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Report: Higher M&A activity and investor cash expected in 2017

Friday, December 9, 2016

Despite the uncertainty that loomed over the pharma and biotech sectors with unexpected outcomes from both the U.S. presidential election and U.K.’s vote to leave the EU, 2017 may bring renewed energy to the industry with potential for more corporate activity and cash flow. According to EP Vantage, the editorial branch of the market intelligence firm Evaluate, the Trump victory may lead to a slew of business-friendly initiatives, based on the predicted lessening of political scrutiny towards drug pricing. The report shows that although the issue of drug pricing is not going away, 2017 will start with a flush of new confidence for investors, and a possible uptick in mergers and acquisitions.

According to the “EP Vantage 2017 Preview” report, 2017 will see:

  • Higher corporate activity in the form of M&A, licensing deals and share buy backs
  • Increased investor cash flow
  • Pfizer to dominate prescription and OTC sales in 2017, banking nearly $50 billion
  • Humira remaining the industry’s biggest selling drug
  • Roche and Sanofi with the most keenly awaited regulatory approvals for the sector in the form of MS drug Ocrevus and novel dermatology therapy Dupilumab, respectively
  • Eli Lilly and Pfizer facing the biggest threats to US patents for Cialis and Viagra, respectively
  • Possible tax reform and a tax repatriation holiday that could set-the-stage for big-ticket M&A; Progress in early-stage investigations of cutting-edge scientific techniques—CAR-T, CRISPR gene editing and gene therapies
  • Pressure from payers across the globe spreading to new therapy areas, such as anti-TNFs, MS and rheumatoid arthritis

“With a pro-business administration established in the world’s biggest drugs market, equity analysts and investors are adopting an optimistic outlook for the pharmaceuticals industry in 2017, and predict benefits for biotechnology stocks,” said Lisa Urquhart, EP Vantage editor. “On the flip side, the failure of Eli Lilly’s Alzheimer’s disease project solanezumab, this November, is a staunch reminder of the inherent risk in drug development—and the dangers of overblown expectations.”

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