Ireland’s life sciences M&As surged in value last year

22 Jan 2024

EY Ireland corporate finance partner Fergal McAleavey. Image: EY Ireland

A report from EY says the enterprise value of Ireland’s life sciences M&As grew by nearly 600pc and predicts that M&A spending will continue to grow in 2024.

The value of mergers and acquisitions (M&As) in Ireland’s life sciences sector rose significantly last year, despite a decline in the overall number of deals.

That’s according to a new report from EY, which shows that seven Irish life science M&As occurred last year, a decline from the 10 deals completed in 2022. Despite this, the aggregated disclosed enterprise value of these seven deals was €1.5bn, an increase of nearly 600pc compared to 2022.

EY’s M&A Firepower report noted that Amryt Pharma’s sale to Italian pharmaceutical company Chiesi Farmaceutici made up the bulk of this increase – with an enterprise value of €1.3bn. The report also noted an increase in equity capital fundraising in this Irish sector, as 12 companies successfully raised €142m in growth capital in 2023.

EY Ireland corporate finance partner Fergal McAleavey said nearly 30pc of the deals in 2023 were backed by international private equity firms, up from roughly 10pc in 2022.

“This reflects global private equity firms’ continued interest in the sector and their favourable view of Ireland as a suitable place for investment,” McAleavey said.

The EY report found that the value of life science deals grew globally last year, along with a decline in the number of deals. EY claims this is being driven by topline pressures, such as many key products losing their patent protection in the next five years and a need to deliver new revenue growth and value into the future.

Aidan Meagher, EY Ireland tax partner and head of life sciences, said the biopharma industry “recognises M&A as a strategic avenue for securing growth”.

“The challenge for companies across the sector – both here in Ireland and globally – is to ensure they make the right deals now to deliver lasting value into the future,” Meagher said.

“Identifying the best partners, dealmaking structures, innovations, therapeutic areas and strategic approaches is crucial as we navigate a period of upheaval in the global business and regulatory environment.”

The EY report also claims that the rising trend in M&A spending is expected to continue into the future, due to factors such as large amounts of available capital in the global biopharma sector and the need to secure inorganic growth.

Meanwhile, a report from Pitchbook suggests the value of venture capital deals in Europe fell sharply last year, almost halving in value compared to 2022, due to a tough macroeconomic environment.

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Leigh Mc Gowran is a journalist with Silicon Republic