2022 annual inventory: 70 billion US dollars, a big year for global mergers and acquisitions! Novartis and GSK "interact" frequently, Pfizer 5 times to the bottom of the attempt...

A few days ago, media news showed that pharmaceutical giant Novartis is considering a large-scale acquisition, this time the acquisition is not aimed at "Xiaoyu" Biotech, but another pharmaceutical giant GSK
.

In fact, in the face of the global capital winter, the valuation bubble has been squeezed out, and the market bottoms out at a good time
to buy.
In response to Novartis' intention to acquire GSK, the new media center of "Medical Economic News" contacted Novartis and GSK by email, and as of press time, no reply
has been received.

For a long time, most mergers and acquisitions in the pharmaceutical industry have been "big fish eat small fish", and mergers and acquisitions are to expand pipelines or strengthen channels
.
In order to minimize risk, Bigpharma or MNC acquires almost all Biotech companies, and Biotech is often unprecedentedly enthusiastic
about big pharma acquisitions due to shrinking valuations and tight cash flow.

2022 is about to pass, in the double winter of biomedical overseas market and Chinese market, which fields are favored by major enterprises this year?

The drama of giant mergers and acquisitions or will begin?

Novartis "interacts" with GSK frequently

Some investment analysts said that a potential merger deal between Novartis and GSK will prompt Novartis to return to its vaccine and virology business to get rid of the increasingly competitive and risky oncology business
.

In fact, Novartis and GSK have been "interacting" frequently
in recent years.

Back in 2014, Novartis entered into more than $25 billion business swap and M&A agreements with Eli Lilly and GSK to transform their portfolio, strengthen their oncology business, establish a consumer healthcare joint venture (JV), and divest their vaccine and animal health businesses
.

In 2015, Novartis spun off its global vaccines business, excluding flu vaccines, to GSK in a transaction value of $5.
25 billion
.
In 2018, Novartis also sold a 36.
5% stake in the consumer healthcare joint venture to GSK
for $13 billion.
In 2021, Sandoz, a subsidiary of Novartis Pharmaceuticals, reached an agreement with GSK to acquire GSK's cephalosporin antibiotic business
for up to $500 million.

In addition, the industry view is that the sharp decline in GSK's market value is partly affected by the drug risk of ranitidine (Zantac), which also lays the groundwork
for potential large-scale consolidation.

In 2019, the U.
S
.
Food and Drug Administration (FDA) said it had set off a recall of ranitidine in several countries around the world after it detected low levels of N-dimethylnitrosamine (NDMA) impurities in the drug Zantac.
GSK also announced that it is suspending the supply of ranitidine to global markets, including India, and initiating a recall as a precautionary measure, pending the results
of ongoing testing and investigations around the world.

There are reportedly more than 2,000 Zantac-related lawsuits
in the United States.
In August 2022, GSK shares were sold off in the secondary market amid concerns about lawsuits related to the Zantac recall, with a market value down more than 30%
from the $100 billion at the start of 2022.
Now it only hovers around $70 billion, temporarily bidding farewell to the "Global Pharmaceutical Top 10 Market Value Club"
.

The acquisition of large companies involves too many factors, and the strategic adjustment of expanding pipelines through large-scale mergers is still relatively rare, in recent years, only Takeda's $62 billion acquisition of rare disease giant Charles entered the TOP 10 global pharmaceutical companies, and AbbVie's $63 billion won Allergan to rank among the top 5
global pharmaceutical companies.

For Novartis, 2022 is a big year
of "adjustment" and "restructuring" changes.
In April this year, Novartis integrated the two major business units of pharmaceuticals and oncology with a new organizational structure and operating model, focusing on strengthening the R&D and commercialization
of innovative drugs in the future.
In September, Novartis released its future strategy, which plans to achieve a sales compound annual growth rate of +4% in 2027, becoming one of the top five pharmaceutical manufacturers in the United States and one of
the top three pharmaceutical companies in China.
In the future, the company will invest in five main areas: cardiovascular, immunology, neuroscience, solid tumors and hematology
.

The industry generally believes that for large enterprises, while splitting non-core businesses, it has become a consensus
to expand their own volume and innovation capabilities through large-scale mergers and acquisitions.
For the integration actions of Novartis, GSK and other enterprises, the new media center of "Medical Economic News" will continue to pay attention
.

The total amount of mergers and acquisitions exceeded $70 billion

Pfizer rode the dust

The capital winter also accelerates the M&A process
between pharmaceutical companies.
In terms of M&A scale, the total amount of global M&A events in 2022 will be 700+ billion US dollars, of which CSL, a leading Australian blood products and vaccine company, acquired Vifor Pharma, which is good at iron deficiency, kidney disease and rare diseases, for US$117, which became the largest M&A event
this year.

