Is Biotech the Future of M&A?

Pfizer recently announced plans to acquire Biohaven Pharmaceutical (NASDAQ:BHVN) for $11.6 billion — a 33% premium.

The move raises some interesting questions. Will more pharmaceutical giants start trying to buy biotech companies? Biotech hit the headlines during the COVID-19 crisis as the technology behind many of the vaccines like those by Moderna and Pfizer and has been a topic of much hype and media attention over the last few years.

An article by ETF Database explored this potential new trend.

“Jefferies analyst Michael Yee “calculates that the combined market capitalization of all the biotech stocks valued at under $5 billion is around $350 billion. The cash balance of the top 20 biopharma companies combined, meanwhile, is over $300 billion.” — ETF Database

It’s still early to call, but as biotech becomes more established, and if it keeps grabbing headlines space in the way it has, there’s every chance it could become a fertile area for M&A over the coming years.

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