Half Yearly M&A Roundup 2019

June 19, 2019
Investment Banking

 

The acquisitions and mergers started just seven days into the year.  2019 saw the start-off with two deals running into billions of dollars with one of them at a record USD 82 billion. The deal was among the all-time top ten!

Fourteen deals in the biopharma sector took the M and A total to USD 173.326 in billions for the half-year according to the CRG- Chimera Research. While CRG does not add the deals in technology and tools in the sector in this figure, the tech and tools M and A deals had 2 with a total of USD 22.7 between them. Again, the deals completed and announced earlier like Takeda Pharmaceuticals purchasing of Shire at GBP 46 billion is not factored in these figures. 

If one looks at the top ten bio-pharma announced/completed M and A deals the half-year statistics show a total value surpassing the USD 250 billion marks very easily. In comparison to the half-year statistics of 2018 valued at USD 170.2 in billions over the top ten deals 2019 has a 47 percent increase in value according to the GEN’s List January-June 2018 Top 10 M and A Deals.

According to Deloitte’s Center for Health Solutions, the key factor responsible for the R and D in the biopharma sector is that traditional methods like in-house R and D have shown poor ROI. In keeping with this trend, the fall recorded was 1.9 percent in 2018, in 2017 3.7% and in 2010 10.1% when Deloitte started the study. Deloitte attributes the decline to the increasing median costs for gaining market approvals especially for treatments that are new. Such diminishes in the ROI effectively mean drug developers use M and A to fill their pipelines and expend the range of portfolios of marketed drugs where they face an exclusivity loss.

In keeping with this premise, the May 8th deal of Novartis’ buying IFM Tre, saw 2 programs of the non-clinical type and 1 of the clinical type in the pipeline expansion. The programs focus on inhibiting targets related to chronic inflammation of the underlying immune system. This large deal was considered too small to be reflected in the list of Gen A’s top-10. And this deal was valued USD 1.575 billion!

The top tech/tools deals:

Here’s a peek at the deals that found a place on the list by Gen A.

  • Catalent bought Paragon Bioservices’ gene-therapy capacities at USD1.2 billion completing the deal on 19th May.
  • Clementia Pharmaceuticals’ buying-license of 2014 for a drug treating rare diseases from Roche, was acquired by Ipsen and the deal completed on 19th April was valued at USD 1.31 billion. 
  • The pending merger of Pacific Biosciences with  Illumina valued at USD 1.2 billion was anticipated to be delayed. In this case, the Authority for Markets and Competition in the UK flagged on 18th June the issue of anti-competitiveness in its first phase of investigations which could now last another investigative round.
  • Exonic Therapeutics was bought on 6th June by Vertex for USD 1 billion. Vertex plans to cash in on the genetic neuromuscular diseases range and the CRISPR-based Duchenne muscular dystrophy treatment was just right for it.

The Gen A’s list:

The top M and A list in the first six months of 2019 include the value of the deal in USD, with details of the acquirer, acquire, deal status, and the reason for the deal. The details therein are in keeping with tech/ tools and drug developer’s disclosures. Only whole company purchases are considered excluding specific drug rights like the Astra Zeneca deal of USD 6.9 in billions for global commercialization and development of DS 8201 aka trastuzumab deruxtecan through Daiichi Sankyo’s agreement, and the 1st July purchase deal of Novartis from Takeda of 5%- lifitegrast solution for ophthalmics-Xiidra®.

The list of the top ten includes: 

  1. The 24th June Bristol-Myers Squibb’s acquisition of Celgene for USD 74 billion.
  2. The 25th June AbbVie’s acquisition of Allergan for USD 63 billion.
  3. The 7th January Takeda Pharmaceutical’s acquisition of Shire for USD 58.6 billion.
  4. The 25th February Danaher’s acquisition of GE BioPharma for USD 21.4 billion.
  5. The 17th June Pfizer acquisition of Array BioPharma for USD 11.4 billion.
  6. Eli Lilly’s 15th Feb acquisition of Loxo Oncology for USD 8 billion.
  7. GSK’s 22nd January acquisition of Tesaro for USD 5.1 billion.
  8. Roche’s 10th June acquisition of Spark Therapeutics for USD 4.8 billion.
  9. The third quarter scheduled Merck & Co acquisition of Peloton Therapeutics for USD 2.2 billion.
  10. The 1st May completed Thermo Fisher Scientific acquisition of Brammer Bio for USD 1.7 billion.

In parting, if you are impressed then come to Imarticus Learning for a career in M&A.

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