While the biotech M&A market is down from the juggernaut of deals done in 2019 and their high valuations, that could change later this year, assuming the Federal Reserve lowers interest rates and there is more clarity on the "Most Favored Nation" drug pricing policy being pushed by the Trump administration.
So far in 2025, there have been just 12 deals done so far worth $35B in transaction value, according to data from Oppenheimer. In 2019, there were 20 deals worth $251B. While there were 30 deals done in 2024, they were only worth a total of $45B.
Michael Margolis, senior managing director and head of healthcare investment banking at Oppenheimer, said that the "irrational exuberance" in the M&A market has long been over and is now dealing with a "hangover" due to higher interest rates. He added that many thought with former FTC Chair Lina Khan out earlier this year with the new administration, it would lead to more deals but that hasn't happened yet.
However, he is hopefully that the Fed will lower its policy rate in September, which would spur M&A activity. On Wednesday, the Fed said it was keeping rates steady for now.
Margolis was speaking at a panel discussion on the future of biotech investing at the BIO International Convention in Boston on Thursday.
He sees M&A improving, but there will be "less public and private companies [in transactions]" because investors and acquirers will be more picky but they "will make sure the right companies get the right capital."
Margolis added that dealmaking is being hampered because of uncertainty regarding the "Most Favored Nation" policy that would tie drug prices to lower prices around the world.
He'd also like to see a return of stability at the FDA, adding there is a lot of "noise" coming from the agency, making it difficult to assess risk "when the bar is changing." He called on Commissioner Makary to "create a set of rules, or at least a set of guardrails."
While biotech has gone through a "nuclear winter" in terms of dealmaking, investors and companies are waiting on the sidelines to deploy capital once there is more certainty, according to Andrew Lam, managing director and head of biotech private equity at Ally Bridge Group. "Stronger companies will emerge out of this."
Companies will want to deals in a more efficient and cost-effective manner than in the past, added Nandita Shangari, managing director at RA Capital.
Dealmaking will eventually pick up because growth at many large pharmaceutical companies is expected to slow dramatically in the coming years as key drugs go off patent, noted Rami Rahal, a partner at MPM BioImpact. "Fundamentally, they will need new revenue-generating products."
TheRoosevelt Hotel migrant shelter is set to close Tuesday – three years after it opened and quickly became a symbol of the city’s migrant crisis in the heart of Manhattan.
There were fewer than 10 families of asylum seekers still in the former hotel as of Thursday, as the spot spent its final days as a migrant intake center in a very visible and highly trafficked area of midtown packed with tourists and commuters, The Post has learned.
The historic hotel has been the first stop for many of more than 230,000 migrants that have come to the five boroughs since 2022. During the peak of the crisis, the shelter housed as many as 2,900 people on the taxpayers’ dime, according to officials.
The Post observed around a dozen or more workers or shelter residents leaving the building this week.
“I imagine that they are cleaning and making repairs now to give the building back to the owner,” said one female asylum seeker from Venezuela, who asked not to use her name.
She hadn’t landed a new place to stay since she left the shelter last week, she said.
People removing bags from the migrant shelter.Christopher Sadowski
“To be honest, the situation is complicated because they are closing most of the shelters. I sleep where the night takes me. Sometimes in the street. My fate is in God’s hands,” she said.
The shelter has been plagued with issues since it opened in May 2023 – with police sources saying the Venezuelan street gang Tren de Aragua organized moped robbery crews from the hotel.
There are fewer than ten migrant families still in the hotel as of Thrusday.Christopher Sadowski
“Out of 100 men coming from Venezuela, 80 are bad and 20 are good,” one migrant outside the Roosevelt told The Post earlier this week. “The problem is that the good people get screwed and pay the price for the bad people.”
The Postpreviously reportedthat the hotel could sell for as much as $1 billion after migrants move out. A source told the Post that the property owner – the Pakistani government’s Pakistan International Airlines – were considering replacing the over 100-year-old hotel with a new skyscraper.
It is unclear whether the hotel will begin welcoming guests again.
The Adams administration has inked a nearly $1 billion no-bid contract with the hotel industry for emergency shelter space — despite boasting that the migrant crisis is tapering off, The Post has learned.
Taxpayers are on the hook for the $929.1 million reupped with the Hotel Association of New York City Foundation as the total city population still includes a whopping 86,000 people, including homeless individuals and asylum seekers.
“These hotel units will be used by social services vendors to house emergency shelter clients who have entered the [Department of Homeless Services] shelter system,” the agency said in a notice posted Wednesday.
The Adams administration has signed a $1 billion no-bid contract with the hotel industry for emergency shelter space .Robert Miller
The reupped contract took effect in January and runs through June 30, 2026. It was awarded via “negotiated acquisition” – meaning it was not put out for competitive bids. The initial contract was negotiated through the end of 2025, as previously reported by The Post.
