over ?who says its over ?ohhhh, the weekly breakdown club...

over ?
who says its over ?
ohhhh, the weekly breakdown club ?


livewire ...

M&A

Far from hiding under the covers as markets reacted to the highestinflation in decades, large pharmaceutical companies, flush with cash and manyfacing Loss ofExclusivity on blockbuster drugs, stepped into the market and collectively acquired over US$150b of smaller (as well as some quite large) biotech companies. With prices still depressed in biotech, we expect M&A to continue into 2024.

2023 was the second highest M&A year on recordwith ~US$150 billion of acquisitions during the calendar year

Acquisition themes for the year included Antibody-Drug Conjugates(ADCs), Immunology, Neurology and Radiopharmaceuticals. Given the unique supplychain challenges involved with radiopharmaceuticals in particular, largepharma has historically opted to acquire companies with late stage assets toestablish a presence in this therapeutic modality, as opposed to develop theminternally. Locally, both Telix (ASX: TLX) and Clarity Pharmaceuticals (ASX: CU6) fit that description and could easily be garnering attention from potential partners.

With so much M&A activity in Biotech, it is not surprising that ifyou were to strip out all ‘premium based’ returns, in other words thecollective M&A premium paid by various acquirers over the calendar year,the S&P Biotech Index would have posted a modest loss for 2023. This is nota bad summary of 2023 for Biotech: Very mixed fortunes unless your portfoliocompanies were the subject of M&A. While HB Biotechnology had one portfoliocompany acquired during the calendar year, we believe there are numerous othersin our portfolio that could easily be the subject of M&A in thenot-too-distant future.