Biopharma M&A Expected to Rebound After Sluggish 2021

Most of the big M&A deals in the diagnostics space that came down in 2021 involved medtech and life sciences companies. The biopharma sector was conspicuously quiet during all of this activity. But analysts expect that to change soon.

Why 2022 Could Be a Big Year for Biopharma M&A 

Biopharma companies are big and have a lot of cash, a combination which almost always bodes well for M&A dealmaking. There are also plenty of available targets, namely, small and mid-cap biotechs. With valuations under downward pressure, these firms are becoming available at affordable prices. Analysts from RBC Capital Markets suggest that single-asset companies in mid- to late-stage clinical development with valuations in the range of $1 to $5 billion will be the primary target for M&A in the biopharma sector in 2022. But “larger blockbuster” deals aren’t out of the question. Historic cycles also suggest that 2022 will be a big year for biopharma M&A. In recent years, the big biopharma firms have been selling off assets in consumer health, generics, and other noncore businesses, accumulating lots of cash along the way. As it normally does every five years or so, the pendulum is now due to swing back from strategic focus and divestment to conglomeration, consolidation, and acquisition. According to a SVB Leerink analyst report cited in medtech journal Fierce Pharma, companies with cash burning holes in their pocket that are likely to be active players in M&A this year include Johnson & Johnson (M&A capacity of over $200 billion), Pfizer ($175 billion), and Novartis ($154 billion). In addition, AbbVie, GSK, Bristol Myers Squibb, and Merck all have over $100 billion in potential M&A spending money, reports Fierce Pharma. Here’s a summary of the key new M&A diagnostic deals that were announced or closed in February 2022:

Mergers, Acquisitions, & Asset Sales

Acquiring Company	Target(s)	Deal Summary
Becton Dickinson	Cytognos (from parent firm Vitros)	• Price: Undisclosed • Status: Closed • Acquisition (BD’s 16th since FY 2020) of privately held developer of flow cytometry-based tests for hematologic cancer and blood diseases boosts BD’s blood cancer diagnostics, immune assessment tests, and informatics for chronic disease management
LabCorp	Personal Genome Diagnostics	• Price: Undisclosed • Status: Closed • Acquisition of cancer genomics firm complements and boosts LabCorp’s liquid biopsy and oncology NGS-based genomic profiling capabilities
Tesis Biosciences	Genome Explorations	• Price: Undisclosed • Status: Closed • Acquisition of genomic profiling and molecular diagnostic services firm bolsters Tesis’ effort to complete clinical therapeutic project potentially resulting in a commercialized product early this year
SQI Diagnostics	Precision Biomonitoring	• Price: $6.825 million, including $6.145 million cash and 4,171,779 SQI shares, at $0.163 per share • Status: Closed • SQI acquires Precision’s SARS-CoV-2 testing business, including Canadian distribution rights for SARS-CoV-2 Real-Time RT-PCR Test and Rapid Mobile Testing devices that Precision acquired from Biomeme in 2020
LifeOmic	Bavard	• Price: Undisclosed • Status: Closed • Acquisition of startup maker of "conversational" AI technology which LifeOmic will integrate into its web and mobile applications
Imagia Cybernetics	Canexia Health	• Price: Merger financed by $15.8 million in new funding • Status: Closed • Merger of AI health care and oncology informatics companies to improve precision medicine accessibility via use of AI-based informatics to select treatments and monitor patients
Eurofins Clinical Testing Lux Sarl	Genetic Testing Service JSC	• Price: Undisclosed • Closed • Eurofins Scientific subsidiary acquires Vietnamese genetic testing firm with $11.4 million in revenues last year
Element Biosciences	Loop Genomics	• Price: Undisclosed • Status: Closed • DNA sequencing firm acquires seller of sample prep kits and sequencing services that provide synthetic long reads using short-read sequencing
Tempus	Highline Sciences	• Price: Undisclosed • Status: Closed • Acquisition of oncology-focused contract research organization
Devyser Diagnostics	SmartSeq	• Price: €835,000 ($942,500) cash and stock • Status: Expected to close by end of Jan. • Swedish molecular diagnostics firm, which previously owned 29.9% of Italian data analysis software firm, exercises option to acquire remaining 70.1% for €242,150 cash and €592,850 in newly issued Devyser shares
Bruker	PepSep	• Price: Undisclosed • Status: Closed • Acquisition of Danish liquid chromatography company
Waters	Megadalton Solutions	• Price: Undisclosed • Status: Closed • Acquisition of Indiana University-developed tech that produces charge detection mass spectrometry (CDMS) for characterizing large proteins and protein complexes that are difficult to analyze with conventional mass spec
Sorrento Therapeutics	Virex Health	• Price: Undisclosed • Status: Closed • Acquisition of privately held developer of diagnostics for COVID-19 and other diseases
Medix Biochemica	myPOLS Biotec GmbH	• Price: Undisclosed • Status: Closed • Acquisition of German molecular diagnostics firm enables Medix to broaden its portfolio of molecular diagnostic raw materials
Maravai LifeSciences	MyChem	• Price: $240 million cash + additional contingency-based cash consideration • Status: Closed • Acquisition of manufacturer of modified nucleotides and reagents used in mRNA synthesis bolsters Maravai’s portfolio of nucleic acid production products and R&D capabilities
Active Motif	Amaryllis Nucleics	• Price: Undisclosed • Status: Closed • Acquisition of startup working on RNA sequencing methods provides Active Motif a method for RNA-seq library prep using intellectual property associated with 3' digital gene expression detection