Novartis AG is paying nearly $1 billion up front to buy privately held Anthos Therapeutics Inc. in a deal that eventually could top out around $3.1 billion. Novartis, coming back to where it started as it and Blackstone Life Sciences founded Anthos in 2019, is entering a crowded space.

Olix Pharmaceuticals Inc. walked the talk in realizing a new $630 million licensing deal with Eli Lilly and Co. for its cardiovascular and metabolic disease asset, OLX-702A (OLX-75016), rallying stock by 30% after it had largely recovered from a terminated deal with France’s Théa Open Innovation last year.

In a deal that Cantor Fitzgerald analyst Eric Schmidt characterized as “capital recycling at its best,” Alumis Inc. and Acelyrin Inc. are merging in an all-stock transaction. The combined pipelines include Alumis’ most advanced prospect, ESK-001, an oral, next-generation, allosteric inhibitor of tyrosine kinase 2 (TYK2). ESK-001 is undergoing the phase III Onward study for moderate to severe plaque psoriasis as well as the phase II Lumus bid in systemic lupus erythematosus.

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.

Chinese biotechs are increasingly seeking deals with multinational companies, and those deal structures are getting more creative. The “newco” deal structure is getting a lot of attention, but the barrier for entry is quite high for this type of deal, Morrison Foerster Shanghai Managing Partner Chuan Sun told BioWorld.

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.

Lantheus Holdings Inc. is making waves in M&A with its second big deal of the month – and year – the acquisition of Evergreen Theragnostics Inc. for $250 million in cash up front and up to an additional $752.5 million in contingent payments. The transaction follows announcement of a definitive agreement to acquire Life Molecular Imaging Ltd., a subsidiary of Life Healthcare Group Holdings Ltd., on Jan. 13 for $350 million in cash at closing and a further $400 million in milestone payments.