The value of mergers and acquisitions in the Irish life sciences sector rose almost 600% last year, new data has shown.
According to EY Ireland's annual M&A Firepower report, which tracks global M&A investment in life sciences, there were seven deals in 2023, down from ten a year earlier.
But the combined disclosed value of the transactions was €1.5 billion, a 596% jump on the 2022 figure.
The bulk of the figure was made up of Amryt Pharma’s €1.3bn sale to Chiesi Farmaceutici.
"Interestingly, almost one in three (29%) of the deals in 2023 were backed by international private equity firms, up from one in ten in 2022," said Fergal McAleavey, EY Ireland Corporate Finance Partner.
"This reflects global private equity firms’ continued interest in the sector and their favourable view of Ireland as a suitable place for investment."
The research also found that there was a notable increase in the number of Irish equity capital fundraising deals in life sciences in 2023, with 12 businesses raising growth capital totalling €142 million.
Shorla Oncology, Vivasure Medical, Fire1, LUMA Vision, Neuromod Devices and Bluedrop Medical all raised in excess of €10m during 2023.
"This investment will give these innovative companies the opportunity to continue to scale and build their businesses and bodes well for the continued growth of a vibrant life sciences industry here in Ireland," said Mr McAleavey.
The data also shows that globally, life sciences mergers and acquisitions investments totalled $191 billion in 2023.
This compared to $142bn in 2022.
Deal volumes fell though from 126 in 2022 to 118 last year.
The resurgence of big M&A deals globally is down to many key products facing the "patent cliff" in the next five years, as well as a need to do deals that deliver new revenue growth and the fact the industry holds near record sized investment war chests.
"The challenge for companies across the sector - both here in Ireland and globally - is to ensure they make the right deals now to deliver lasting value into the future," said Aidan Meagher, EY Ireland Tax Partner and Head of Life Sciences.
"Identifying the best partners, dealmaking structures, innovations, therapeutic areas and strategic approaches is crucial as we navigate a period of upheaval in the global business and regulatory environment."
More than two-thirds of M&A investment came from big pharma, the research found, compared with just 38% in 2022.
Eleven large pharma companies all signed at least one deal of $1bn or more in value.
The largest deal was Pfizer’s acquisition of Seagen for $43bn in March, but Merck also broke the $10bn barrier with its acquisition of immunology specialist Prometheus in April.
EY said its expects the rising trend in M&A spending to continue and accelerate this year.
