This article is a sample from the DealForma Annual Deal Trends Report provided to database subscribers. Data for this analysis was compiled using the DealForma biopharma deals database. We applied initial filters for mergers and acquisitions, therapeutic areas, asset stages at M&A, 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.
Life sciences M&A was closely watched in 2019, especially after starting off the year with Bristol-Myers Squibb’s $74 billion buyout of Celgene. Industry watchers were not disappointed as the year closed with 229 announced deals valued at $241 billion, capping one of the best years for life sciences M&A activity over the past 12 years. A second megadeal, AbbVie’s $63 billion takeout of Allergan in June, bolstered the numbers, but it was Big Pharma’s continued drive to acquire biotech innovation that drove real excitement in the space.
This was evidenced very early in the year as Roche announced it would pay $4.3 billion for Spark Therapeutics, making a strong foray into gene therapies, and Eli Lilly bought Loxo Oncology for $8 billion.
We looked at DealForma’s extensive database to see how 2019 shaped up in more detail. The total M&A deal value of biopharma therapeutics and platforms, diagnostics, and medtech companies rose 36 percent over 2018 while deal volume dropped 19 percent from the previous year. Most of the value was in cash and equity upfront with only 6 percent contingent on milestones.
Average upfront cash and equity of 2019 M&A deals at $2.3 billion was almost double the average upfront cash and equity of 2018 M&A deals at $1.3 billion. This is due in large part to the two megadeals, whereas median upfront cash and equity rose 22 percent in 2019 to $180 million and was bolstered by a spate of mid-size high value deals in the fourth quarter of 2019.
Indeed, at the start of the fourth quarter of 2019, biotech was in the doldrums, but was lifted by a spate of deals that emphasized biotech’s promising new technologies and came at premiums often exceeding 100 percent:
|Acquirer||Target||Technology||Stage at Acquisition||Total Deal Value ($M)||1-Day Share Price Premium (%)|
|Sanofi||Synthorx||Cell therapy / Immunotherapy||Phase I||2500||172%|
|UCB||Ra Pharmaceuticals||Small molecule / Autoimmune||Phase III||2100||112%|
|Astellas||Audentes Therapeutics||Gene therapy||Phase I||3000||110%|
|Merck||ArQule||Small molecule / Cancer||Phase III||2700||107%|
|Novartis||The Medicines Company||RNA therapies||Phase III||9700||85%|
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Specifically for Biotech, Pharma, Device, and Diagnostics
Private Biopharma M&A
Of the 25 deals valued at $1 billion and above, only three were for private biotech companies: Merck’s acquisition of Peloton Therapeutics, a mid-stage developer of small molecules targeting renal cancer for $1.05 billion in upfront cash and another $1.15 billion dependent on the achievement of specific milestones; Roche’s acquisition of Promedior, a mid-stage developer of small molecule pulmonary therapies, for $1 billion in upfront cash and up to $390 million in potential milestones; and Ipsen’s acquisition of rare disease play Clementia Pharmaceuticals for $1.04 billion in upfront cash and another $263 million in potential milestones.
But private biopharmaceutical companies continue to make up about 30 percent of all M&A transactions, on par with contract development, manufacturing, and services companies.
In 2019, 64 private biotech companies were acquired for a total deal value of $14.4 billion, $5.8 billion upfront and $8.6 billion in contingent payments, an almost 22 percent drop from the 82 private biotech acquisitions in 2018. Still it should be noted that median M&A upfront for these companies rose 48 percent to $62 million from $42 million in 2018.
Small and Mid-Cap Biopharma M&A
Mid Cap biotech companies continue to account for only a handful of deals, and while the number of small cap biotech targets has grown, the total deal value of small and mid-cap biopharma M&A dropped 63 percent to $42.7 billion in 2019 compared to $113.9 billion in 2018. Again the median upfront cash rose 62 percent to $985 million in 2019 compared to $607 million in 2018.
Biopharma M&A in 2020?
How does this bode for M&A activity in 2020? Though the biotech industry’s original members lost Celgene in 2019, the remaining class of Big Biotechs — Amgen, Biogen, Gilead Sciences, along with Regeneron and Vertex — have weathered the ups and downs of drug development and remain strong. And there is a rising class of mid- to large-cap companies that could be takeover targets: Alnylam, Sarepta, BioMarin, to name a few. Positive data from trials of emerging gene therapies, RNAi therapies, and cell therapies bode well for a strong year for the industry as years of research are bearing fruit with the advent of medicines that have the potential to improve patients’ lives and cure disease.
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
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.
The top deal upfront for October 2021 was the Xencor – Janssen deal for plamotamab and XmAb bispecific antibodies and new XmAb B-cell targeting bispecific antibodies for CD20-expressing hematologic malignancies. Xencor will receive $100M in upfront cash, $25M in an upfront equity investment, and is eligible for up to $1.18B in dev., reg., and sales milestones, plus tiered mid-teens to low-twenties royalties.
The top deal upfront for September 2021 was the REGENXBIO – AbbVie deal for RGX-314 for wet AMD, diabetic retinopathy, and other chronic retinal diseases. REGENXBIO will receive $370M up front and is eligible for up to $1.38B in milestones, plus tiered royalties on net sales of RGX-314 outside the US and 50% of profits in the US.
August 2021 Top Biopharma Deal: RemeGen – Seagen HER2-targeted ADC, Disitamab Vedotin for Solid Tumors
The top deal upfront for August 2021 was the RemeGen – Seagen deal for HER2-targeted ADC disitamab vedotin for solid tumors. RemeGen will receive $200M in cash up front and is eligible to receive up to $2.4 billion in milestones, plus tiered, high single-digit to mid-teen royalties.
Top Biopharma Deal July 2021: Arvinas – Pfizer ARV-471 PROTAC Protein Degrader for ER+/HER2- Breast Cancer
The top biopharma deal upfront for July 2021 was Arvinas and Pfizer’s partnership for PROTAC protein degrader ARV-471 ER+/HER2- breast cancer. Arvinas will receive $650M in cash up front, $350M in an equity investment, and is eligible to receive up to $1.4 billion in milestones, plus a 50% cost and profit split.
The top biopharma deal upfront for June 2021 was iTeos and GSK’s partnership for anti-TIGIT mAb EOS-448. iTeos will receive $625M up front, up to $1.45B in milestones, a U.S. profit split and ex-U.S. tiered royalties.
Top Biopharma Deal May 2021: Agenus – BMS for AGEN-1777 Bispecific Anti-TIGIT Antibody for Non-Small Cell Lung Cancer
The top biopharma deal upfront for May 2021 was Agenus and BMS’ partnership for anti-TIGIT mAb AGEN-1777. Agenus will receive $200M up front.
Top Biopharma Deal April 2021: CRISPR – Vertex for CTX001 for Sickle Cell Disease and Transfusion-Dependent Beta-Thalassemia
CRISPR Therapeutics and Vertex Pharmaceuticals amended their 2015 deal to develop and commercialize gene editing therapies. This expansion is for Phase I/II CTX001 for severe sickle cell diseases and transfusion-dependent beta-thalassemia. CRISPR will receive $900M up front, up to $200M in milestones upon the first regulatory approval, and a cost/profit split of 40%.
Debiopharm granted Merck exclusive, worldwide rights to develop and commercialize Xevinapant in Phase III for advanced squamous cell carcinoma of the head and neck. Debiopharm will receive EUR188M ($227M) up front and is eligible for up to EUR710M ($856M) in milestones, plus royalties. This was the largest upfront cash and equity for a partnership signed in March 2021.
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.
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