According to several analysts, AbbVie paid too much to beat out competitors in a bidding war. In addition, it will have to share profits with Johnson & Johnson, which owns half of Pharmacyclics’ rare cancer drug. However, as the New York Times reports, AbbVie maintains that it expects profits from Imbruvica to exceed expectations and may eventually be expanded to treat other cancers.

While the wisdom of the transaction remains up for debate, the acquisition demonstrates that pharmaceutical companies are willing to pay top dollar to acquire new drugs, particularly when profits from existing medications are expected to decline. In the case of AbbVie, it likely added Imbruvica to sustain growth when generic versions of the company’s largely profitable autoimmune disease drug Humira become available in the next few years.

Among other notable mergers and acquisitions, in February, Bristol-Myers Squibb announced plans to acquire Flexus Biosciences for $800 million, with additional payments of up to $450 million contingent on drug approvals from the U.S. Food and Drug Administration (FDA). Flexus Biosciences, a privately held company, develops immunotherapies that rely on a patient’s own immune system to fight cancer.

The same month, Valeant announced a deal to acquire Salix Pharmaceuticals, which is valued at a $14.5 billion. The transaction, which represents Valeant’s largest acquisition to date, could be extremely profitable if Salix’s irritable bowel treatment wins FDA approval later this spring.

As highlighted by the recent deals, the pharmaceutical industry continues to consolidate. According to a recent report by PricewaterhouseCoopers LLP, the value of mergers and acquisitions in the pharmaceutical industry increased 4.1 percent in 2014 from 2013. Meanwhile, the volume of M&A transactions spiked 37.5 percent. With 17 deals totaling $105 billion announced in the fourth quarter of last year, the industry shows no signs of slowing down. One solid example is Fibrogen, an October Goldman Sachs IPO at $18 a share, which presently trades in the $30 range. Fibrogen has been described by one analyst as a company with “reverse negative cash flow” which is a clever way of saying that it is unusual for a company with products still in the FDA review process to be cash flow positive and with a significant amount of capital even before its IPO. Fibrogen recently announced that on March 26th it will be releasing its results for the past fiscal year. It will be interesting to see how Fibrogen and other developing Biotech companies continue to fare in the present Biotech industry acquisition frenzy, and whether they succumb to what appear to potentially overpriced acquisition deals or chose to wait until their products prove out their potential values.

“The increase in the number of approvals will help the pharmaceutical and life-sciences industry to continue down the path toward more deals, as the newly approved products will generate additional funds that companies can use to acquire assets,” PwC’s report predicts.