The healthcare industry had a fantastic 2019, according to a recent report by Ernst & Young. In fact, there was an “all-time record for M&A last year,” and 2020 is expected to be busy as well.
Earlier this year, the consulting company released a report showcasing the powerful news. “The consultancy on Monday released its annual report on dealmaking, timed to coincide with the start of the J.P. Morgan Healthcare conference in San Francisco, the year’s biggest event for the biopharma industry,” according to a recent article. “EY tallied $357 billion in 2019 deals among life sciences companies, which encompasses pharma, biotech and medtech — an ‘all-time record’ that surpassed a previous high set in 2014.”
The news was highlighted by EY consultant Peter Behner as mentioned in a statement to the news publication. “2019 has been a ‘mega’ year driven by pharma buyers,” he said. “In 2020, firepower remains plentiful and we expect to see more activity in medtech and big biotech, with megamergers coming from companies with acute growth gaps.”
Here are some of the biggest acquisitions last year and the approximate value of the deal:
- Bristol-Myers Squibb acquired Celgene for $74 billion
- AbbVie acquired Allergan for $63 billion
- Pfizer acquired Array Biopharms for $11 billion
- Novartis acquired Medicines Co. for $10 billion
- Eli Lilly acquired Loxo Oncology for $8 billion
While the industry is unlikely to reach the same levels as it did in 2019, it’s expected that 2020 will still be a banner year, according to the report. “Dealmaking should still be strong, with the life sciences industry holding about $1.4 trillion in financial capacity to pursue acquisitions,” as noted by the publication. “EY anticipates big biotechs and medtech companies that largely remained quiet in 2019 will drive more activity in 2020.”
The news comes as the healthcare industry saw huge gains in employment, according to Bureau of Labor Statistics data. “Employment in healthcare increased by 28,000 in December. Ambulatory healthcare services and hospitals added jobs over the month (+23,000 and +9,000, respectively). Healthcare added 399,000 jobs in 2019, compared with an increase of 350,000 in 2018,” according to a January jobs report.
In sum, while 2019 was a huge year in terms of healthcare M&A, 2020 is expected to be strong too. Plus, there was strong jobs growth in the sector with more good news to come overall for the industry in the coming months.