The Most Common Cognitive Biases In Life Sciences M&A
These common examples of narrow thinking can prevent decision-makers from coming up with more than one solution to a particular problem.
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Life sciences mergers and acquisitions are typically based on perceived future value rather than objective financial parameters, but the cognitive biases inherent in subjective assessments can derail deals. Executives need to take emotion out of the equation and rely on relevant data to craft successful transactions.
Outcome Capital analyzed transactional activity by the largest biopharmaceutical companies in the three-and-a-half-year period between January 2017 and June 2020 to reveal development and therapeutic areas trends.
The approval of first-generation checkpoint inhibitors, Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo in the second half of 2014, catalyzed a wave of deal-making, not only around other checkpoint inhibitors, but also for molecules and technologies that could offer synergistic benefits when used in combination with these drugs.