Q&A with KPMG’s Kristin Pothier
Q&A with Kristin Pothier, global deal advisory & strategy leader for healthcare and life sciences at KPMG
Med Ad News: How is M&A activity in the healthcare and life sciences sectors trending during the 2024 second quarter?
Kristin Pothier: Looking at the data for Q2 so far (thru May 24), it is looking like U.S. healthcare M&A will be up compared to the previous four quarters, but only because of one big deal: Johnson & Johnson’s $14 billion acquisition of Shockwave Medical. In life sciences, it’s looking like the total value of deals in Q2 will dip on the previous four quarters, although there is over a month to go in the quarter for this to change.
Med Ad News: When might the industry get back to the quarterly spending levels of more than $120 billion reported throughout 2021?
Pothier: The last time we saw U.S. HCLS M&A over $100 billion in a quarter was Q4 2021. We do not expect that to return this year. We are looking towards 2025 now for the return of HCLS M&A in a more meaningful way. Whether or not we return to the volumes seen in 2020 and 2021 remains to be seen but we expect dealmaking to return in a bigger fashion in 2025, not in the rest of this year. Interest rates now being “higher for longer” is certainly a factor, so is the upcoming election, after which we will see if the regulatory environment is better for dealmaking. Another issue for dealmaking is the continuing need for companies to integrate the acquisitions they made back in 2020 and 2021; a lot of that work is still ongoing.
Med Ad News: How is M&A activity faring in 2024 specifically in the pharma/biopharma sector? What is the outlook for this segment for the rest of 2024?
Pothier: M&A in both healthcare and life sciences (biotech & pharmaceuticals) this year to date is looking flat on last year. We do not expect it to pick up meaningfully this year, and are looking towards 2025 for an uptick in deal volume here, for the reasons mentioned above.
Med Ad News: Along with the very popular AI push, which hot themes are helping drive M&A activity as companies look to expand their business platform?
Pothier: Precision health is a key theme. This ranges from more targeted oncology drugs to lengthen survival and decrease morbidity to specific tailoring of drugs like GLP-1s to treat large populations thoughtfully with a holistic plan that is efficient, effective and economical. Precision health involves the ecosystem of healthcare, not just pharma, so the collaboration and partnership with diagnostics, services, data, and health systems is also key, its not just about pharma M&A anymore.
