Big Pharmas aren’t letting the looming threat of potential tariffs divert them from their M&A strategies for the year—at least for the time being.
As the dust settles on the first significant week of quarterly earnings calls since the Trump administration made clear that tariffs on pharmaceutical imports are a live option, executives at some of the biggest drugmakers insisted they are staying focused on their existing plans.
In a call with analysts yesterday, Bristol Myers Squibb CEO Chris Boerner, Ph.D., declared that business development “remains a top priority” for the company.
The pharma is planning to slash $2 billion in costs by the end of 2027, on top of a $1.5 billion initiative unveiled last year that targeted more than 2,000 layoffs. These efforts to make BMS “more efficient and agile” have given the company the “financial flexibility to be … much more engaged on business development,” Boerner said.
This is “way more important than any of the exogenous factors” that could affect the industry more widely, such as the threat of tariffs or the restructuring at the FDA, the CEO added.
When it comes to potential acquisitions that BMS has in its sights, Boerner would only say that the company is “focused on strengthening our position in the core TAs that we operate in.”
“That’s bringing in promising areas of science, assets where we can improve the growth profile of the company,” he added. “And what’s important is that we like the science and we feel we’re the rightful owners; the financials make sense; and again, that’s strengthening the growth profile in key areas.”
Meanwhile, Merk & Co. is already counting the costs of the Trump administration’s current tariff policy. Even before any pharmaceutical tariffs become a reality, the Big Pharma expects the existing tariffs implemented between the U.S. and China, plus Canada and Mexico, will lead to incremental costs of $200 million.
Despite this, Merck’s CEO Rob Davis echoed BMS’ sentiment by stating that business development remains a “top priority.”
“Our desire and belief that we need to continue to identify new science-based opportunities to continue to build on the pipeline is unchanged,” Davis told analysts in response to a specific question about the impact of tariffs. “And so our strategy continues.”
“Clearly what’s happening does make it more complex to get things done because [of] the uncertainty everyone is wrestling with,” the CEO continued in the April 24 earnings call. “And we are doing everything we can to make sure we reflect that as we think about value and what we are willing to pay in that environment. But it’s not stopping us from being aggressive and wanting to move forward and do deals.”
AbbVie didn’t use its own earnings call this morning to map out its M&A strategy, but CEO Rob Michael said that the lack of concrete information about tariffs meant the Big Pharma was not going to start predicting how they could affect the company.
“We don’t have the policy details for sectoral tariffs and so it’s premature to speculate on the impact,” Michael said.
Across the Atlantic, Roche’s CEO Thomas Schinecker said that, for now, the Swiss drugmaker will “continue to look at the science” and whether a potential deal “makes financial sense.”
However, Schinecker added that if the threatened tariffs do eventually come into force, Big Pharma in general could find it “more difficult to make financial sense of any M&A deals.”
“My assumption would be that you will see an industry worldwide situation where people probably reduce the effort at this stage, and we'll see how things develop,” the CEO added. “You know, things can change very quickly in this environment.”
Sanofi didn’t go into details of its business development strategy on its own Sept. 24 earnings call. Chief financial officer François-Xavier Roger told analysts he couldn’t discuss the impact of various future tariff scenarios as “it’s very speculative by [its] nature.”