The opening months of 2025 have seen major pharmaceutical companies largely avoiding substantial acquisitions, with only two deals exceeding the $1 billion threshold being announced during the first quarter. This trend potentially reflects growing concerns about the uncertain U.S. political landscape making larger acquisitions appear too risky.
The period from January through March witnessed Johnson & Johnson’s $14.6 billion acquisition of Intra-Cellular Therapies and GSK’s $1 billion purchase of IDRx. While this represents a decrease from the six billion-dollar-plus transactions recorded in the same period of 2024, it aligns closely with the average seen in recent years.
This slowdown in major acquisitions extends beyond just the first quarter. The latter half of 2024 saw only four significant deals, marking the first time in at least seven years without any
transactions surpassing $5 billion.
According to Kristin Ciriello Pothier, who leads Global Deal Advisory and Strategy for KPMG’s Healthcare and Life Sciences division, 2024 proved particularly challenging for dealmaking, with companies displaying notable caution. The anticipated improvement in 2025 has yet to materialize.
Among the dozen deals tracked by BioPharma Dive in the first quarter, five were initiated by major pharmaceutical companies. These included Novartis’ $925 million Anthos Therapeutics acquisition, alongside smaller cancer-focused purchases by AstraZeneca and Bristol-Myers Squibb. The remaining transactions, ranging from $83 million to $935 million, came from less frequent market participants.
Cancer research continues to dominate the industry’s focus, with most of these acquisitions targeting oncology assets. Notably, only one deal centered on the immune system, marking a shift from early 2024’s trend of multiple immunology-focused acquisitions.
Despite expectations that President Trump’s return to office would boost biotech M&A activity, the opposite has occurred. Banking experts interviewed by Reuters suggest that the administration’s economic policies have become a significant obstacle for dealmakers, extending some transaction timelines by months.
The challenging policy environment has contributed to market decline, with the Nasdaq Biotechnology Index dropping 15% since early November. Recent developments, including extensive layoffs at the Department of Health and Human Services and new tariff implementations, have further impacted the market, though pharmaceuticals remain exempt from these tariffs.
Bloomberg reports indicate that market instability has led some companies to suspend or abandon potential deals. Tom Miles of Morgan Stanley noted that M&A activity requires long-term stability for decision-making, which current conditions aren’t providing.
However, Andrew Goodman from Paul Hastings law firm suggests an alternative perspective. He argues that the reduction in FDA workforce could actually stimulate more M&A activity. His firm’s analysis indicates that resource constraints at the FDA will likely extend drug approval timelines, potentially making M&A an attractive solution for smaller biotech companies facing funding challenges due to these delays.
The broader biotech sector continues to face headwinds, with the market showing signs of stress and uncertainty. While some experts anticipate eventual improvement in deal activity, current conditions suggest ongoing caution among major pharmaceutical companies regarding large-scale acquisitions, particularly as they navigate an
increasingly complex political and regulatory landscape.