Wall Street is holding its breath for the rekindling of mergers and acquisitions across the biotechnology and pharmaceutical sector after 2017 led to a pause in deal-making. Tax reform, particularly a lower levy on US companies’ overseas cash, may be the key to driving the return of M&A in 2018.

“Choppy waters will likely continue, unless M&A saves the day,” RBC analysts led by Brian Abrahams wrote in their look ahead to next year.

Goldman analysts led by Jami Rubin see a lower tax rate on repatriated cash, yielding about $160 billion (Dh587.5 billion) across the health-care sector. That extra cash may be used for “aggressive capital allocation”; in addition to M&A, that cash could also be spent on buybacks and dividends, or a combination of the three Goldman predicted.

Pfizer Inc., instead of announcing a new mega-deal, is ending the year by starting a $10 billion share buyback programme and an increased dividend.

Still, some analysts are hopeful after Roche’s $1.7 billion bid earlier today for Ignyta. JPMorgan’s January health-care conference in San Francisco is often a platform for partnerships and deals to be announced.

See Gadfly on How Pfizer Shareholders Are Already Enjoying the Tax Cuts

Concern also abound that Democratic wins in midterm elections may once again raise a rallying cry around drug pricing reform, driving a return to uncertainty in the sector similar to years past when Hillary Clinton’s tweets rocked the market.