The move is a head-scratcher, said Nicole Gelinas, senior fellow at the Manhattan Institute.
“Why do we need to be using so many hotels for day to day homeless management?,” Gelinas said. “This is turning an emergency program into a permanent program and taking a block of hotel rooms off the tourist market while people complain the city’s hotel room costs are so high.”
Gelinas said the city should have made hotels bid against each other instead of treating the hospitality industry “as a monopoly” with a sole source contract.
Under the new contract, it’s up to the Hotel Association as a “fiscal agent” of the program to connect the city with hotels that are willing to set aside rooms to shelter homeless individuals and families in exchange for rental payments.
The deal comes as the shelter at the Roosevelt Hotel is set to end next week.William C Lopez/New York Post
The overall cost to house migrants per night is $352 — including $130 to hotels for the room rental, city officials said last year. The association takes a “nominal fee” for administrative expenses, its CEO said.
“This agreement is an extension of the non-profit HANYC foundation’s ongoing work since COVID to connect city funding with hotels to address New York’s need to provide emergency services to the homeless,” said Hotel Association CEO Vijay Dandapani.
“The foundation began providing this service five years ago pro-bono and only takes a nominal fee for limited administrative expenses in order to ensure taxpayer money is spent efficiently.”
Dandapani said the $929.1 million is the maximum authorized but not guaranteed to be spent under the contract, and noted the city’s spending on these services “has declined steadily over the last two years.” The contract comes as the trade group is lobbying city lawmakers to slash the hotel occupancy taxon tourists from 6% to 3%.
The city began relying more extensively on hotels for emergency lodging and shelter during the COVID-19 pandemic, to help contain the spread of the deadly bug, a trend that dramatically expanded during the peak of the migrant crisis, when 4,000 asylum seekers flooded the Big Apple each week.
The Adams administration defended extending the emergency contract with hotels, saying the Big Apple is still grappling with a high shelter population compared to the pre-pandemic year 2019, when there were 61,415 people in shelters.
The number hit as high as 140,134 in January 2024, a staggering 127% from two years prior, according to a report issued by state Comptroller Tom DiNapoli.
Under New York’s right to shelter policy, the city must provide emergency shelter to all who need it, sources said.
There are currently 95,000 people living in taxpayer-funded shelters in New York City.Rob Jejenich / NY Post Design
The city said it has now spent $3.12 billion on shelter and related costs to house migrants since the crisis began in 2022, including costs to rent hotel rooms.
“As the city’s shelter system was pushed to its limits following an influx of new arrivals, the Adams administration acted quickly and decisively to effectively address the crisis and acquire emergency shelter capacity to serve households in need,” a Department of Social Services/Homeless Services spokesman said.
“While the administration’s whole-of-government response to the crisis has significantly reduced the number of households living in shelter, the total shelter census still far exceeds pre-pandemic highs.”
Some 150 hotels in the five boroughs sheltered migrants in tens of thousands of rooms at the peak of the migrant crisis set off in the midst of an influx at the southern border during the administration of former President Joe Biden.
The historic Roosevelt Hotel in Midtown Manhattan became a very visible symbol of the city’s struggles to contend with the influx of migrants into the city. Roosevelt was used as an intake center near tourist hot spots and in an area packed with commuters while “tent cities” plagued by issues including crime popped up elsewhere in the five boroughs.
But Mayor Eric Adams announced the phase-out and closure of the city’s largest emergency shelters in recent months — including the massive tent encampments at Randall’s Island and Floyd Bennett Field. The closure announcements came as the number of new arrivals plummeted and some asylum seekers were moved outside of the Big Apple.
People removing bags from the Roosevelt Hotel ahead of the closure on June 18, 2025.Christopher Sadowski
President Trump returned to office in January, launching a border crackdown and taking a hardline stance on illegal immigration, which has further fueled the slowing influx into the city. Illegal border crossings have slowed to a trickle under beefed up enforcement — from a peak of 4,000 per week to just a few hundred.
Locally, dozens of hotels that were used as migrant shelters were slowly phased out and transitioned back to lodging tourists, including those in Times Square and around John F. Kennedy Airport and LaGuardia Airport.
The controversial move to pay hotels to house migrants has sparked some friction between Mayor Adams and the president — after the Trump administration in February yanked $80.5 million in federal funding sent to the city after Elon Musk and the Department of Government Efficiency deemed the money was being wasted on “luxury hotels” to house illegal immigrants.
City Comptroller Brad Lander discovered the funding — approved by Congress and former President Joe Biden — had been pulled back from its accounts. Adams sued Trump in federal court to recoup the $80.5 million, denying the space was “luxury.”
Part of the federal funding offered the city $12.50 a night reimbursement for each hotel room. City officials denied that migrants were getting luxury accommodations.
