KPMG+2023年医疗照护与生技投资前景展望调查报告

Sustainedturbulencein

a

p

ost-pandemicmarket2023HealthcareandLife

SciencesInvestmentOutlookContents03

Executivesummary08

Subsectoranalyses10

Life

sciencesoverview11

Biopharma33

Hospitalsandhealthsystems37

Physicianpractices42

Homehealthandhospice4651HealthcareIT18

DiagnosticsConclusionmanufacturing&labservices22

Medicaldevices5253How

KPMGcanhelp26

Biopharmaservices31

HealthcareoverviewAuthors©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.2Executive

summaryWelcometotheKPMG2023HealthcareandLife

SciencesInvestmentOutlook.

Thisin-depthexaminationofthehealthcareandlife

sciences(HCLS)industryexploresthemajordevelopmentsof2022andthesourcesofcontinuingturbulencewe

expectin2023.

We

analyzedhow

eightsubsectorsfaredduringayearcharacterizedby

macroeconomicandgeopoliticalupheaval,andhow

dealactivityandmarketdriverscouldshapethe2023investmentlandscape.The

insightsofthisreportarebasedonextensiveglobalresearchintothedealandmarketenvironments,andourannualsurveyofcorporateandprivateequitydealmakersacrossthesubsectors.CrucialtocreatingthisreportistheexperienceofourHCLS

leaders,whoworkwithourclientsontheirmostpressingdeals,strategy,andimplementationworldwide.stillexpectingthehighvaluationsthathadprevailedin2021,investorsbecamequiteselectiveintheirpursuits.AlthoughthevolumeofM&Ainhealthcareandlifesciencessubsectorsfluctuatedthroughtheremainderof2022,few

subsectorsgotback

tothehighpointofthefirstquarter.The

mostconsequentialevent

of2022for

theindustrymay

have

beenthepassageoftheInflationReductionAct

(IRA),signedintolaw

in

August.Startingin2023,thelaw

requiresMedicarepricenegotiationfor

top-sellingprescriptiondrugs.By2030,asmanyas60therapiesmaybeaffected.

Thenew

rulesarealreadyimpactingrevenueforecastingandvaluationofassetsinbiopharma,andwilllikelyshaperesearchdecisionsandspurtransactionsascompaniesassesstheirpipelinesandproductportfolios.Both

AstraZenecaandMerck

have

notedapossibleimpactonthedevelopmentofcancerdrugs.Lastyearbeganwithoptimismfor

HCLS

investors.

AftertwoyearsofCOVID-19-fueledadvancesandrobustdealmaking,morethan70percentofindustryandPEleaderswe

surveyedexpectedtoincreaseM&Aactivityin2022,motivatedby

thehistoricallylow

costofcapitalandinternalpressurestoputfundstowork.Indeed,overalldealvolumeinthefirstquarter,

althoughdownfromthepreviousyear’s

high,remainedabout21percenthigherthaninthefourthquarterof2019.

However,anotherwintersurgeofCOVID-19

casesatthestartof2022continuedtostraintheresourcesofhospitalsandphysicianpractices.These

organizationsalsowerebesetby

employeeshortages,supplychain

delays,andrapidlyrisingcosts,whilelife

sciencescompaniesfacedtheirowndauntinguncertainties.Still,theextraordinarychallengesof2022couldnotslowrapidinnovationandstrategicrepositioningby

companiesinmanysubsectors.Dealmakingcontinued,often

intheformofsmalleracquisitions,partnerships,andlicensingagreements.Inmanycases,thesedealsweredesignedtoincreaseinvestmentasresearch,development,andmarketingmilestoneswereachieved.

Inflation,highborrowingcosts,andanimpendingrecessionaffectedvarioussubsectorsandcompaniesindifferent

ways,dependingontheirresiliencetoeconomicdownturnsandtheavailabilityofcashfor

acquisitions.Russia’s

invasionofUkraineinFebruaryjoltedtheglobaleconomy,

fuelinginflationarypressuresasenergypricesspikedandinternationalsupplylinesweredisrupted.Thatwas

followedinMarch

by

thestartofaseriesofinterestratehikesfromtheU.S.

FederalReservethatwereamongthesteepestinhistory.

