The trends driving merger and acquisition activity in the biotechnology industry continued in 2007, even though both the number of deals and the average size of the deals fell, according to Burrill & Company in its annual report on the industry. Burrill in its “Biotech 2008 – Life Sciences: A 20/20 Vision to 2020,” reports that the number of deals dropped to 210 from 216 in 2006. At the same time, the average deal value dropped to $779 million in 2007 from $907 million the previous year. But there’s no reason to think robust M&A activity will continue. Big pharma continues to feel the pressure from both a dearth of new drug approvals and generic competition as the clock runs out on the patents of some of the industry’s must lucrative drugs. At the same time, the challenging environment for initial public offerings continues to make M&A an attractive exit strategy for emerging companies and their investors. One area that did heat up in 2007 was diagnostics, which after a muted 2006 saw a total of 15 deals in 2007 with six of those transactions in excess of $1 billion.