BioWorld’s three-part analysis of M&As sought to discover successful transactions and to understand the trend of multibillion-dollar deals that have become commonplace in the last decade. Instead, more than 80% of the acquisitions explored simply indicate that buyers are paying too much, suggesting that transactions meant to restore pipelines and revenues with innovative and marketed products are sometimes akin to high-stakes gambling. In part three, the final part of this series, we examine four more disappointments in which the return on investment (ROI) remains well behind the price paid in acquiring the company.

Eli Lilly and Co.’s end last year to its PI3Kα inhibitor program didn’t mean the pharma player was giving up on the target – far from it, as signaled by the potential $2.5 billion deal signed recently to take over Scorpion Therapeutics Inc. and gain rights to phase I/II-stage STX-478 for breast cancer and other solid tumors. The list of developers at work in the space includes Roche AG plus smaller entities such as Celcuity Inc., Menarini Group, Onkure Therapeutics Inc., Relay Therapeutics Inc. and Totus Medicines Inc.

Due diligence plays a significant role in M&A transactions, but the eventual return on investments don’t always add up to the purchase price. While some companies such as Abbvie Inc. and Bristol Myers Squibb Co. – as shown in part one of this three-part series – have succeeded in acquiring products able to surpass M&A sticker prices, the vast majority of deals analyzed by BioWorld showed that most buyers remain significantly in the red.

As the number of mega-mergers have increased in recent years, and the purchase price of innovative companies rises, it is apparent that many lucrative buyouts fail to meet expectations, although a few outperform from time to time.

Biopharma deal value continued its upward trend in 2024, reaching $230.53 billion, a 6% increase from $217.69 billion in 2023, setting a new record in BioWorld’s data. Deal volume also grew, with 1,429 agreements across licensing, joint ventures and collaborations, up 3.5% from 1,380 in 2023, though still below the peak activity seen from 2019 to 2022.

Biopharma nonprofit deals remained low in 2024, compared to the pandemic and pre-pandemic years, while grants saw a slight decline from the previous year.