The strategy in pharmaceuticals has switched from blockbuster M&A deals towards smaller targets. This trend highlights increased drug approvals by the FDA. Drug approvals have continued to grow year on year.

"We expect approvals to remain relatively strong in the intermediate term, despite lagging during the first four months of 2016," Fitch reported.

Related Link: What's M&A Like In The Biotech Sector Right Now?

Big pharma is looking for smaller biotech and therapeutics companies to increase their drug portfolios. With big M&A deals being in a very critical environment, this seems to be the winning strategy for large firms. Even with acquisitions, companies will still focus on "innovative treatment platforms" due to "positive trends in drug development pipelines, new product commercialization and moderating patent expiry risks," Fitch noted.

Recent Big Pharma acquisitions

• Pfizer Inc. (NYSE: PFE) announced it would buy Anacor Pharmaceuticals Inc. (NASDAQ: ANAC).

• Bristol-Myers Squibb's Co (NYSE: BMY) acquisition of Padlock therapeutics.

• Eli Lilly and Co's (NYSE: LLY) acquisition of Glycostasis Inc.

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