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Experts are predicting a coming surge of mergers and acquisitions in biotech. And if history is any indicator, early-stage startups will be even more tempting targets than normal.

The last time there was a big wave of biotech acquisitions, buyers snapped up early-stage companies much more often than they did during other periods, according to a new STAT analysis of the timing of more than 250 acquisitions in biotech, spanning from 2000 to 2021. Almost a quarter of the companies acquired in the last surge, between 2013 and 2018, had yet to begin a Phase 2 trial. In other years, such early-stage companies made up just 10% of acquisitions.


The analysis has clear takeaways for the current biotech landscape: Now, just as in the mid-2010s, major pharmaceutical companies are sitting on piles of cash and eyeing the expiration of key patent protections for lucrative products. And startups now, as they did back then, also have more reasons to agree to an acquisition: In both periods, market downturns have made going public less attractive, and investors, too, are keeping a tighter grip on their cash.

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