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The life sciences sector in Ireland saw a massive increase in the number of mergers and acquisitions (M&A) in 2024, but the combined value of these deals collapsed due to the absence of larger transactions, a new report shows.
The life sciences sector encompasses pharmaceuticals, biotechnology, as well as medical technology.
According to the latest EY M&A Firepower report, there were 19 M&A deals last year involving an Irish company — an increase of 171% compared to 2023 levels. These deals were valued at €198m, representing a year-on-year decline of 86%.
However, the results in 2023 were also skewed by the €1.3bn of Amryt Pharma to Italian pharmaceutical company Chiesi Farmaceutici. Excluding this deal would see M&A value for 2024 up by 76% year on year in Ireland.
Among the Irish companies acquired last year include the Cork-based Rowex Ltd which was acquired by the Swiss firm Sandoz. Another Cork-based firm Metabolic Diagnostics was acquired by Trinity Biotech while Clare-based Modular Automation Ireland was acquired by Automated Industrial Robotics Inc.
In terms of Irish fundraising activities, 17 companies successfully raised growth capital totalling €503m. This equates to a 254% increase in value terms compared to the €142m funding raised in 2023.
Some of the firms that successfully raised funding last year include Nuritas, SynOx Therapeutics, PrivaPath Diagnostics, Luminate Medical, CroiValve, and Mainstay Medical.
Corporate finance partner at EY Ireland Fergal McAleavey said these investments 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”.
The report noted that globally, dealmaking volumes were stable during 2024 but the combined value was down 41% to $130bn (€125.5bn) with a pivot towards smaller deals being cited as the reason for the decline.
The report said that companies have shifted their acquisition strategies to look for earlier-stage opportunities with lower price tags.
Instead of investing multi-billions to acquire de-risked, market-ready assets, more than half (51%) of 2024 biopharma deals targeted earlier-stage assets. The slower pace of activity in 2024 may be a natural ‘reset’ after the heightened activity of 2023.
Partner and life sciences sector lead at EY Ireland Johanna McLoughlin said the focus on early-stage assets is expected to continue into 2025.
There is likely to be an increased focus on securing the next generation of growth for many in the life sciences sector as the industry still faces upcoming growth gaps, with patent expiries set to open up $240bn in growth gaps for the top 25 biopharma companies by 2030.
In its outlook for 2025, the report said that therapeutic area focus “will remain a key priority in dealmaking” and there will be opportunities outside traditional technological and geographical areas of innovation – such as AI startups and China biotech.
The report said the industry is holding $1.3tr in capital which can be allocated to further M&A activity “meaning dry powder is there to make bigger deals”.
However, it noted that this capital is not evenly distributed with Danish pharmaceutical company Novo Nordisk and US firm Eli Lilly dominating.
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