Healthcare mergers and acquisitions activity is expected to rebound in 2019, increasing to $331 billion, according to a recent report from law firm Baker McKenzie and cited by CNBC.
The law firm expects deal-making in the health sector to increase 7 percent on-year, compared with the 5 percent drop in 2018. The firm's M&A forecast did not include Eli Lilly's Jan. 7 announcement to purchase drug manufacturer Loxo Oncology for $8 billion in cash.
Jane Hobson, a healthcare M&A partner at Baker McKenzie, said the increase in deal-making stems from increased competition within the industry for new drugs.
"As companies compete to add drugs to their portfolios, we're seeing more early stage acquisitions and licensing, sometimes before proof of concept," Ms. Hobson said in the report, according to CNBC.
The law firm predicts deal-making activity to be most intense in the U.S. and Asia. However, increased regulation, political uncertainty, U.S.-China trade tensions and Brexit may affect the number of deals made in 2020.
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