Withpotentialacquisitiontargets©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.3Therewas

asharpdropinthenumberofannouncedHCLS

dealsin2022fromtheheadylevelsof2021.

Somelargedealsinhealthcareandlife

sciencesstilltookplace.Overall,therewere1,307dealsinhealthcare,comparedwith1,859in2021and1,370in2020.Inlife

sciences,thenumberofdealsfell

from1,330in2021to1,074

in2022.

Thenumbersfor

life

sciencesremainedabove

pre-pandemiclevels,andhealthcaredealsin2022wereaboutthesameasin2019.

Intermsofstrategicinvestments,thosedealsfor

life

sciencescompaniesdippedbelowthehighsof2021butremainedabove

2019’s

pre-pandemiclevels(Exhibits3and4).Inhealthcare,strategicdealsfelleven

more,droppingbelowfiguresfor

2019,

2020,and2021(Exhibits5and6).Exhibit

1.

HCLS

deals

remain

well

abovepre-pandemic

levels3,1892,3169462,3811,0742,2449241,3301,85920211,3201,3701,307202220192020HealthcareLifeSciencesNotes:BiopharmadatasourcedfromInformaandPitchbookwhileallotherLS

sub-sectors’datahasbeensourcedfromCapitalIQandPitchbook;HCdatahasbeensourcedfromCapitalIQ,Refinitiv,andPitchbook;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:Informa,Pitchbook,CapitalIQ,Refinitiv,andKPMG

AnalysisExhibit

2.

A

steady

drop

from

the

2021

peak8877847993227733447303027152883625852315692235912835671965892895802605462352964991874972372604192192005254884774284294273463713123543083

113003202019202020212022HealthcareLifeSciencesNotes:BiopharmadatasourcedfromInformaandPitchbookwhileallotherLS

sub-sectors’datahasbeensourcedfromCapitalIQandPitchbook;HCdatahasbeensourcedfromCapitalIQ,Refinitiv,andPitchbook;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:Informa,Pitchbook,CapitalIQ,Refinitiv,andKPMG

AnalysisExhibit

3:

Life

sciences

strategic

investments,2019-22839133684642775931081182721932031971752272072021702021611132019202020212022BiopharmaMedicaldevicesDiagnosticsPharmaservicesNotes:DataforBiopharmasub-sectorsourcedfromInformaandPitchbookwhileallotherLS

sub-sectors’datahasbeensourcedfromCapitalIQandPitchbook;Biopharmasub-sectorexcludesdealspertainingtocannabisandhempaswellasdistributors/suppliersofdrugs;Diagnosticssub-sectorincludecompaniesthataremanufacturersofdiagnosticsequipment,LS

toolsaswellaslabservicesproviders;CompaniesthatareCRO,

CMOorCDMO(supportservices)formedicaldevicescompanieshavebeenexcludedfromouranalysis;PharmaservicesincludeCROs,CMOs,CDMOsaswellascompaniesthatprovidecommercialization,consulting,advertisingservicesandotherservicesoncontractualbasis;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:Informa,CapitalIQ,andKPMG

Analysis©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.4Exhibit

4:

Life

sciences

strategic

investments

by

quarter,

2019-22232372123719220199311962819239181321682316420431581915817431544015224153304272606312818354332119213661605159717054544560546455465755495744554352493642435431423945283923422652462019202020212022BiopharmaMedicaldevicesDiagnosticsPharmaservicesNotes:DataforBiopharmasub-sectorsourcedfromInformaandPitchbookwhileallotherLS

sub-sectors’datahasbeensourcedfromCapitalIQandPitchbook;Biopharmasub-sectorexcludesdealspertainingtocannabisandhempaswellasdistributors/suppliersofdrugs;Diagnosticssub-sectorincludecompaniesthataremanufacturersofdiagnosticsequipment,LS

toolsaswellaslabservicesproviders;CompaniesthatareCRO,

CMOorCDMO(supportservices)formedicaldevicescompanieshavebeenexcludedfromouranalysis;PharmaservicesincludeCROs,CMOs,CDMOsaswellascompaniesthatprovidecommercialization,consulting,advertisingservicesandotherservicesoncontractualbasis;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:Informa,CapitalIQ,andKPMG

