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Insight & Intelligence™ : Jan 20, 2014

Top 25 M&A Deals of 2013

Find out which big fish were devoured by larger ones last year.
  • Alex Philippidis

Following is a list of the 25 largest merger and acquisition (M&A) deals disclosed in 2013 by drug developers, tools/tech companies, and CROs, ranked by deal value in U.S. dollars. Each acquired company is listed along with its acquirer or prospective acquirer, the price, the status of the deal—has it been completed, or simply announced?—and the percentage premium of the deal price to investors.

Most 2013 deals involved big biotechs, and even several big pharmas, snapping up smaller biopharmas. While the year did have a few multibillion-dollar blockbusters, led by Thermo Fisher Scientific’s $13.6 billion buy of Life Technologies (still pending at deadline), that deal was the only one to run into 11 figures. But the next 19 deals on the list ranged from $1 billion–$9 billion, which shows that big deals were alive and well in 2013, if not the uber-deals of recent-past years like Roche-Genentech and Sanofi-Genzyme.

Also interesting is how few of the deals combined upfront and milestone payments at the top of the list, and how many did so further down the rankings. While five of the top 25 and six of the top 30 deals included contingent payments, so too did six of the 10 deals ranked between No. 31 and No. 40—probably because the smaller deals involved less mature companies with promising product, but at earlier clinical stages still fraught with uncertainty over trial results, then regulatory action.

The list does not include M&A deals whose value was not disclosed—such as the AstraZeneca/MedImmune acquisition of AlphaCore Pharma, an Ann Arbor, Michigan-based biotechnology company focused on the development of ACP-501, a recombinant human lecithin-cholesterol acyltransferase (LCAT) enzyme. AstraZeneca was involved in five other deals that surfaced in 2013; the biggest was its up-to-$4.3 billion purchase of Bristol-Myers Squibb’s diabetes development operations. AZ’s acquisitions last year included Pearl Therapeutics, Amplimmune, Omthera, and Spirogen, for a combined more-than $1.3 billion upfront, and $1.225 billion in potential payments tied to milestones.

Another example of a company busier in deals than the list shows is Shire. In addition to ViroPharma ($4.2 billion), the biotech shelled out $160 million plus possible future milestones for SARcode, and did not disclose prices for Premacure and Lotus Tissue repair.

#25. Bever Pharmaceutical Pte Ltd.

Acquired by: Pharmstandard

Price: $590 million1

Deal Status: Completed August 17 through shareholder vote; completion announced August 222

Premium: 42% above the July 5, 2013, GDR price, and 35% above the July 5 ordinary share price, based on deal’s GDR price of $20.76 and ordinary share price of RUR 2,235

#24. Hi-Tech Pharmacal

Acquired by: Akorn Pharmaceuticals

Price: $640 million

Deal Status: Announced August 27. On January 3, 87% of Hi-Tech Pharmacal shareholders voted to approve the deal, though in an advisory vote, only 45% of shareholders voted in favor of executive-compensation packages to senior management, according to a Newsday report on which the company declined comment. Deal still expected to be completed in first quarter 2014, as originally announced.

Premium: 23.5% premium over closing price on August 26, 2013, based on deal price of $43.50 per share

#23. Xellia Pharmaceuticals

Acquired by: Novo A/S

Price: About $700 million

Deal Status: Completed May 213

Premium: N/A

#22. Trius Therapeutics

Acquired by: Cubist Pharmaceuticals

Price: About $704 million4

Deal Status: Completed September 11

Premium: 15% above closing price on July 30

#21. Astex Pharmaceuticals

Acquired by: Otsuka Pharmaceutical

Price: About $886 million

Deal Status: Completed October 11

Premium: 48% above the average closing stock price for the prior 30-day period, based on a deal price of $8.50 per share

#20. MAP Pharmaceuticals

Acquired by: Allergan

Price: About $958 million

Deal Status: Completed March 1

Premium: 60% above closing stock price of $15.58 on January 22, 2013, based on a deal price of $25 per share

#19. Aragon Pharmaceuticals

Acquired by: Johnson & Johnson

Price: Up to $1 billion5

Deal Status: Completed August 196

Premium: N/A

#18. Gentium

Acquired by: Jazz Pharmaceuticals

Price: About $1 billion

Deal Status: Announced December 20; deal expected to close in the first quarter of 2014.

Premium: 2.4% premium over Gentium’s December 16 closing price for its American Depository Receipts, based on deal price of $57 per share

#17. GlaxoSmithKline Pharmaceuticals Ltd. (India pharmaceuticals subsidiary)

Acquired by: GlaxoSmithKline

Price: $1.028 billion (Rs. 64 billion)

Deal Status: Announced December 16. Offing period expected to begin in February 2014; no projected closing date furnished.

Premium: 26% premium above the company’s closing share price on the National Stock Exchange of India (NSE) on December 13, 2013, and a 19% appreciation over the previous 12 months, based on deal price of Rs. 3,100 per share. The deal will enable GSK to raise its stake in the publicly listed Indian pharmaceuticals subsidiary from 50.7% to 75%.

