EY’s projection that the volume of mergers and acquisitions (M&A) in “life sciences”—which includes biopharma and medical technology segments—will go well past last year’s $200 billion annual volume of deals appears to be on target judging from the first half of 2018.
Just the top 10 deals completed and/or announced by biotechs and pharmas so far this year—and highlighted on this list—added up to $170.2 billion, whether they are deals involving two drug developers, or a drug developer and a company that applies a technology for a biomedical purpose, as is the case with two of those top 10 transactions.
“We remain of the view that M&A is going to stay strong in the back half of the year, and for that matter into next year,” Glen Giovannetti, EY’s global biotechnology leader, told GEN in June.
Even more interesting, according to Bureau Van Dijk, a Moody Analytics Company: The number of biotech deals more than doubled during January–May 2018 compared to the year-ago period, 561 transactions compared with 214.
The M&A market was robust enough during the first half of this year that at least two and possibly three transactions exceeding $1 billion in value were too small to be included on GEN’s list:
- H. Lundbeck agreed to shell out up to €905 million (up to $1.05 billion) for Merck KGaA spinout Prexton Therapeutics, in a deal that added a Phase II Parkinson’s disease candidate to the buyer’s pipeline focused on neurological as well as psychiatric disorders.
- And in May, Johnson & Johnson’s Janssen Biotech agreed to shell out up to $1.04 billion for cancer immunotherapy developer BeneVir Biopharm.
A third transaction remained uncertain at deadline. Sirtex Medical, the Australian developer of a targeted radioactive treatment for liver cancer (SIR-Spheres® Y-90 resin microspheres), was the target in June of an unsolicited A$1.9 billion ($1.4 billion) offer by a pair of Chinese suitors, fund manager CDH Investments and strategic partner China Grand Pharmaceutical and Healthcare Holdings. The suitors have topped a $1.3 billion bid by U.S.-owned Varian Medical Systems that has won support from Sirtex’s board.
Below is a list of the top 10 largest M&A deals for the first half of 2018 disclosed by drug developers and tools/tech companies, 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, and the buyer’s stated reason for pursuing the deal.
#10. Armo BioSciences
Acquired by: Eli Lilly
Price: Approximately $1.6 billion
Deal status: Completed June 22. The acquisition, announced May 10, expanded Lilly’s immuno-oncology pipeline with AM0010 (pegilodecakin), a Phase III pancreatic cancer candidate that is also being developed to treat other solid tumors.
#9. Flatiron Health
Acquired by: Roche
Price: $1.9 billion
Deal status: Completed April 6. The acquisition, announced February 15, was one of three deals over the past year through which Roche signaled its intent to grow in personalized medicine and oncology. The other two were the planned $2.4 billion merger with Foundation Medicine (see below) and the $1.7 billion acquisition of targeted cancer therapeutics developer Ignyta, completed February 8.
#8. Foundation Medicine
Acquired by: Roche
Price: $2.4 billion
Deal status: Announced June 19, the planned merger is the latest sign of Roche’s growing interest in personalized oncology treatments as well as diagnostics. Roche will expand its majority stake in Foundation Medicine into full ownership of the cancer-focused molecular diagnostics developer through the deal, which is expected to close in the second half of this year.
Acquired by: Sanofi
Price: €3.9 billion ($4.5 billion)
Deal status: Completed June 19. The acquisition, announced January 29, was designed to expand Sanofi’s R&D pipeline and rare blood disorders portfolio with a late-stage candidate and its underlying technology based on therapeutic proteins, or Nanobodies®.
#6. Impact Biomedicines
Acquired by: Celgene
Price: Up to $7 billion
Deal status: Completed February 12. The acquisition, announced January 7 during the J.P. Morgan 36th Healthcare Conference in San Francisco, consisted of $1.1 billion upfront, up to $1.4 billion tied to achieving regulatory approvals, and up to $4.5 billion tied to achieving sales in any four consecutive calendar quarters of between $1 billion and $5 billion, according to Celgene’s Form 10-Q filing for the first quarter.
Acquired by: Novartis
Price: $8.7 billion
Deal status: Completed May 15. The acquisition, announced April 9, expanded both Novartis’ neuroscience portfolio and its presence in gene therapy with a promising candidate for type 1 spinal muscular atrophy (SMA), AVXS-101.
#4. Juno Therapeutics
Acquired by: Celgene
Price: $9 billion
Deal status: Completed March 6. The acquisition, announced January 22, expanded the buyer’s presence in cancer therapeutics by catapulting Celgene into the thick of the scramble to develop CAR (chimeric antigen receptor) T-cell and TCR (T-cell receptor) treatments.
Acquired by: Sanofi
Price: Approximately $11.6 billion
Deal status: Completed March 8. The acquisition, announced January 22, expanded Sanofi’s portfolio in specialty care and was intended to strengthen the rare disease presence it established seven years ago.
Acquired by: Takeda Pharmaceutical
Price: Approximately £46 billion ($60.5 billion)
Deal status: Expected to close in the first half of 2019. On May 8, the boards of both companies came to terms on an acquisition deal that will create a combined company to be half owned by Shire shareholders upon completion of the transaction, which is subject to approval by shareholders of both companies. The agreement came two weeks after Shire’s board set the stage for a potential Takeda acquisition by saying it would recommend to shareholders approval of Takeda’s offer if other terms could be worked out.
Acquired by: Bayer
Price: $63 billion
Deal status: Completed June 7, more than a year and a half after the deal was first announced in September 2016 as a $66 billion transaction. On May 29, the U.S. Justice Department announced that Bayer agreed to sell $9 billion in assets to BASF in return for conditional approval. The assets included Bayer’s canola, soybean, and vegetable seed businesses, as well as its Liberty herbicide business, all of which compete with Monsanto products.