Pharma Deal Frenzy May Continue in 2016, Jefferies Survey Finds

  • 77% of those surveyed see M&A activity levels steady or rising
  • About 20 percent see overpaying as risk as premiums stay high

The record year for pharmaceutical and biotech deals may spill over into 2016, according to a survey by Jefferies Group LLC.

More than three-quarters of participants who answered questions about the industry at last week’s Jefferies Global Healthcare Conference in London said purchasing activity will be at least as strong as it was this year, if not more. The biggest trend for biotech companies will be an increase in strategic deals, the survey found.

Pfizer Inc.’s record $160 billion purchase of Allergan Plc, announced Monday, brings the value of pharmaceutical and biotech deals to $403 billion this year, almost double last year’s record of $220 billion, according to data compiled by Bloomberg.

“Mergers and acquisitions are continuing to receive unprecedented support from CEOs, investors and board members alike,” Jefferies said in a statement.

But the poll contained a note of caution for buyers: about 20 percent of respondents said they expected inflated price tags. One-month premiums paid for public companies are at 57 percent so far this year, compared with 60 percent last year, Jefferies said.

Jefferies surveyed more than 170 conference attendees, including company executives, institutional investors and private equity investors.