Where is the sweet spot for M&A?

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”). ...