R&D deals drive a spike in M&A activity

Easy financing and a hunger for new revenue is driving a record level of mergers and acquisition in the U.S. healthcare field, and drug makers and labs are benefiting from the sudden spike, according to the number crunchers at Dealogic. Healthcare usually represents about 10 percent of all deals in the U.S., adds Dealogic, but so far this year the industry has claimed a 30 percent share.

There's no question what's driving M&A activity in biopharma, say the analysts. Drug development is a risky business and it can be a lot less expensive and less risky to just buy new technology. And with the life sciences industry in line for billions of dollars in added research funds from the federal stimulus bill, buyers see some of these companies as "sure-fire winners," in the words of the Wall Street Journal.

"Even in the current economic environment, biopharmaceutical firms must continue to innovate and build their businesses for the future," Adel Aslani-Far, an M&A partner with law firm Latham & Watkins LLP, tells the Journal. "For many years now, that innovation has meant external acquisitions in addition to internal R&D. It's no surprise then to see sustained, strong M&A activity in the sector."

- here's the story from the Wall Street Journal 

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