Activity was down in the biopharma sector last year, with only 34 transactions totaling $38 billion, according to JMP Securities, compared with 60 deals worth $133 billion in 2016, and 74 deals worth $174 billion in 2015.
Improving clinical success rates and advancements in science among small and midsize companies will likely attract large companies looking to bolster their innovation pipelines, JMP Securities wrote in a December research note.
Plus, many big companies will have more money to spend. Pharmaceutical companies have some of the largest stockpiles of overseas cash. The tax law President Donald Trump signed last month makes it cheaper for multinational companies to repatriate foreign cash, and they could use that money to fund transactions.
The windfall may not cause companies to completely reverse their corporate strategies, but it could nonetheless make it easier to justify pursuing any mergers or acquisitions. Of course, no one completely knows exactly who will pursue what until it's announced.
The J.P. Morgan Healthcare Conference, which starts Monday, is a hotbed for deals. Here are some companies to keep an eye on.