The aggregate value for healthcare M&A fell sharply in the second quarter, both compared to the first three months of the year and the year-ago period, as the COVID-19 pandemic dampened dealmaking.

Aggregate transaction value was $12.26 billion in the second quarter, compared to $29.31 billion in the first quarter and $137.29 billion in the year-ago quarter. As of June 30, the aggregate transaction value for healthcare deals in 2020 was $37.68 billion, based on 903 deals tracked by S&P Global Market Intelligence.

Of the 20 largest healthcare deals in the quarter, seven targeted biotechnology companies and six involved pharmaceutical firms.

Danish pharmaceutical giant Novo Nordisk A/S said it will acquire biotechnology company Corvidia Therapeutics Inc. for a total consideration of up to $2.1 billion. The deal, which was announced in June, has the highest transaction value for the quarter and will add ziltivekimab — an experimental treatment for certain patients with kidney disease who are at risk of major adverse cardiovascular events — to Novo's pipeline.

Boston-based Alexion Pharmaceuticals Inc. completed its $1.40 billion acquisition of biotechnology company Portola Pharmaceuticals Inc., which manufactures blood disorder treatment Andexxa, in July. The cash transaction was announced in May and closed earlier than the initial expected completion in the third quarter.

The biggest deal for the healthcare services companies was private equity firm Bain Capital Pvt. Equity LP's planned acquisition of Japan-based nursing home operator NichiiGakkan Co. Ltd. for $1.31 billion. The deadline for the bid has been extended for the second time and will now expire Aug. 3.

Hong Kong's LIM Advisors Ltd., which represents various investment funds that are stakeholders in NichiiGakkan, believes the offer is undervalued at ¥1,500 per share and said a fair price would be about ¥2,400 per share.

The largest pharmaceutical company deal was completed by PTC Therapeutics Inc. for $538.4 million. The South Plainfield, N.J.-based biotechnology company, which develops and commercializes treatments for rare disorders, closed the acquisition of privately held Censa Pharmaceuticals Inc. in June. Censa is developing CNSA-001, or sepiapterin, to treat certain orphan metabolic diseases including phenylketonuria and other diseases associated with defects in the enzyme called tetrahydrobiopterin biochemical pathways diagnosed at birth.

Danish bioscience company Chr. Hansen Holding A/S also acquired privately held pharmaceutical company UAS Laboratories Inc., which manufactures and markets probiotics and antioxidants for adults and children, for $530 million.

Mergermarket's Global and Regional M&A Report for the first half of the year said the full impact of COVID-19 manifested itself in the second quarter of the year, which saw deal volume cut down to half from 4,308 deals in the first quarter to 2,630 in the second quarter.

The first half of the year saw deal values decline 53% year over year to $901.6 billion — with activity levels similar to the ones during the Global Financial Crisis, according to Mergermarket.

Mergermarket also stated the impact of the pandemic varied around the world with China seeing the least impact on its global buying activity, with a year-over-year decline in deal count of 7% and a fall in deal values of 20.1%. In contrast, the Americas — dominated by the U.S. — was the biggest decliner and saw its share of global M&A by value decline to 33.4% in the first half of the year compared to 52.8% in 2019.

The report noted that the lockdown has affected economic productivity but the U.S is also facing high levels of political uncertainty from the upcoming presidential election and widespread, large-scale demonstrations and protests.

Mergermarket said the rest of the world saw their global market share increase due to the falloff in U.S. activity, with Europe and Asia seeing the largest market share gains. Europe now has a 32.3% market share of global M&A, while Asia has a 27.7% share.

Healthcare companies saw an uptick in debt issuances as the onset of the COVID-19 pandemic, coupled with historically low-interest rates and easy monetary policies, fueled the demand for corporate credit. Analysts have suggested that a lot of these companies have cash on hand and may deploy these strong balance sheets for acquisitions.

"Although M&A struggled, debt and equity fundraising had a strong pulse. After markets pulled back in March, they came back with a vengeance in many regions," Mergermarket noted in its report. It added that May was the busiest month for equity issuances in the U.S. since January 2019.

The pandemic may also trigger a short-term rise in strategic M&A dealmaking in the U.S. hospital and health systems sector, which was expected to lose over $200 billion between March and June, including interest from private equity to acquire flagging physicians offices.

Christopher Whaley, a researcher at policy think tank RAND Corp., said in a May interview that the pandemic "provides a potential war chest if you're thinking about going out and acquiring struggling providers." Larger hospitals and health systems may be well-positioned to weather the downturn and use strategic M&A to boost revenues, he added.