Although 2022 saw a general decline in M&A activity in the life sciences industry compared to 2021’s frenetic pace (when deal volume was up 52% from 2020), life sciences deal flow in 2022 on balance remained strong despite the headwinds. Creativity was the year’s primary theme as biotechnology companies increasingly sought alternative cash-raising opportunities in a challenging capital markets environment, such as using carve outs and bolt-on transactions to cash-rich buyers as a lifeline to keep program runways intact, stock-for-stock mergers with other biotechnology companies as a way to combine cash balances and fund key programs (including through private-to-private or public-to-private combinations), and divestitures or out‑licenses of product candidates to streamline operations.
Source: Cooley’s 2022 Life Sciences M&A Year in Review