In addition, Pfizer launched a total of 5 acquisitions this year, accounting for more than one-fifth of the total number of acquisitions by large pharmaceutical companies in the first half of the year, making it the largest
number of acquisitions in 2022.
Specifically, Pfizer made three acquisitions in March, April and June in the first half of the year:

In March, Pfizer completed the acquisition of all outstanding shares
of Arena Pharmaceuticals for $6.
7 billion.
Arena brings Pfizer a diverse range of promising candidates in gastroenterology, dermatology and cardiology, including the blockbuster oral drug etrasimod, a selective 1,phosphingosine (S1P) receptor modulator for a variety of immune-inflammatory diseases, including ulcerative colitis, Crohn's disease, atopic dermatitis, eosinophilic esophagitis and alopecia areata
.

In April, Pfizer announced that it would acquire ReViral for $525 million and acquire the latter's RSV treatment pipeline
.
ReViral's core RSV pipeline is the oral inhibitor Sisunadovir, which has been approved by the FDA Fast Track for blocking the fusion
of RSV with host cells.

In June, Pfizer announced it would acquire an 8.
1% stake
in French vaccine company Valneva for $95.
25 million.
It is reported that the funds obtained from the Pfizer share subscription agreement are mainly used to develop VLA15
, a vaccine against Lyme disease.
It is worth mentioning that in April last year, Pfizer reached a $308 million cooperation agreement
with Valneva for the treatment.

In the second half of this year, Pfizer made two large acquisitions
in one go.
Biohaven, a neurological disease drug development company acquired for $11.
6 billion, is the world's first and only CGRP receptor antagonist with a rapidly dissolving oral disintegration tablet form and the only drug
that can be used simultaneously to treat and prevent migraine.

This was followed by Pfizer's acquisition of Global Blood Therapeutics (GBT
) for $5.
4 billion.
GBT specializes in the development of therapeutic drugs for sickle cell disease in SCD in the field of rare diseases, and its development of Oxbryta (voxelotor) tablet is a drug
that directly targets the root cause of SCD.
The acquisition will strengthen Pfizer's presence in rare diseases and accelerate the distribution of GBT's innovative therapies to the
world's most affected regions of SCD.

In addition, GSK, AstraZeneca, United Health and others each made two acquisition transactions
this year.

GSK acquired Affinivax and Sierra Oncology for US$3.
3 billion and US$1.
9 billion respectively to gain a voice in the pneumococcal vaccine space, further strengthen GlaxoSmithKline's expertise in blood therapy, complement its multiple myeloma treatment business, and expand its innovative oncology product line
.

AstraZeneca acquired Neogene Therapeutics, which develops T cell receptor therapy (TCR, Ts), and LogicBio Therapeu
, which has strengths in gene editing.

It is worth noting that the acquisition of LogicBio is AZ's further in-depth layout
in the field of rare diseases.
Previously, in July 2021, AZ completed the acquisition of Alexion for a $39 billion acquisition
.

As the largest health insurance company in the United States, United Health, in the second half of this year, it has successively acquired LHC Group, one of the largest home health care providers in China, and Change Healthcare
, a medical information company.
In the two acquisitions, United Health spent $5.
4 billion and $7.
8 billion, respectively.

With 964 offices in 37 states, the former has served 60% of the U.
S.
population aged 65 and older, providing home health services, hospice services, community-based services, facility-based services, and human-computer interaction services
for patients with illness, injury or chronic diseases.
The acquisition will further expand UnitHealth's presence in the healthcare sector, so that its business covers a diversified service system
such as physician groups, clinics, surgical centers and family health.

In terms of time, when it just entered 2022, MNC rarely made a move
.
In the first quarter, only 4 deals
were closed.
Over time, acquisitions began to become more frequent
.
The three-month trading volume in the second quarter approximately doubled the total volume in the previous quarter
.

Some industry views point out that in the cold winter of capital, the overvaluation bubble can be squeezed out, and whether the mergers and acquisitions of large pharmaceutical companies with sufficient cash can be achieved depends on the looseness of policies and the intensity of regulatory review, as well as the volatility of the stock market and the reasonable assessment
of market value.
Even if there are many uncertainties and challenges, in order to seize more market share and enhance core competitiveness, buyers must take the initiative, and they will make a move, otherwise they will miss good companies, good projects, and good products, and they will have to wait for the next wave of
market conditions and new targets.