AnalysisExhibit

5:

Healthcare

strategic

investments,2019-221,031830241239331783184694161268268228191305148173195136156114201920202021YTD’22HealthsystemsPhysiciangroupsHealthcareIT/DigitalhealthPost-acute

careNotes:Strategicinvestmentsincludedealsundertakenby

apublic/privatecompanywithnomajorprivateequitybacking;IncludesdealswithonlyUS-basedTargets;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublicationYTDasofDecember22,2022Sources:CapitalIQ,Refinitiv,andKPMGanalysis©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.5Exhibit

6:

Healthcare

strategic

investments

by

quarter,

2019-2228225861254512525824355227717522442214582

11521985619156180411743516645434236737273931021303913430847961627860696771894546494540553530265641703471324673283936473645274820352349322019202020212022HealthsystemsHealthcareIT/DigitalhealthPhysiciangroupsPost

acutecareNotes:DatahasbeensourcedfromCapitalIQandRefinitiv;Strategicinvestmentsincludedealsundertakenby

apublic/privatecompanywithnomajorprivateequitybacking(PE);IncludesdealswithonlyUS-basedTargets;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:CapitalIQ,Refinitiv,andKPMGanalysisThe

year

aheadWe

areconfidentthatinvestorvisionandappetiteremainstrong.

We

expectdealvolumestogrowin2023even

aseconomicconditionsbecomemorechallengingandotherindustryheadwindsremain.RespondentstoourinvestorsurveyalsoarebullishaboutM&Aactivityinthecomingyear.

Sixtypercentexpectmoredealsin2023thanin2022,andjust8percentpredictthatdealvolumewillfall.Aprojecteddeclineinindustryvaluationscouldhelppropelstrategicandfinancialinvestments(Exhibit7).Exhibit

7:

Deal

volumes

are

expected

to

grow

while

valuations

come

downQ:

What

magnitude

does

your

firm

plan

to

increase

or

decrease

M&A

deal

activity

for

2023

compared

to

2022,

as

measured

bynumber

of

transactions?1%

2%

5%31%35%20%5%Decreaseabove20%Increasebelow10%Decreaseby

10%–20%Increaseby

10–20%Decreasebelow10%Increaseabove20%Keepdealvolumemore-or-lessthesameQ:

To

what

extent

do

you

believe

valuations

in

your

industry

will

change

from

2022

to

2023?2%13%33%23%16%11

%2%Decreaseabove20%Increasebelow10%Decreaseby

10%-20%Increaseby

10-20%Decreasebelow10%Increaseabove20%Expectvaluationstostaymore-or-lessthesameSource:2023KPMGHCLSInvestmentSurvey©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.6Still,investorscannotignorethechallengesahead.Concernsaboutinflationandrisinginterestrates,competitionfor

themostvaluabletargets,andotherfactorswilllikelyimpactdealplansandactivitythroughouttheyearahead,accordingtooursurveyrespondents(Exhibit8).As

2023unfolds,we

willcontinuetouncoverthetrendsdrivingM&Aacrosshealthcareandlife

sciencesandbringyou

quarterlyupdatesontheseevolvingindustries.Staytuned.Exhibit

8:

Headwinds

that

could

impact

deal

activity

in

2023Q:

What

factors

will

impact

your

firm’s

M&A

deal

activity

plans

for

2023,

as

measured

by

number

of

transactions?

(Pleaserank

as

applicable

up

to

5,

1=most

impactful

and

5=least

impactful)Average

rank2023

3.12022

4.12.52.42.33.03.42.93.63.23.03.44.04.02.52.03.52.93.14.22.63.73.02.014%15%16%18%23%16%8%10%12%32%1%6%11%0%6%5%13%3%11%13%10%9%18%16%15%18%2%4%15%3%5%5%2%3%6%4%4%12%10%9%8%8%8%5%6%8%3%2%13%5%3%4%1%Other9%0%1%9%4%Concerns

Competition

Anticipated

Internal

LimitationsLack

ofConcernsHighCOVID-19

Low

costLowvaluationbaboutinflationandrising

highvalueforalimited

effects

to

pressures

ontravelnumberof

theeconomyavailable

aboutnew

valuationfears/ofcapitalasaresultof

capitalthepandemicanti-trustpoliciesuncertaintyregardingthefutureratesorinnovativetargetsTop

