Shire’s bid for Baxalta could make 2015 the biggest year ever for pharma M&A

Another day, another pharma deal.
Another day, another pharma deal.
Image: AP Photo/Rafiq Maqbool
We may earn a commission from links on this page.

The pharma deals just keep rolling along.

Drugmaker Shire said Tuesday (Aug. 4) it made a $30 billion offer to buy Baxalta, a maker of rare and chronic disease treatments.

The proposed mega deal comes amid a frenzy of mergers and acquisitions in the pharmaceutical industry, as companies gobble up one another to gain scale and score hefty tax benefits. Baxalta itself spun off from medical products company Baxter International just last month. It’s the third-largest announced deal in the industry this year.

Shire’s offer to buy Baxalta brings the transaction value of global pharma deals announced so far in 2015 to $284 billion, marking the biggest year for pharma dealmaking going back to at least 1995, according to Dealogic.

Changes stemming from the Affordable Care Act continue to fuel a merger boom in the health-care space, with a recent wave of consolidation resulting in three health-care behemoths now controlling half the US commercial health-insurance market. 

The frenzy is aided by a number of factors, including Big Pharma’s fears that a decline in research productivity could stunt growth; biotech execs looking to put their excess cash to use; and companies of all stripes looking to lower their tax burdens with overseas deals.

And the head-spinning pace doesn’t look like it’s going to let up, which means it’s likely the industry will far surpass the 2014 record ($280 billion worth of transactions announced, according to Dealogic).

Here’s a crib sheet for the 10 biggest pharma M&A deals announced so far this year, according to Dealogic:

1. Teva’s $40 billion acquisition of Allergan’s generic drug business unit

2. Mylan’s $35 billion acquisition of generic drug maker Perrigo

3. Shire’s $30 billion acquisition of Baxalta

4. AbbVie’ $21 billion acquisition of biotech company Pharmacyclics

5. Baxter’s $17 billion spinoff of Baxalta

6. Valeant’s $16 billion acquisition of specialty drugmaker Salix

7. CVS Health’s $13 billion acquisition of pharmacy services provider Omnicare

8. Alexion’s $9.5 billion acquisition of rare-disease drugmaker Synageva

9. Endo’s billion $8 billion acquisition of specialty drugmaker Par Pharmaceuticals

10. Celgene’s $8 billion acquisition of biopharmaceutical company Receptos