Regulatory headwinds amidst M&A boom in Irish life sciences

By April Lara

September 12, 2024

Irish life sciences sector

Ireland’s life sciences sector is experiencing growth in mergers and acquisitions (M&A) activity, with global pharma and medical device companies driving much of the interest. There is an increase in M&A activity, with both international pharma giants and private equity firms eyeing Ireland as a gateway into the European market.

The recent €1.3 billion acquisition of Amryt Pharma by Italy’s Chiesi Farmaceutici in December 2023 stands out as one of the biggest deals in the industry, accounting for the bulk of the €1.5 billion total value of life sciences M&A transactions in Ireland for the year. Pfizer, AbbVie, and GSK, major players in Ireland’s pharma ecosystem continue to drive the industry’s reputation globally.

Ireland also has built a solid presence in life sciences domestically. The clustering of businesses in the west and midwest has cultivated a skilled talent pool that makes the country an attractive destination for investment. Ireland’s mix of English-language fluency, legal similarities with the US, and longstanding government support have solidified its status as a preferred destination for global companies.

However, new regulatory developments pose challenges. The Screening of Third Country Transactions Act 2023, while enacted, is yet to be tested and could significantly impact future US and UK investment. Growing EU regulations in areas such as digital health, medical devices, and data protection are adding pressure on companies, particularly smaller, innovative firms.

As competition law enforcement intensifies, the Competition and Consumer Protection Commission (CCPC) is examining deals more closely, especially in business-to-consumer transactions. Companies will need to stay vigilant, as regulatory scrutiny in Ireland is expected to increase across multiple fronts, from data privacy to artificial intelligence (AI).

AI is already changing the life sciences industry, particularly in diagnostics and research. Companies like ICON, a leading provider of clinical research services, are using AI for early-stage cancer diagnosis and clinical trials, though concerns remain over the risks of AI errors.

Life sciences companies operating in Ireland face growth opportunities and regulatory challenges in this evolving landscape. While M&A remains a significant pathway for global pharma firms to enter the European market, staying ahead of regulatory developments will be vital for long-term success.