3

factors5–Leastimpactful4321–MostimpactfulNotes:Totals:USFDA

nolongerrecognizingChina-onlyclinicaltrials,availabilityofqualifiedpersonnel,waitingforhome-healthreimbursementfinalization,etc.Source:2023KPMGHCLSInvestmentSurvey©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.7Subsector

analysesSubsectoroverviewhighlightsLife

sciencesBiopharmaDiagnosticsAcontinuedfocusonearly-stagedevelopmentofcellandgenetherapiesandotherbiologicdrugsin2022resultedinproductacquisitions,licensingdeals,andstrategicR&Dpartnerships.Thosesmallertransactionslargelyreplacedthebiggerdealsoftheprevioustwoyears.Inaddition,passageoftheInflationReduction

Act

willrequirepricenegotiationfor

manybest-sellingdrugs.(11)Consumers’experiencesduringthepandemicalteredtheirexpectationsaboutthespeed,accuracy,andconvenienceofdiagnostictesting.This

spurredcompaniesinthissubsectortopursueacquisitionsandpartnershipstofacilitatedecentralizedtestingforagrowingnumberofconditions.Butoveralllevelsofdealmakingfell

by

23percent.Dealscouldreboundin2023ifthegapbetweenbuyers’

andsellers’expectationsnarrows.(18)MedicaldevicesQuestionsabouthow

rapidlyelectivesurgeryvolumewillrecoverdominatedthecalculationsofmanydevicemakersin2022.Dealvolumeinthesubsectordroppedby

about15

percent.Industryleadersarestilllookingtobolsterandshapetheirportfolios,withafocusoninnovationsincardiology,roboticsurgery,internet-connectedwearabledevices,andotherareas.(22)BiopharmaservicesDemandfor

whatcompaniesinthissubsectordo—fromclinicaltestingofincreasinglycomplexpipelinetherapiestosecuringregulatoryapprovalsandcommercializingnew

therapies—continuestoriseaslargecompaniesandbiotechsincreasinglyoutsourcecomponentsofthedrug-developmentprocess.Dealmakingcouldreboundin2023ascompaniesmaneuvertooffer

broader,

deepercapabilities.(26)HealthcareHospitalsand

healthsystemsMostarenow

operatingonnarroworeven

negativemarginsgivenhighercostsofsupplies,capital,andespeciallylabor.

We

expectthesepressurestoforceeven

someofthelargestsystemstoconsiderM&A,jointventures,andnontraditionalpartnerships.(33)PhysicianpracticesRecruitingandretentionwillcontinuetopresentchallengesinthissubsector,butwe

expectstrongdealvolumeandconsolidationin2023.Manyphysicianpracticeswillcontinuetobeappealingtargetsbecausetheyarenimblerthanhospital-drivenhealthsystems,readytopartnerwithpayerstoshift

riskandmove

towardvalue-basedcare,andhave

thedirectpatientcontactrequiredtodriveimprovementsinhealth.(37)Homehealthcareand

hospiceThismarketplacewillcontinuetobeunusuallyvolatile,butmostpatientsandpayersprefertelehealthandhealthcareathometohospitalcare,andthesubsectorremainsrelativelyfragmented.Hospitalsandbrick-and-mortarpost-acuteproviderswillseektargetsinthisspacefor

verticalintegration,andprivateequitywilllookfor

poolsofprofitablegrowth,especiallyamonglessefficientandsmallertargets.(42)HealthcareITThe

subsectorcontinuestoattracttheinterestofinvestorsandacquirerslookingfor

efficienciesandgrowth.Inthewake

ofthepandemic,theyhave

focusedlessonconsumerandtelehealthandmoreonrevenuecyclemanagement,value-basedcare,advancedanalytics,andothertoolsfor

providersandpayers.

