Irish life sciences M&A value plunges in a year without ‘mega deals’ – Business News
The Irish life sciences sector experienced a significant drop in M&A value last year, primarily due to the absence of high-value ‘mega deals.’ Despite an increase in deal-making activity, with 19 transactions in 2024 compared to seven in the previous year, the total worth of these deals plummeted by 86%. In 2023, the M&A market was dominated by the sale of Amryt Pharma to Italian pharma group Chiesi Farmaceutici for €1.3bn, accounting for 85% of the market’s total value that year. Excluding the Amryt acquisition from the 2023 figures, M&A value surged by 76% in the Irish life sciences sector in the following year.
There was a notable uptick in equity capital fundraising activities in the Irish life sciences industry in 2024. Seventeen companies successfully raised growth capital amounting to €503m, a substantial increase from the €142m raised in 2023. Fergal McAleavey, corporate finance partner at EY Ireland, noted that over 70% of the deals in 2024 were backed by international companies and private equity firms, demonstrating their continued interest in investing in the Irish life sciences sector.
In addition to the increase in equity capital fundraising activities, there was a surge in investment in innovative Irish life sciences companies in 2024. Companies such as Nuritas, SynOx Therapeutics, PrivaPath Diagnostics, and others raised significant capital to scale and expand their businesses. McAleavey emphasized that this investment bodes well for the growth of a thriving life sciences industry in Ireland.
Globally, the volume of deal-making in the life sciences sector remained stable, but the total value of deals experienced a 41% decline year-on-year. Companies shifted their focus towards smaller deals, with a particular emphasis on investments in artificial intelligence and the Chinese market. EY identified substantial deal value in life sciences AI, with several significant partnerships and acquisitions in recent years. Notably, Recursion Pharmaceuticals completed a significant AI deal by acquiring Exscientia for $712m in August 2024.
China has emerged as a crucial research and development target for companies seeking novel oncology treatments, as evidenced by AstraZeneca’s acquisition of Gracell Biotechnologies Inc. for $1.2bn. Looking ahead, the EY report highlights that the life sciences industry holds $1.3tn in firepower for future M&A deals. However, potential restraints to the 2025 market include a reduced number of high-quality assets, margin pressure on life sciences companies, and high premiums for prized targets in the market.
Johanna McLoughlin, partner and life sciences sector lead at EY Ireland, emphasized the industry’s focus on securing innovative early-stage assets in 2025. Despite upcoming growth gaps and patent expiries posing challenges to biopharma companies, there is growing optimism around the business environment that could unlock the industry’s vast financial firepower. McLoughlin highlighted the need for the industry to secure the next generation of growth and navigate potential challenges to sustain the growth of the life sciences sector.
