Severin Schwan, chief executive of Swiss pharma company Roche, has warned of "very high" valuations in the sector in an interview with CNBC.
"Valuations are very high, and we have to consider whether we can generate value for our shareholders," Schwan said of the sector, which has seen a wave of deals in recent years.
"It's not only about science, it's not only about strategic fit, it's about price, and many of the assets we look at we are not acquiring exactly for this reason."
The Swiss company posted a 3 percent year-on-year rise in first-half sales on Thursday as demand for its oncology drugs helped offset the strength of the Swiss franc. Investors are banking on Roche's ability to retain its market-leading position in cancer medicine as it advances into the hot new field of immunotherapy, where it faces rivals such as Bristol-Myers Squibb and Merck.
When adjusted for currency fluctuations, sales rose 6 percent.
Roche reiterated its forecast for 2015 sales to grow in the low-to-mid single digit range, after stripping out currency fluctuations, with core earnings per share (EPS) growing faster.
Shares of Roche rose 1.4 percent after it posted results.