We

expectdealactivitytoremainstrongin2023,especiallyfor

targetsworth$200millionto$1billion,despitehighercostsofcapitalandcontinuedvolatility.(46)©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.8Life

sciences©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.9Life

sciences:A

year

of

innovationand

uncertaintyFor

mostofthelife

sciencesindustry,2022broughtmoreuncertaintythanpromise.During2020and2021—yearsofmobilizingtorespondtotheCOVID-19

crisis—lifesciencescompaniesineverysubsectorbenefitedfromremarkablelevelsoffundingandrevenue.Thisfueledastonishinglyrapidscientificadvancesaswellasasurgeindealmaking.Butduringthepastyear,

thepandemiceased,thefloodofmoneyreceded,andmacroeconomicchallengesincreased.companiesaredevelopingnew

kindsoftests,offeringmoretestingoutsideofhospitalsettings(includingmoreat-hometesting),andimprovingthespeedandaccuracyofresults.Evenwiththisshift

infocus,itdidlittle

tobolsterdealvolumeinthesubsector,which

fell

from382in2021to293in2022.For

makersofmedicaldevices,dealvolumedroppedby

about15

percentin2022aselectivesurgeryvolumescontinuetolagpre-COVID-19

levels.However,companiesinplasticsurgery,endoscopy,

orthopedics,andcardiologyhave

experiencedrisingdemand.Innovationininterventionalcardiology,roboticsurgery,andsomeotherareasislikelytoleadtoadditionaldealmakingasindustryleaderslooktobolsterandshapetheirportfolios.In

August,theInflationReduction

Act

passed.

ThelegislationauthorizesMedicaretonegotiatedrugpricesonagroupofhigh-costdrugsandupendslong-standingassumptionsabouthow

drugcompaniesmanagetheirportfoliosandapproachtheirR&D,

clinicalandcommercialstrategies(formore,readourpaperontheimpactoftheIRAonbiopharmaportfoliostrategies).Dealvolumeinbiopharmaservicesfell

by

12.5

percentin2022,butdemandfor

servicesremainsstrong.Majorpharmaceuticalcompaniesaswellasemergingbiotechnologyfirmscontinuetooutsourcemuch

ofthedrug-developmentprocesstobiopharmaservicescompanies.Inpastrecessions,thesecompanieshaveoutperformedtheoverallmarket,andmay

againproveresilientinthefaceofeconomicheadwinds.As

inotherindustries,biopharmadealmakingin2022retreatedfromthehighlevelsoftheprevioustwoyears.Dealactivityfocusedonacquisitionstoaddproductstothepipelineand,increasingly,early-stageinvestments,licensingdeals,andstrategicR&Dpartnerships.Rapidinnovationisalsodrivingactivityindiagnostictesting.Partlypromptedby

theCOVID-19

response,©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.10Biopharma:

Smaller

dealsthat

emphasize

innovationAfter

verystrongdealactivityin2020and2021,anddespiteexpectationsthattrendwouldcontinue,dealvolumefell

in2022.

Acquirersremainedfocusedoninnovation:productacquisition,licensingdeals,andstrategicR&Dpartnerships.Dealsfrequentlyincludedspecificmilestonesrelatedtoclinicaltrialscompletion,regulatoryapproval,andcommercialrelease.The

year’slargestdealwas

Amgen’s

$27.8

billionacquisitionofHorizonTherapeutics,announcedinDecember,whichwillgive

AmgenthreeFDA-approvedtherapiesaswellasseveralpromisingearly-stagetreatments.Thatdwarfedthenumber2deal:Pfizer’s

$11.6

billionacquisitionofBiohaven,which

givesPfizeraportfolioofmigrainetherapies.Butthoselargetransactionsweretheexception;for

themostpart,activitycontinuestotrendtowardsmallerdealsandlicensingagreements.Cellandgenetherapiesremainagrowtharea:dealactivityoutpacedgrowthinmonoclonalantibodypipelinetherapeutic,andcellandgenetransactionsnowaccountfor

22percentofthebiopharmadealmarket,upfromjust10

percentofdealsin2017.

Theindustry’smove

towarddealstrategiesthatmitigateriskseemstobeareactiontotherangeofuncertaintiesfacingthebiopharmaceuticalindustry.How

biopharma

fared

in

2022In2022,thevolumeofbiopharmadealswas

almost26percentlower

thaninaveryrobust2021.

