Biopharma deal trends outlook for 2023: Q3’22 M&A trends in lifesciences

The overall biopharmaceutical deal market began to see a significant slowdown in the fourth quarter of 2022, and from a deal volume standpoint this has carried through into the first quarter of 2023. KPMG has a number of interesting predictions for the biopharma deal space for the remainder of 2023. These include:

• Mega-mergers will remain out of favor.
• We believe 2023 will also see the rise of more divestitures and out-licensing deals from large biopharmaceutical companies.
• The volume of small to mid-size full company acquisitions will continue to outpace prior years, and we predict that this will be driven by a run on small biotechs in late 2023 and early 2024.
• The more assertive FTC policies and actions will continue to loom over the industry.
• And the implications of the Inflation Reduction Act will lead to reduced valuations for certain small-molecule focused biotech companies because of the 9-year negotiation criteria for high-spend therapies in Medicare Part D and B.