A reckoning is coming for cash-strapped biotechs | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Tuesday
July 22, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
TUESDAY, JULY 22, 2025
A reckoning is coming for cash-strapped biotechs

Panorama

Chris Hughes, Bloomberg
21 January, 2022, 10:15 pm
Last modified: 21 January, 2022, 10:20 pm

Related News

  • JP Morgan sees 60% chance of global recession
  • Brac Bank, JP Morgan join hands for streamlined inward and outward remittances with Xpedite Select
  • JPMorgan to outsource $500 bln custody business in Hong Kong, Taiwan: sources
  • What India's inclusion in JPMorgan's bond index means for its markets
  • India gets green light to join JPMorgan bond index; rupee, bonds gain

A reckoning is coming for cash-strapped biotechs

As biotechs struggle to raise capital, buyers can afford to be picky: they have the upper hand

Chris Hughes, Bloomberg
21 January, 2022, 10:15 pm
Last modified: 21 January, 2022, 10:20 pm
A reckoning is coming for cash-strapped biotechs

The biotech sector is more than 40 percent down from its high last February, while the major pharmaceutical firms are flush with cash. That sounds like the ideal condition for dealmaking. But what if biotech boards and shareholders want takeover bids at yesterday's sky-high prices?

A 2020 study by JP Morgan Chase & Co. analysts found that when markets fall, a takeover target's one-year share-price high is a stubborn benchmark for pricing a deal. So it can take more than a year from a market correction until buyers and sellers align. Those dynamics may now be at work.

The first year of the pandemic saw a surge in stock-market enthusiasm for biotechnology as investors correctly bet that science would lead the world out of the pandemic. Moderna Inc.'s vaccine provided vindication. But the sector has now given up all its outperformance, and the market is looking beyond Covid-related breakthroughs. Bloomberg Intelligence analysts also point to concerns about drug-pricing pressure as well as a string of regulatory setbacks as factors damaging sentiment.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Could the global mergers and acquisitions (M&A) boom bail out biotech investors with some juicy takeover offers? So far, M&A has benefited health-care investors pretty selectively. Last year saw a surge in deals for firms involved in medical equipment and services — diagnostics, face masks, hospitals and health insurance. One deal, the $34 billion leveraged buyout of family-owned Medline Industries Inc., represented a big chunk of the total. At the weekend, it emerged that Unilever Plc wants to buy GlaxoSmithKline Plc's consumer-healthcare business to get hold of brands like Sensodyne toothpaste.

The absence of a single really big transaction in pharmaceuticals and biotech in 2021 has created the impression of a lull when it comes to M&A in actual drug discovery. By contrast, the 2019 deal data in pharma and biotech were boosted by the $84 billion purchase of Allergan Ltd. and the $88 billion acquisition of Celgene Corp. In 2020, biotech Alexion Pharmaceuticals Inc. agreed to be bought for $39 billion. And 2018 saw the $81 billion bid for Shire Plc.

In reality, recent deal flow is stronger than it seems: The number of transactions over $1 billion has been pretty steady in pharma in recent years and has been growing in biotech. The question is whether biotech M&A could now markedly accelerate.

Falling share prices should tempt bargain hunters and deals are certainly affordable. Swiss drugmaker Novartis AG is looking for purchases up to around $10 billion. Pfizer Inc. is enjoying the revenue boost from its Covid vaccine. Sanofi has traditionally been a busy acquirer.

But biotech investors should temper their optimism. The message telegraphed by potential acquirers at JP Morgan Chase's annual healthcare conference last week was that buyers and sellers were some way apart on price.

That's more than just talking about their own book. Buyers can afford to be picky. After a deluge of recent listings, it's far from clear that biotechs can now raise capital in public or private markets so easily. Those that need cash face a reckoning. Buddying up with big pharma may be the only way to fund their ongoing R&D. Elsewhere, acquisitive bosses may find decent opportunities among unlisted biotechs that may now struggle to do an initial public offering or blank-check merger. After all, without a quoted share, they are less likely to be hostage to an unrealistic anchor price.

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication.

Biotech / JP Morgan

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Enraged students cause a scuffle as Education Adviser CR Abrar and Law, Justice, and Parliamentary Affairs Adviser Asif Nazrul arrived at Milestone School and College on 22 July 2025. Photo: Screengrab
    Law and education advisers besieged by demonstrating Milestone students on Diabari campus
  • Collected from Facebook
    Her burnt bag, books found, but Raisa is still missing
  • People outside the National Institute of Burn and Plastic Surgery on 22 July 2025. Photo: Mehedi Hasan/TBs
    Milestone tragedy: Public rushes to donate blood at burn institute

MOST VIEWED

  • Training aircraft crashes at the Diabari campus of Milestone College on 21 July 2025. Photo: Courtesy
    BAF jet crash at Milestone school: At least 20 including children, pilot dead; 171 hospitalised
  • Flight Lieutenant Md Towkir Islam. Photo: Collected
    Pilot tried to avoid disaster by steering crashing jet away from populated area: ISPR
  • An idle luxury: Built at a cost of Tk450 crore, this rest house near Parki Beach in Anwara upazila has stood unused for six months. Perched on the southern bank of the Karnaphuli, the facility now awaits a private lease as the Bridge Division seeks to put it to use. Photo: Md Minhaz Uddin
    Karnaphuli Tunnel’s service area holds tourism promises, but tall order ahead
  • Bangladesh declares one-day state mourning following plane crash on school campus
    Bangladesh declares one-day state mourning following plane crash on school campus
  • 91-day treasury bills rate falls 1.13 percentage points to 10.45% in a week
    91-day treasury bills rate falls 1.13 percentage points to 10.45% in a week
  • Air Force F-7 BJI training aircraft crashes at Milestone College in Uttara
    Air Force F-7 BJI training aircraft crashes at Milestone College in Uttara

Related News

  • JP Morgan sees 60% chance of global recession
  • Brac Bank, JP Morgan join hands for streamlined inward and outward remittances with Xpedite Select
  • JPMorgan to outsource $500 bln custody business in Hong Kong, Taiwan: sources
  • What India's inclusion in JPMorgan's bond index means for its markets
  • India gets green light to join JPMorgan bond index; rupee, bonds gain

Features

Illustration: TBS

Uttara, Jatrabari, Savar and more: The killing fields that ran red with July martyrs’ blood

14h | Panorama
Despite all the adversities, girls from the hill districts are consistently pushing the boundaries to earn repute and make the nation proud. Photos: TBS

Despite poor accommodation, Ghagra’s women footballers bring home laurels

1d | Panorama
Photos: Collected

Water-resistant footwear: A splash of style in every step

1d | Brands
Tottho Apas have been protesting in front of the National Press Club in Dhaka for months, with no headway in sight. Photo: Mehedi Hasan

From empowerment to exclusion: The crisis facing Bangladesh’s Tottho Apas

2d | Panorama

More Videos from TBS

Rumors of concealing casualty data: Press Wing

Rumors of concealing casualty data: Press Wing

54m | TBS Today
A team will come from Singapore to treat the injured

A team will come from Singapore to treat the injured

2h | TBS Today
The doctors arrived with bad news

The doctors arrived with bad news

3h | TBS Today
People flocked to donate blood

People flocked to donate blood

3h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net