Key takeaways from the LSX World Congress USA

I was honored to moderate a panel session on ‘Pharma Fusion: Spearheading Growth Through M&A and Partnering in 2024’. 
As a leading firm in the life sciences and healthcare sector, A&O Shearman is committed to supporting high-growth companies through their early- and mid-term funding stages to IPO, as well as on a range of M&A, licensing, collaborations, and high-stakes patent litigation work. We work across the industry, including with biotech, pharma, consumer healthcare, data and medtech companies.

Dealmaking is always happening

While there are fewer high-publicity megadeals propelling pharma M&A activity this year, partnerships remain key to growth, with business development teams always looking for opportunities. Collaborations, licenses, spin-outs and add-ons, and strategic investments are all additive to traditional M&A.
Despite challenging macro conditions, established pharmaceutical companies are constantly combing the market for innovation, with a view to solidifying a lead in a core therapeutic area or achieving best- or first-in-class potential in a new competitive area. Meanwhile, smaller biotechs are charting a path to steer their therapies through the clinic, to regulatory approval, and ultimately to patients.

The trend is no trends

Speakers emphasized that there is a huge breadth of deal structures driving growth today, pointing out, however, that the flexibility and creativity of tailored transactions tend to result in longer and more complex negotiations.
Early-stage deals built around long-term partnerships can be risky because there is less data available at the outset, but ultimately very successful if the partnership accelerates positive outcomes and efficient utilization of resources.  Late-stage dealmakers, meanwhile, may aim to acquire de-risked assets, or fill revenue gaps in anticipation of loss of exclusivity amid impending patent cliffs. 

Science is a people business

Not surprisingly, pharma M&A and partnering is driven by people, with due diligence covering a target’s management team as much as its data and clinical plans. Biotechs must articulate how their therapies or platforms are a strategic fit for a buyer or partner’s larger narrative. Dealmaking requires trust, clarity, and a cohesive vision of what the deal will achieve.

Conclusion

Boston is the world’s leading biotech hub, thanks to its concentration of academic, clinical, and industry resources, its culture of innovation and collaboration, and its access to talent and capital. Industry M&A and partnerships are, global, however. resulting in cross-border investments and acquisitions. Other global trends include Australia’s growing role in clinical trials, and an increase in commercialization deals in which territories are divided between a company and its collaborators, rather than wholesale divestitures of commercialization rights. 

A&O Shearman’s global footprint makes it uniquely positioned to advise clients on these opportunities and challenges, wherever they arise. We are excited to accompany our clients on their journey to commercial success in this next chapter and beyond.