This year was a watershed one for biopharma M&A, with several multibillion-dollar deals announced thus far.
M&A activity in 2019 kickstarted with a big deal. Bristol-Myers Squibb Co BMY 0.36% agreed to buy Celgene for $74 billion in cash and stock, and the deal was consummated in late November — although there were several nervous moments en route to regulatory clearance.
Mega Deals, Record Numbers
The number of U.S. pharma and biotech deals grew year-over-year from 365 in 2018 to 484 by early November 2019, with the size of the year’s deals being the noteworthy aspect, MarketWatch reported, citing Dealogic.
M&A transaction value in the sector totaled $342 billion — the highest since 1995, when Dealogic began tracking deals.
M&A volume reached $190 billion globally in the first half of 2019, higher than the full-year numbers many of past years, according to data compiled by HBM Partners.
Source: HBM Partners
Key Takeaways
The main motives for biopharma M&A deals are the quest for reinvigorating growth through product innovation, compensating for lost revenue from patent expirations and unlocking synergies.
Apart from mega-sized deals, bolt-on acquisitions of start-ups were also common in 2019.
Merck & Co., Inc. MRK 0.24% made the $300-million purchase of Immune Design; the $1.05-billion buy of Peloton Therapeutics just ahead of its planned IPO; the $773 million spent on privately held Tilos Therapeutics; and the recently announced $2.7 billion deal to buy ArQule, Inc. ARQL 0.42%.
Oncology, specifically immuno-oncology, was another hot therapeutic area that attracted interest, as evidenced by the Celgene deal and Eli Lilly And Co LLY 0.94%‘s Loxo purchase.
Apart from buyouts, several multibillion-dollar oncology partnerships have also been struck, such as AstraZeneca plc AZN 1.14% payment of up to $6.9 billion for DAIICHI SANKYO/S ADR DSNKY 0.74%‘s lead antibody drug conjugate [fam-] trastuzumab deruxtecan, or DS-8201, which is being developed for multiple HER2-expressing cancers.
After Novartis AG NVS 0.35%‘s 2018 purchase of AveXis, which brough the spinal muscular dystrophy treatment Zolgensma into its stable, the gene therapy deal flow continued in 2019.
Roche Holdings AG Basel ADR RHHBY 1.05% completed its acquisition of Spark Therapeutics Inc NASDAQONCE.
ASTELLAS PHARMA/ADR ALPMY 1.3% recently announced a deal to buy Audentes Therapeutics Inc BOLD 0.1%.
Speculation is rife that many gene therapy names with advanced pipeline candidates could be ripe for buyouts.
Companies specializing in other emerging therapeutic areas such as RNA interference-based therapies were also in the spotlight in 2019.
Novartis was lured by The Medicines Company MDCO 0.04%‘s lone pipeline asset, inclisiran, which is a small interfering RNA therapeutic candidate that has the potential to lower LDL-C.
Sarepta Therapeutics Inc SRPT 7.91% entered a licensing deal with Roche for its DMD gene therapy that could net the former up to $2.85 billion.
Notable Deals Of 2019
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