"Life sciences CEOs realize that it makes sense to find partners with capabilities in research to help bring products to market, whether that is through working with startups or venture partners or looking at technological solutions," Carole Streicher, KPMG’s deal advisory leader for healthcare and life sciences, said in a statement.

How do U.S. life sciences companies’ CEOs plan to achieve growth objectives in the next few years? One word—deals—a recent survey by KPMG has found.

About 43% of U.S. biopharma CEOs have a "high appetite" for M&A, an increase from 33% a year ago, KPMG's annual Global CEO Outlook survey found. The poll, carried out with CEOs in a variety of business sectors, included 193 in life sciences and 44 based in the U.S.

Low interest rates and favorable stock valuations were cited as top reasons why U.S. drugmakers are on the hunt for deals, be they licensing deals, partnerships or outright buyouts. But when all CEOs around the globe were counted, 44% referred to business-model transformation as their leading M&A driver, followed by improving market share and cheap financing, both standing at 39%.

These motivators could be found in several major biopharma M&A deals lately. Take GlaxoSmithKline’s $5.1 billion purchase of Tesaro. The biotech's shares were suffering on the slow ramp-up of its PARP inhibitor Zejula, giving the British pharma a chance to snatch it—arguably at a bargain. And buying a commercial-stage oncology specialist not only gave GSK an existing sales team but also boosted its cancer pipeline, which fits CEO Emma Walmsley’s newly found appetite for the oncology market.

Takeda CEO Christophe Weber went against some members of the Japanese pharma's founding family and bought Shire, all for the goal of further globalization. AbbVie, which has started to see declines in its bread-and-butter blockbuster Humira, shelled out $63 billion for Allergan to diversify beyond its existing focus areas. In the Pfizer-Mylan deal that represents transformations for both companies, Pfizer is offloading some mature products to focus on innovative drugs, and Mylan is buying a much wider global footprint and experienced sales teams

Eli Lilly went after Loxo Oncology to beef up its presence in cancer treatment, just as Amgen is paying $13.4 billion for Celgene’s Otezla to secure a larger share of the psoriasis market alongside old TNF drug Enbrel.

Meanwhile, cost-cutting was also a key factor in driving M&As, cited by 39% of CEOs from both U.S. and abroad in the KPMG survey. Even in the Shire deal, which saw Takeda take on a huge and controversial debt load, the company is expecting annual savings of about $2 billion by the end of 2021.

Bristol-Myers Squibb, in its $74 billion acquisition of Celgene, said it’s looking at about $2.5 billion in "synergies," which could mean layoffs; after all, it’s a combination of two of the world’s largest cancer drug players. And even in a merger of two vastly different companies, portfolio-wise, AbbVie said it has identified $2 billion in potential cost cuts with Allergan.

In general, U.S. biopharma leaders are increasingly looking outside for near-term growth. According to the accounting firm, 41% of the CEOs surveyed ranked third-party alliances as the most important approach, above organic growth’s 25% or M&A’s 14%. Those who ranked partnerships as their top choice rose 26 percentage points compared with a year ago, while organic growth fell 18 points.

Almost all biopharma majors have their own venture branches. For example, this year’s FierceBiotech Fierce 15 winner Kymera Therapeutics, which is exploiting the body’s protein degradation machinery to remove disease-causing proteins, counts Amgen, Lilly, Pfizer and Sanofi venture arms among its investors.

The KPMG survey also found 61% of life sciences companies said they consider innovation accelerator or incubator programs as potential growth opportunities, as 57% use corporate venture funding.

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