CNBC’s Jim Cramer on Friday pointed out the number of biopharma mergers and acquisitions that have closed or been announced over the last few months. He told investors to keep an eye on these moves in advance of the JPMorgan health care conference next week.
“I know that drug companies are tough to own in presidential election years, but in recent months, we’ve witnessed a big pharma takeover spree,” he said. “And this wave of consolidation is something you need to keep in mind when the JPMorgan health care conference kicks off next week.”
According to Cramer, mergers and acquisitions have been a staple of the industry. They slowed over the past few years as the Biden administration has enforced sweeping antitrust policies. Cramer said he sees this trend starting to shift after two major pharma players managed to close deals this year.
After initiating a lawsuit against the merger, the Federal Trade Commission ultimately allowed drug giant Amgen to purchase Horizon Therapeutics for $27.8 billion last fall. Pfizer also closed a $43 billion deal to acquire Seagen in December of 2023. Cramer thinks these successful acquisitions have emboldened other biopharma companies to pursue mergers.
He pointed to a number of pharma mergers worth billions proposed at the end of last year, starting with AbbVie. The company announced it would buy two outfits towards the end of 2023 — ImmunoGen, notable for its ovarian cancer treatment, and Cerevel Therapeutics, which is developing therapies for a number of neurological conditions. Major sector names Roche and AstraZeneca also announced acquisitions in December of 2023.
But according Cramer, Bristol-Myers is the most active of the bunch as it recently announced deals to buy Mirati Therapeutics, Karuna Therapeutics and RayzeBio. He said the company needs these acquisitions because patents for some of its top drugs are set to expire in the next few years.
“Biopharma companies have finally rediscovered the urge to merge,” he said. “Big pharma’s buying innovation, while the little biotechs sell themselves for distribution and marketing infrastructure—everybody wins.”