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Description

Patent cliff years—periods when blockbuster and mega-blockbuster therapies lose market exclusivity—trigger rapid revenue erosion for affected biopharmaceutical companies. This paper examines whether these revenue shocks systematically influence acquisition behavior. Using data from 2015–2024, we look at patent cliff years and compare M&A activity across cliff and non-cliff periods. The five largest acquisitions in patent cliff years averaged $97.3 billion, more than double the $46.3 billion in non-cliff years, a statistically significant difference (t-test, p = .022). Analysis of Humira, Revlimid, Lyrica, and other blockbuster therapies demonstrates how exclusivity loss influences dealmaking, particularly amongst firms most affected by generic and biosimilar entry. Using relationships between revenue erosion and acquisition spending, we forecast approximately $39 billion in acquisitions by Bristol Myers Squibb and Merck as they navigate losses of their respective top therapies during the 2028 patent cliff. The evidence indicates that patent cliffs are catalysts for significant biopharmaceutical M&A.

Publication Date

4-30-2026

Keywords

M&A, biopharmaceutical, catalyst

“Patent Cliffs as Catalysts for Biopharma M&A” and “Forecasting Biopharma Revenues Using Prescription Data.”

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