In2021,therewere207strategicinvestments,comparedwith161

in2022.Dealsby

financialinvestorsalsodeclined,from108

in2021to73in2022.Overall,biopharmadealvolumewas

about24percenthigherthanin2019,beforethepandemic.Exhibit

9:

Biopharma

deals

still

top

2019

levels3152427210823473189762071701611132019202020212022StrategicinvestorsFinancialinvestorsNotes:BiopharmadatasourcedfromInformaandPitchbookwhileallotherLSsub-sectors’datahasbeensourcedfromCapitalIQandPitchbook;HCdatahasbeensourcedfromCapitalIQ,Refinitiv,andPitchbook;

AnnualBiopharmadealoutlookpublicationdoesnotincludeM&Adealactivitywithfinancialinvestorsandincludesothernon-M&Adealssuch

asStrategicR&Dcollaborations,outputswillthusdiffer

tothispublication;Someofthe2022dealsmaybemissingduetodatalagatthetimeofpublication;YTDasofDecember22,2022Sources:CapitalIQ,Informa,Pitchbook,andKPMG

Analysis©2023KPMGLLP,

aDelawarelimitedliabilitypartnershipandamemberfirmoftheKPMGglobalorganizationofindependentmemberfirmsaffiliatedwithKPMGInternationalLimited,aprivateEnglishcompanylimitedby

guarantee.

Allrightsreserved.11Inoursurvey,

38percentofbiopharmaexecutivesbelievedthatvaluationsinthesubsectordecreasedin2022,and24percentsaidvaluationshadfallenby

10percentormore.Competitionfor

alimitednumberofassets,thecostofcapital,andtheimpactofCOVID-19onacquisitiontargetswerethetopreasonscitedby

thosewhosaidvaluationshadcomedown.Butcompetitionfor

assetswas

alsonotedasthetopreasonfor

anincreaseinvaluationby

thosewhosaidvaluationshadgoneup(Exhibit10).Exhibit

10:

Many

factors

impact

biotech

valuationsQ:

To

what

extent

do

you

believe

thevaluations

of

innovative

pharmaceutical,

orbiotech

companies

have

changed

in

2022?Q:

In

your

opinion,

what

factors

most

impacted

valuations

forpharmaceutical

or

biotech

companies

in

2022?Increasedby

10%

to20%Increasedby

upto10%3%Competitionover

alimitednumberofhighvalueand/orhighlyinnovativeassets29%71%Costofcapital71%64%29%29%38%35%FinancialimpactofCOVID-19onacquisitiontargets7%ImprovedR&Dproductivitythroughacquisitionofexternalassets21%100%43%OtherStaythesame24%Competitionover

alimitednumberof14%

21%64%36%highvalueand/orhighlyinnovativeassetsCostofcapital

14%64%43%21%Decreasedby

upto10%Decreasedby

10%

to20%14%5%FinancialimpactofCOVID-19onacquisitiontargetsImprovedR&Dproductivitythroughacquisitionofexternalassets50%21%14%36%Decreasedby

morethan20%19%Other100%NotafactorModestimpactonvaluationsHighimpactonvaluationsNotes:Basedonrespondentswhowork/haveinvestmentinbiopharmaindustry;Basedonrespondentswhoselectedincrease;Basedonrespondentswhoselecteddecrease;Other:LegislationchangesSource:2023KPMGHCLSInvestmentSurveyNotableacquisitionsin2022includedtwoPfizerdeals:the$11.6

billionacquisitionofBiohaven1

andits$5.4billionacquisitionofGlobalBloodTherapeutics.The

dealsexpandPfizer’s

sickle-celldiseaseportfolioandaddearly-stageinvestigationalassets.2Therewereseveralnoteworthytrendsinthesubsectorlastyear:The

growing

impact

of

digital

therapeutics.

Thesesoftware-andapp-basedtherapiesfor

preventing,managing,ortreatingawiderangeofdiseasesaresurgingintothemainstream.Clinicaltrials,especiallyfor

psychiatry,

neurology,andconditionssuch

as12Source:

“PfizerCompletes

AcquisitionofBiohavenPharmaceuticals,”

Pfizerpressrelease,October3,2022Source:

“PfizerCompletes

AcquisitionofGlobalBloodTherapeutics,”Pfizerpressr