Where is the sweet spot for M&A?

Back to School 2023: An analysis of biotech takeouts by market cap size

August 29, 2023 6:34 PM UTC

The “sweet spot” for M&A is often said to be in the $5-$10 billion market cap range, where companies generally have soon-to-be or recently approved assets that will bring pharmas calling. In this era where pharmas are facing loss of revenues from upcoming patent cliffs, that’s where the spotlight is focused.

By number, however, the sweet spot is in the $1-$5 billion range, the market cap tier that has swelled the most in the last decade, and that is proving to be the bottleneck for climbing the valuation ranks (see “The expanding universe of public biotechs”). ...