#16. Pearl Therapeutics

Acquired by: AstraZeneca

Price: Up to $1.15 billion7

Deal Status: Completed June 27

Premium: N/A

#15. PRA International8

Acquired by: KKR

Price: More than $1.3 billion8

Deal Status: Completed September 25

Premium: N/A

#13 (tie). Paladin Labs

Acquired by: Endo Health Solutions

Price: About $1.6 billion

Deal Status: Announced November 5. On December 17, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was terminated by the U.S. Federal Trade Commission; on December 18, the Canadian Competition Bureau issued a no-action letter, which constitutes Canadian Competition Act compliance for the deal, expected to close in the first half of 2014.

Premium: 20% premium to Paladin Labs' share price of C$63.91 (about $60) as of November 4, 2013, based on deal price of C$77 (about $72) per share

#13 (tie). Ikaria

Acquired by: Madison Dearborn Partners

Price: About $1.6 billion9

Deal Status: Announced December 24 by Ikaria and leader of its selling investor group, New Mountain Capital. In addition to New Mountain, the group includes Arch Venture Partners, Venrock, and 5AM Ventures, which created the company in 2007 in an roughly $670 million cash-and-stock merger of INO Therapeutics and Ikaria Inc. Deal expected to close during first quarter of 2014.

Premium: N/A

#12. Novartis (blood transfusion diagnostics unit)

Acquired by: Grifols

Price: $1.675 billion

Deal Status: Announced November 11; deal expected to be completed in first half of 2014.

Premium: About three times 2012 net sales of $565 million

#11. Agila (injectables business of Strides Arcolab Ltd.)

Acquired by: Mylan

Price: Up to $1.75 billion10

Deal Status: Completed December 411

Premium: N/A

#10. Santarus

Acquired by: Salix Pharmaceuticals

Price: $2.6 billion

Deal Status: Announced November 7; deal expected to close in the first quarter of 2014.

Premium: 36% premium over Santarus' November 6, 2013 closing price of $23.53 per share and an approximately 39% premium over Santarus' average closing stock price for the prior 30-trading day period, based on deal price of $32 per share.

#9. Patheon

Acquired by: NewCo12

Price: Combination of deals totaling more than $2.6 billion13

Deal Status: Announced November 19; deals expected to be completed in the first half of 2014.

Premium: 64% above Patheon's closing share price on November 18, based on deal price of $9.32 per share

#8. Algeta

Acquired by: BayerHealthCare

Price: $2.9 billion

Deal Status: Algeta board of directors on December 19 unanimously recommends deal approval by shareholders. Bayer expects to close the transaction during the first quarter of 2014.

Premium: 37% premium to Algeta's closing share price on November 25, and 48% premium to the three-month volume weighted average stock price on November 25, the last trading day before the November 26 announcement of Bayer's preliminary acquisition proposal

#7. ViroPharma

Acquired by: Shire

Price: About $4.2 billion

Deal Status: Announced November 11; deal expected to close by first quarter of 2014 “or as soon as possible thereafter.”

Premium: 27% premium to ViroPharma's closing share price on November 8, 2013, the last trading day prior to announcement, and a 64% premium to ViroPharma's unaffected share price of $30.47 on September 12, 2013, based on deal price of $50 per share

#6. Bristol-Myers Squibb (BMS; Diabetes development operations)14

Acquired by: AstraZeneca15

Price: Up to $4.3 billion—including $2.7 billion upfront, up to $1.4 billion tied to regulatory and sales-based milestones, and up to $225 million tied to the transfer of assets. AstraZeneca also agreed to pay BMS royalties on set sales through 2025

Deal Status: Announced December 19; deal expected to close in first quarter 2014.

Premium: N/A

#5. Warner Chlicott

Acquired by: Actavis

Price: About $8.5 billion

Deal Status: Completed October 1

Premium: Warner Chilcott shareholders will receive, for each share they own, 0.160 shares in the combined company. Based on Actavis' closing price of $125.50 on May 17, that equals $20.08 per Warner Chilcott share—43% above the company’s average $14 per-share price for the 30 trading days ending May 9, the day before Warner Chilcott disclosed preliminary talks with Actavis; and 34% above Warner Chilcott’s closing May 9 price of $15.01.

#4. Elan

Acquired by: Perrigo

Price: About $8.6 billion

Deal Status: Completed December 18

Premium: 10.5% above Elan’s closing ADR stock price July 26 of $14.93 on the New York Stock Exchange, based on deal price of $16.50 per share

#3. Bausch + Lomb

Acquired by: Valeant Pharmaceuticals International

Price: $8.7 billion16

Deal Status: Completed August 6

Premium: N/A

#2. Onyx Pharmaceuticals

Acquired by: Amgen

Price: $10.4 billion17

Deal Status: Completed October 1

Premium: 44% premium above the $86.84 per-share closing price of Onyx shares on June 28, the last full trading day before speculation surfaced about Amgen’s interest in snapping up the company, based on the deal price of $125 per share

#1. Life Technologies

Acquired by: Thermo Fisher Scientific

Price: $13.6 billion18

Deal Status: Announced April 15. Won European Commission clearance in November, after Thermo Fisher agreed to shed its cell culture (sera and media), gene modulation, and magnetic beads businesses. Deal expected to win all remaining regulatory approvals and close in 2014.

Premium: 12% above Life Tech’s closing price of $68 per share in April 12 trading on NASDAQ, based on $76 per share deal price