Biotech and pharma deals in 2020 soared to an all-time high of 1,154 signed deals with $146.3 billion in total value, defying expectations that the global Covid-19 pandemic would hamper dealmaking. Global healthcare and life sciences R&D partnership activity was up 23 percent over 2019 and total deal values rose 31 percent from the previous year, driven in part by advances in technological and molecular understandings of disease pathways, and a drive toward targeted precision medicines.
We tapped the DealForma database to look at biopharma partnering activity in 2020 in more detail.
The Takeaways – Biopharma Deals in 2020:
- Big Pharma and Big Biotech continued to dominate the top dealmakers lists, but several mid-stage players joined the top 20 lists, including Incyte, CSL Behring, and Daiichi Sankyo for total upfront payouts, Neurocrine for total value, and Sarepta for total number of deals.
- Total upfront cash & equity was up 16.8 percent, but average upfront cash and equity fell slightly, down 3 percent compared to 2019.
- With 276 R&D partnerships focused on Covid-19, the number of infectious disease partnerships skyrocketed 572 percent over 2019, but total values of these deals fell 40 percent, even as the total paid in upfront cash and equity soared 130 percent compared to 2019.
- Biopharma mergers and acquisitions were active as well. Check out our analysis of 2020 biotech and pharma M&A here.
Biotech and Pharma Deal Terms
Biopharma R&D partnering median upfront cash and equity paid at signing soared 50 percent in 2020 compared to 2019, but average deal values dropped 3 percent during the same period.
Deals Go Earlier and Larger
Total upfront cash and equity, at $17.4 billion, rose 17 percent for biotech and pharma deals in 2020 compared to 2019. While this looks good on the surface, the money paid at signing accounted for only 11.9 percent of total potential deal values in 2020, compared to 13.4 percent of total potential deal values in 2019. So, while the numbers and potential values were strong, deals were more back-loaded with total potential deal values contingent on the achievement of milestones as licensees made riskier bets on novel platforms where they have more say on targets of interest, and early stage assets where the licensees have more control on development.
It is interesting to note that median upfront cash and equity for platform deals jumped 95 percent in 2020 compared to 2019, while it fell 33 percent for preclinical assets. Mid- and late-stage assets also commanded a premium with median upfront cash and equity up 50 percent for mid-stage asset and late-stage deals, compared to 2019.
Cancer Remains Leading Deal Target
Biotech and pharma deals in 2020 saw 379 partnerships for cancer as the top therapeutic target for dealmaking, accounting for 38.9 percent of all deals, 55 percent of total deal values, and 57.1 percent of total upfront cash and equity. We have covered this before in detail, and DealForma database users can quickly grab the latest numbers.
Neurology / CNS Deals
Indeed, 8 out of the top 12 deals in 2020 by total deal value focused on cancer as the primary therapeutic area, while 3 focused on neurologic conditions, a fast growing area of unmet need. Total deal values of neurologic partnerships made up 18.7 percent of total deal values in 2020, up 119 percent compared to 2019, with total upfront cash and equity also up 147 percent compared to 2019, in an area that has had its share of failures but that is beginning to hold promise for success with recent advances in technological innovation.
Top Biopharma Deals in 2020 by Upfront Cash & Equity
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Specifically for Biotech, Pharma, Device, and Diagnostics
There’s every reason to think 2021 will match 2020 numbers for biopharma R&D dealmaking. A strong pace in the first half of the first quarter of 2021 has seen 132 announced collaborations with total deal values of $18.8 billion. The success of virtual partnering last year will only accelerate opportunities to partner in the years ahead with a new crop of recently launched companies in with exciting new technologies and promises of tackling once intractable diseases.
This article is a sample from the DealForma Quarterly Deal Trends Report provided to database customers. Data for this analysis was compiled using the DealForma biopharma deals database. We applied initial filters for partnerships and deal subtypes, therapeutic areas, modalities, asset stages at signing, and deal payment terms. From there, we exported the data to Excel and used pivot tables and charts to do the rest. All data are based on publicly disclosed figures. We invite you to answer interesting questions on biopharma business development and licensing using our data and carefully curated profiles on deals, pipelines, companies, funding, and business executives by visiting dealforma.com to schedule your personalized demo.
Marie Daghlian is a freelance writer and editor who reports on the business of biotechnology and healthcare technologies and on rare diseases for Global Gene’s Rare Daily. She also covers the industry for Big4Bio, a daily newsletter focused on the four major biotech centers in the United States.
