Big Pharma Licensing Trends, 2014–18
Big Pharma Licensing Trends, 2014–18
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An analysis of the drug-focused licensing deals (out-licensing and in-licensing) made by Big Pharma companies shows an uptick in partnering from 2014 to 2015, followed by a slight decrease in 2016 that has held steady through 2018. Despite that slight decline, the peer set increased deal volume by roughly 15% between the beginning and the end of the five-year period. Total deal values rose even more, roughly 25%.
Publisher: Datamonitor Healthcare
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Big Pharma Licensing Trends, 2012–18
Big Pharma deal-making volume and value peaked in 2015, and fell slightly in 2016–18
Between 2014 and 2018, Big Pharma companies signed a total of more than 1,450 drug-focused deals, growing at a compound annual growth rate of 3%. Deal volume jumped 24% from 2014 to 2015, but dropped 6% in 2016, and remained relatively flat in 2017 and 2018.
Seven Big Pharma dealmakers inked more than 100 deals apiece (in- and out-licensing combined) during the five-year period, collectively signing 920 deals
AstraZeneca was the top Big Pharma dealmaker, with 169 alliances. The company also led in out-licensing volume with 66 deals. Johnson & Johnson was second behind AstraZeneca in total deals, followed by Roche.
The rate of Big Pharma’s in-licensing activity outpaced out-licensing
Big Pharma companies signed two to three times as many in-licensing agreements as out-licensing deals annually between 2014 and 2018. Out-licensing peaked in 2015 (98 deals) and again in 2017 (100 deals).
Oncology, neurology, and endocrine, metabolic, and genetic disorders (EM&GD) were the top three therapeutic areas for Big Pharma in-licensing
Approximately 45% of Big Pharma in-licensing involved oncology drugs, including a significant portion in the immuno-oncology field. Nearly a third of Big Pharma out-licensing focused on oncology as well. Neurology comprised 11% of all in-licensing deals. The category had five deals with potential values greater than $1bn, led by Teva’s deal to in-license fasinumab from Regeneron, worth $2.6bn.
During the five-year period, payment metrics on all in-licensing deals diverged
Total deal values gradually increased between 2014 and 2018; however, upfront deal values remained generally flat over the five-year period. In 2014 and 2017, upfront values took off considerably thanks to several outlier deals; the $4.5bn and $3.5bn in upfronts in those years, respectively, represented nearly half of all upfronts made during 2014–18. Merck spent the most money on in-licensing over the five-year period, paying out more than $3.3bn in total upfront value.
Big Pharma balanced its in-licensing efforts for drugs across all development phases, but preclinical candidates led
For deals where the phase was disclosed, in-licenses for preclinical candidates topped the list in terms of volume and total deal value over the five-year period. The proportion of Phase III deals shrank considerably, while Phase II alliances decreased through 2016 but rebounded in 2017 and 2018. This trend may be a result of the scarcity of Phase III assets as well as the valuations those later-stage drug candidates can command.
Most Big Pharma alliances covered rights in select regions across the major markets
Regional deals made up 32% of the total Big Pharma in-licensing deals, compared with 30% that were conducted for rights just in North America, followed by worldwide deals at 23%. The proportion of worldwide rights fell relatively steadily from 2014 to 2018, albeit slowly. Global rights deals continue to comprise more than a fifth of all in-licensing deals by Big Pharma.
Big Pharma companies continued to structure most in-licensing deals with an R&D component
Over the five-year period, 62% (639 of 1,021) of in-licensing deals included development or co-development, and 55% (539 of 1,021) involved research and discovery. Big Pharma out-licensing also involved collaborative deal structures, including development/co-development, commercialization, and research/discovery. However, straight licensing led the overall out-licensing group. Co-development/development deal structures consistently led in proportion across the early-stage phases. As deals move to later stages, including Phase III and marketed drugs, the structures of the agreements change to include more acquisition and commercialization components.
