CNBC’s Jim Cramer on Friday identified the variety of biopharma mergers and acquisitions which have closed or been introduced over the previous couple of months. He instructed traders to regulate these strikes prematurely of the JPMorgan well being care convention subsequent week.
“I do know that drug companies are powerful to personal in presidential election years, however in current months, we have witnessed an enormous pharma takeover spree,” he stated. “And this wave of consolidation is one thing you want to be mindful when the JPMorgan well being care convention kicks off subsequent week.”
According to Cramer, mergers and acquisitions have been a staple of the industry. They slowed over the previous few years as the Biden administration has enforced sweeping antitrust insurance policies. Cramer stated he sees this pattern beginning to shift after two main pharma gamers managed to shut offers this yr.
After initiating a lawsuit towards the merger, the Federal Trade Commission finally allowed drug big Amgen to buy Horizon Therapeutics for $27.8 billion final fall. Pfizer additionally closed a $43 billion deal to purchase Seagen in December of 2023. Cramer thinks these profitable acquisitions have emboldened different biopharma companies to pursue mergers.
He pointed to numerous pharma mergers value billions proposed on the finish of final yr, beginning with AbbVie. The firm introduced it could purchase two outfits in the direction of the tip of 2023 — ImmunoGen, notable for its ovarian most cancers therapy, and Cerevel Therapeutics, which is growing therapies for numerous neurological circumstances. Major sector names Roche and AstraZeneca additionally introduced acquisitions in December of 2023.
But in accordance Cramer, Bristol-Myers is essentially the most energetic of the bunch as it not too long ago introduced offers to purchase Mirati Therapeutics, Karuna Therapeutics and RayzeBio. He stated the corporate wants these acquisitions as a result of patents for a few of its high medication are set to expire within the subsequent few years.
“Biopharma companies have lastly rediscovered the urge to merge,” he stated. “Big pharma’s shopping for innovation, whereas the little biotechs promote themselves for distribution and advertising and marketing infrastructure—everyone wins.”