Four notes from the report:
1. Expect high pharmaceutical acquisition activity to continue, the financial business said, over the next year and year and a half. Pending acquisitions include Amgen buying Horizon Therapeutics for $27.8 billion, Pfizer buying Seagen for $43 billion and Merck buying Prometheus Biosciences for $10.8 billion.
2. Companies with high potential for significant mergers and acquisitions include Bristol-Myers Squibb, Merck and Royalty Pharma. Those with moderate potential are AbbVie, Biogen, Gilead, Pfizer and Viatris; and those with a low potential include Amgen, Eli Lilly, Johnson & Johnson and Regeneron.
Although Merck recently announced its plan to acquire Prometheus, Moody’s said it sees “significant M&A potential” after this acquisition.
“Despite a solid growth outlook and an expanding pipeline, Merck’s revenues are becoming increasingly concentrated in the blockbuster immuno-oncology drug Keytruda, and the company has stated that M&A remains a top business priority,” the report said. “Business development would mitigate pressures that Keytruda is likely to face later this decade in the form of the Inflation Reduction Act and/or biosimilar competition.”
3. With Biogen hiring a new CEO and a new corporate development leader, a merger or acquisition “appears increasingly likely” but did not fit into the high category because of two medications with pending futures: depression drug zuranolone and Alzheimer’s drug Leqembi, which has been approved but is barely covered by CMS.
4. Johnson & Johnson’s ongoing litigation concerning its now obsolete talc-based baby powder products, which could cost the company billions of dollars, puts J&J with a low M&A potential.
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