SAN FRANCISCO — The European drug giants Sanofi SA and Novartis AG have struck separate development deals with two Cambridge companies, the first of what may be many collaborations announced this week in conjunction with the J.P. Morgan Healthcare Conference.
But the buzz this weekend among conference attendees here was the potential acquisition of Baxalta Inc. by Shire PLC for more than $30 billion. That tie-up would catapult two companies with major operations in Massachusetts into the ranks of the world’s largest biopharma players.
Baxalta rejected an offer by Shire in August, but Shire’s chief executive, Flemming Ornskov, has vowed to pursue a new bid.
This week’s alliances could extend the heavy deal activity of 2015, which saw a record $330 billion poured into life sciences mergers and acquisitions, according to data compiled by accounting and consulting firm Ernst & Young. But there is already concern that the plunge in global financial markets could dry up fund-raising and lower the prices biopharma companies can command in deals.
“We know there are cycles in the market,” said Bill Kane, senior vice president of Biomed Realty Trust, a major US developer of biopharma office and lab space.
A year ago, Shire, which is based in Ireland but operates from its US headquarters in Lexington, unveiled a $5.2 billion buyout of NPS Pharmaceuticals Inc. on the night before the opening of the J.P. Morgan conference. A repeat performance this year, with a bigger price tag, would guarantee that Shire and Ornskov will be the talk of the town this week as thousands of industry executives and investors congregate for their annual round of presentations, dealmaking, private meetings, and parties.
Meanwhile, smaller deals are being rolled out.
Sanofi is set to announce on Monday that it will expand its collaboration on cancer drugs and antibiotics with Cambridge’s Warp Drive Bio Inc., making an unspecified stock investment and agreeing to milestone payments of up to $750 million.
Warp Drive, which has about 60 scientists and researchers working in labs outside of Kendall Square, will turn over an experimental antibiotic to be developed by Paris-based Sanofi in exchange for potential royalties and milestone payouts.
The pharma giant, which launched Warp Drive in 2012 with the Boston venture capital firm Third Rock Ventures, will fund the Cambridge startup’s own early-stage clinical trials of three cancer-fighting compounds that target a mutation involved in about 30 percent of tumors. If the drugs eventually are approved, Sanofi and Warp Drive will jointly commercialize them in the United States, while Sanofi will have marketing rights in the rest of the world.
“This gives us the ability to drive the programs with the entrepreneurial values of a biotech company rather than to sit back and wait for royalty checks to come in,” Warp Drive chief executive Laurence Reid said. “And we’ll be able to participate in their commercialization in the US.”
Sanofi also owns Genzyme in Cambridge.
Switzerland’s Novartis, which has based its global research and development in Cambridge, will put as much as $170 million in upfront payments, stock investment, and near-term milestone outlays into another Cambridge startup, Surface Oncology Inc.
Surface is working on therapies that harness patients’ immune systems to fight diseases.
San Diego gene sequencing company Illumina Inc. also said Sunday it is creating a new company, Grail, to develop a blood test that could detect cancers in people without symptoms. The company is being underwritten with $100 million from a consortium that includes West Coast venture firms, including an investment company owned by Amazon.com founder Jeff Bezos.
The new partnerships follow a week of deals in the runup to the J.P. Morgan conference, including the $1.3 billion acquisition of Affymetrix Inc. of Santa Clara, Calif., by lab equipment supplier Thermo Fisher Scientific Inc., of Waltham. Charles River Laboratories International Inc. of Wilmington, a leader in contract drug research and animal testing, also weighed in with a $585 million purchase of rival WIL Research LLC, of Ashland, Ohio.
But a Shire tie-up with Baxalta, which was spun out as an independent company last summer by the health care giant Baxter International Inc., would dwarf those deals and create a major new anchor for the Boston-area industry.
Shire, which established its Massachusetts foothold when it acquired Cambridge-based Transkaryotic Therapies Inc. in 2005, hired more than 700 employees last year and now has more than 2,300 at its Lexington campus. Baxalta last fall opened its own research and development center, which already has more than 200 employees in the heart of the Kendall Square biotech cluster.
Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
Correction: An earlier version of this story misstated the value of investments Novartis is putting into Surface Oncology Inc.