drugs like Ozempic and Wegovy, which remain in high demand amid ongoing drug shortages.

One month later, Gilead Sciences picked up CymaBay Therapeutics for $4.3 billion, representing another multibillion acquisition at the start of the year.

Antibody-drug conjugates (ADC) continue to attract high levels of M&A investment, according to Labya, as large pharmaceutical companies seek to replenish portfolios with these sought-after drug classes.

Some of the smaller acquisitions completed this year include Johnson & Johnson’s purchase of ADC company Ambrx Biopharma for $2 billion, as well as AstraZeneca’s acquisition of radiopharmaceutical company Fusion Pharmaceuticals for $2 billion.

However, oncology remains the main therapeutic area for M&A deals, accounting for a total deal value of $29 billion. 

In particular, immunology-focused deals saw the biggest growth in deal activity compared to the same time period a year prior, with a 314% rise in deal value.

The report concluded that 2024 will likely hold more M&A activity for the pharma industry.

“Q1 2024 saw an increase in billion-dollar M&A transactions involving large biopharmaceutical companies, such as Gilead and Novartis,” Labya noted. “Given that the biopharma industry can overcome regulatory challenges set by the Federal Trade Commission, the remainder of 2024 is poised for continued M&A investment from large biopharmaceutical companies, which could accelerate R&D and the launch of innovative drugs.”