More Research by DealForma
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The top deal upfront for July 2022 was the Orion co-development and co-commercialization deal with MSD for ODM-208. Orion granted MSD rights to co-develop and co-commercialize ODM-208 for the treatment of metastatic castration-resistant prostate cancer. Orion and MSD have an option to convert the co-development and co-commercialization agreement into a global exclusive license to MSD. Upon exercising the option, MSD will retain the responsibility for all accrued and future development and commercialization expenses associated with the program. Orion will receive $290M up front, including $221M recognized as income, and approximately $60.3M reserved to cover Orion’s share of ODM-208 future development cost. Orion is eligible for undisclosed development and commercialization milestones, plus double-digit tiered royalties.
June 2022 Top Biopharma Deal: Sanofi – Regeneron Pharmaceuticals for Cancer/Inflammation drug Libayo
The top deal upfront for June 2022 was the Sanofi development and commercialization deal with Regeneron for Libtayo (Amended Agreement). Sanofi granted Regeneron exclusive, worldwide rights to develop and commercialize Libtayo for the treatment of cancer. Regeneron and Sanofi signed a license agreement in 2015 to develop Libtayo. Sanofi will receive $900M up front and is eligible to receive up to a $100M milestone upon the first approval by either the FDA or EMA for Libtayo in combination with chemotherapy for first-line treatment of certain patients with NSCLC and up to $100M as a sales milestone in the next two years, plus 11% royalties.
May 2022 Top Biopharma Deal: Dragonfly Therapeutics – Gilead Sciences NK cell engager for cancer/inflammation
The top deal upfront for May 2022 was the Dragonfly Therapeutics development and commercialization deal with Gilead Sciences for solid tumors. Gilead has an exclusive, worldwide option to develop and commercialize additional NK cell engager programs by using its Tri-specific NK Engager (TriNKET) platform after the completion of certain preclinical activities. Dragonfly will receive $300M up front and is eligible to receive undisclosed opt-in payments and development, regulatory, and commercial milestones, plus up to 20% royalties.
April 2022 Top Biopharma Deal: Harbour BioMed – AstraZeneca Bispecific Antibody for Cancer Treatment
The top deal upfront for April 2022 was the Harbour BioMed development and commercialization deal with AstraZeneca for solid tumors. AstraZeneca will be responsible for all costs for development and commercialization. HBM will receive $25M up front and is eligible for up to $325M in development, regulatory, and commercial milestones, plus undisclosed tiered royalties.
March 2022 Top Biopharma Deal: IGM Biosciences – Sanofi IgM Antibody Platform for Cancer and Immunology/Inflammation
The top deal upfront for March 2022 was the IGM development and commercialization deal with Sanofi for cancer, immunology, and inflammation. IGM will receive $150M up front and is eligible to receive up to $6.015B in regulatory and commercial milestones, which includes $940M for each of 3 cancer targets and $1.065B for each of 3 immunology/inflammation targets. Additionally, Sanofi has expressed an interest in purchasing up to $100M of IGM non-voting common stock in a public financing.
The top deal upfront for February 2022 was the Heidelberg development and commercialization partnership with Huadong for HDP-101, HDP-103, and options for HDP-102 (CD37-ATAC) and HDP-104. Heidelberg will receive $20M up front and is eligible for up to $449M in milestones with additional $461M in option payments upon exercise. Additionally, Huadong will invest EUR 105M (35%) in Heidelberg, with an initial commitment of EUR 80M by purchasing 12,408,649 shares at EUR 6.44 per share.
January 2022 Top Biopharma Deal: Beam – Pfizer In Vivo Base Editing and Delivery Programs for Rare Diseases
The top deal upfront for January 2022 was the Beam Therapeutics research partnership with Pfizer with an option to license in vivo base editing programs. Beam will receive $300M up front, up to up to $1.05B in development, regulatory, and sales milestones, plus royalties per licensed program. If Beam opts in to co-develop/co-promote a program, the companies will share cost and profits 65%/35% (Pfizer/Beam).
December 2021 Top Biopharma Deal: Foghorn – Loxo using Gene Traffic Control for New Oncology Treatments
The top deal upfront for December 2021 was the Foghorn – Loxo (Eli Lilly) partnership for Foghorn’s Gene Traffic Control platform. Foghorn will receive $300M up front, a $80M upfront equity investment, and up to $1.3B in potential milestones, plus a US cost/profit split and ex-US royalties.
November 2021 Top Biopharma Deal: Sanofi – Owkin artificial intelligence and federated learning platform to advance Sanofi’s oncology pipeline
The top deal upfront for November 2021 was the Owkin – Sanofi artificial intelligence and federated learning platform research partnership to advance Sanofi’s oncology pipeline. Owkin will receive a $180M upfront equity investment, $90M in R&D funding over 3 years, and is eligible for additional undisclosed R&D milestones.
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