A report that U.K. drugmaker AstraZeneca PLC considered Gilead Sciences Inc. an acquisition target has spurred speculation that M&A activity could be making a comeback in the pharmaceutical sector after a pandemic slowdown.
Although experts disagree about the potential of such a deal, AstraZeneca's reported approach hearkens back to predictions from 2019 that M&A would rise because of attractive valuations and the amount of cash that pharmaceutical companies had in their coffers. With Gilead's market value at just under $97.3 billion, according to S&P Global Market Intelligence data, any takeover of the company would be one of the biggest in the industry's history.
While the coronavirus pandemic has curbed deal-making in 2020, it may also have created opportunities for post-pandemic transactions, PA Consulting's U.S. healthcare strategy lead, Bret Schroeder, said in an interview.
"What we now know after the last six months is there's a lot of change and uncertainty in pharma in terms of supply chains, regulatory approvals, fast-tracking certain drugs over others," Schroeder said. "If I'm a pharma company, I'm looking at this environment and these economics, and I think that those types of conversations, those types of mergers maybe make a lot more sense than they did six months ago."
AstraZeneca, Gilead deal speculation suggests post-COVID comeback for pharma M&A
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