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These Were the 10 Biggest Pharmaceutical Deals of 2016

Deals on deals.Photograph by Guillermo Perales Gonzalez — Getty Images

Last year was, well, not the greatest for the drug industry.

A contentious presidential election where both candidates slammed the biopharma industry, with a healthy assist from a cast of cartoonish, price-gouging villains, marred the entire sector (the NASDAQ Biotech Index fell some 20% over the course of the year). And that also had an effect on dealmaking, with a dearth of health care “megadeals” and a retrenchment in overall deal value, according to a new analysis by analytics firm Evaluate’s EP Vantage arm.

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The largest biopharma deals announced in 2016 (not all of them have closed quite yet) contained just one M&A topping the $30 billion threshold: rare disease specialist Shire’s acquisition of Baxter spinoff Baxalta. The other big notable was Pfizer’s buyout of the heavily-sought cancer drug maker Medivation, which had been pursued by a number of other biopharma giants like Merck, Gilead, and Sanofi.

(Sanofi has had a particularly frustrating 12 months in dealmaking – the firm also lost out on the European biotech Actelion to Johnson & Johnson this year, a deal valued at $30 billion.)

EP Vantage

Overall deal value for the year dropped, too, with the average for deals falling to $659.6 million. But, to be fair, the figures are a bit skewed thanks to a monster 2014 of biopharma deal-making.

EP Vantage
EP Vantage

The report authors did cite one concerning trend: a relative lack of risk-taking in the M&As which were announced last year.

“Six of the top 10 acquisitions were of companies with established products; a seventh was of Celator, a company that had already passed a phase III milestone; and an eighth, Anacor, had already submitted Eucrisa to the FDA when Pfizer made its play,” the wrote. “That leaves only Abbvie’s acquisition of Stemcentrx and Allergan’s of Tobira as truly risky transactions. A look at average deal values, sliced a couple of ways, also shows a pullback in 2016. This could well be a result of the general avoidance of more risky moves, as well as lower valuations overall.”

The question going forward is how willing the sector will be to striking deals amid mixed messages from the Trump administration. On the one hand, President Trump has vowed to deregulate the FDA to speed drug approvals (a gift that some major biopharma executives don’t really want in the first place over concerns that it would cause insurers to ditch their products). On the other, he’s slammed pharma industry price hikes and endorsed policies like direct Medicare negotiations over treatment prices.

If stock prices are any indication, this year could wind up being slightly better for biopharma M&A. Major biotech indices are up nearly 9% year-to-date.