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
    • 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

Sunday
July 13, 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
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SUNDAY, JULY 13, 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

  • Screengrab blurred
    Mitford murder sparks political storm as BNP on backfoot, Jamaat and others pounce
  • Representational image
    Some issues remain unresolved despite progress in 2nd round of US tariff talks: Press Minister Mortoza
  • US President Donald Trump gestures to the US flag flying on a new flagpole after stepping off Marine One returning from New Jersey at the White House in Washington, DC, US, 6 July 2025. Photo: Reuters
    Trump intensifies trade war with 30% tariffs on EU and Mexico

MOST VIEWED

  • Representational image
    In addition to 35% tariff, US demands 40% local value addition for 'Made in Bangladesh' goods
  • RAB Director General AKM Shahidur Rahman speaks at the press briefing on a fake bomb threat on Biman Bangladesh flight on Saturday, 12 July 2025. Photo: TBS
    Mother faked bomb threat on Biman flight to stop married son from flying with girlfriend: RAB
  • Screengrab blurred
    Killers bash in head of man with rock, stomp body with perverse pleasure
  • Photo: UNB
    Saima Wazed Putul ‘placed on indefinite leave’ from WHO role amid corruption allegations
  • How tender rules and a lone bidder stall a $2.5b power plant
    How tender rules and a lone bidder stall a $2.5b power plant
  • Bangladesh and US hold tariff talks on 11 July 2025. Photo: CA Press Wing
    Dhaka, Washington yet to agree on 20% of US tariff conditions: BGMEA

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

The 2020 Harrier's Porsche Cayenne coupe-like rear roofline, integrated LED lighting with the Modellista special bodykit all around, and a swanky front grille scream OEM Plus for the sophisticated enthusiast looking for a bigger family car that isn’t boring. PHOTO: Ahbaar Mohammad

2020 Toyota Harrier Hybrid: The Japanese Macan

7h | Wheels
The showroom was launched through a lavish event held there, and in attendance were DHS Motors’ Managing Director Nafees Khundker, CEO Imran Zaman Khan, and GMs Arman Rashid and Farhan Samad. PHOTO: Akif Hamid

GAC inaugurate flagship showroom in Dhaka

8h | Wheels
After India's visa restriction, China's Kunming is drawing Bangladeshi patients

After India's visa restriction, China's Kunming is drawing Bangladeshi patients

1d | Panorama
Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

2d | The Big Picture

More Videos from TBS

Why is there a mystery surrounding the death of 'Jalibi' actress Humaira?

Why is there a mystery surrounding the death of 'Jalibi' actress Humaira?

14m | TBS World
Why cockpit audio deepens the mystery of Air India crash

Why cockpit audio deepens the mystery of Air India crash

44m | Others
Housing officer shot in Pallavi for not paying bribe

Housing officer shot in Pallavi for not paying bribe

1h | TBS Today
BNP does not protect criminals like Sheikh Hasina: Rizvi

BNP does not protect criminals like Sheikh Hasina: Rizvi

1h | 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