CONTENTS
7 OVERVIEW
9 KEY POINTS AND OVERALL TOTALS
9 Deal volume holding steady, but Big Pharma’s overall share was small
10 Big Pharma represented the majority of deal-making spend
11 Five years of lucrative Big Pharma deal-making
13 Bibliography
15 COMPANY ANALYSIS AND CASE STUDIES
16 AstraZeneca was the leading dealmaker by overall volume within the Big Pharma peer set
20 Johnson & Johnson’s in-licensing volume is high but trending downward
25 Roche’s in-licensing is surging, led by oncology
28 Pfizer’s in-licensing fluctuated while out-licensing efforts decreased
31 Merck & Co’s in-licensing drives strategy to become oncology leader
33 Overall, out-licensing remained flat
36 Bibliography
39 THERAPY AREA ANALYSIS
39 Oncology dominated Big Pharma deal volume
47 Neurology deal-making gained speed
49 Diabetes powerhouses led in EM&GD deals
50 Oncology also led in terms of partnership dollar values
52 Oncology was also the focus of most out-licensing deals
53 Bibliography
55 DEAL ECONOMICS
55 Merck & Co was the top dealmaker by dollars spent within the Big Pharma peer set
55 Sanofi’s billion-dollar deals provided a strong position
57 Merck and Bristol-Myers Squibb spent large upfront sums
58 Payment metrics on deals remained steady
58 Average deal values increased
59 A higher proportion of deal value was still locked up in milestones
60 There were 54 billion-dollar deals between 2014 and 2018
63 Bibliography
64 PHASE ANALYSIS
64 Early-stage candidates dominated partnerships
67 Phase I and II candidates led in aggregate upfront payments
68 Upfront payment sizes fluctuated by year and by development stage
71 GEOGRAPHIC BREAKDOWN OF DEAL-MAKING
72 Worldwide deal-making has shrunk
75 DEAL STRUCTURES
75 R&D was the most common component of deal structures
76 In-licensing deal structures varied across phases
76 Option-based deal-making is possibly making a comeback
77 Bibliography
78 APPENDIX
78 Scope
78 Methodology
LIST OF FIGURES
10 Figure 1: Big Pharma’s deal-making volume, 2014–18
11 Figure 2: Big Pharma’s deal values and share of overall deal-making value, 2014–18
13 Figure 3: Big Pharma deal-making value ranges, 2014–18
15 Figure 4: Big Pharma’s deal volume, by company, 2014–18
16 Figure 5: Big Pharma’s licensing deal volume CAGR, 2014–18
17 Figure 6: AstraZeneca’s deal-making activity: 2015–17 out-licensing surge
18 Figure 7: AstraZeneca’s in-licensing deals, by therapy area, 2014–18
20 Figure 8: AstraZeneca’s out-licensing deals, by therapy area, 2014–18
21 Figure 9: Johnson & Johnson’s deal-making activity, 2014–18: in-licensing declines
22 Figure 10: Johnson & Johnson Innovation in-licensing deals, by volume, 2014–18
23 Figure 11: Johnson & Johnson Innovation in-licensing deals, by therapy area, 2014–18
24 Figure 12: Johnson & Johnson’s in-licensing deals, by therapy area, 2014–18
25 Figure 13: Roche’s deal-making activity, 2014–18: in-licensing increased while out-licensing was flat
27 Figure 14: Roche’s in-licensing deals, by therapy area, 2014–18
28 Figure 15: Roche’s out-licensing deals, by therapy area, 2014–18
29 Figure 16: Pfizer’s deal-making activity, 2014–18
30 Figure 17: Pfizer’s in-licensing deals, by therapy area, 2014–18
31 Figure 18: Pfizer’s out-licensing deals, by therapy area, 2014–18
32 Figure 19: Merck & Co’s deal-making activity, 2014–18
33 Figure 20: Merck & Co’s in-licensing deals, by therapy area, 2014–18
34 Figure 21: Big Pharma’s out-licensing still outpaced by in-licensing, 2014–18
35 Figure 22: Big Pharma’s in-licensing/out-licensing activity, by company, 2014–18
39 Figure 23: Big Pharma’s in-licensing deals, by therapy area, 2014–18
40 Figure 24: Big Pharma’s deal volume, by therapy area, 2014–18
41 Figure 25: Big Pharma’s in-licensing deals, by therapy area and phase of development, 2014–18
42 Figure 26: Big Pharma’s immuno-oncology deals as a share of all oncology deals, 2014–18
47 Figure 27: Top oncology in-licensing dealmakers, 2014–18
49 Figure 28: Big Pharma in-licensing volume, 2014–18: oncology, then the rest
51 Figure 29: Big Pharma’s in-licensing deals, by total deal value, 2014–18
52 Figure 30: Value of upfront and milestone payments of in-licensing deals, by therapy area, 2014–18
53 Figure 31: Big Pharma’s out-licensing deals, by therapy area, 2014–18
55 Figure 32: Big Pharma’s big spenders on in-licensing deals, 2014–18
58 Figure 33: Big Pharma’s licensing payments, by payment metric, 2014–18
59 Figure 34: Big Pharma’s in-licensing deals, by payment metric average, 2014–18
60 Figure 35: Total upfront payment values and upfront payments as a percentage of in-licensing deal value, 2014–18
64 Figure 36: Big Pharma’s in-licensing deals, by phase of development at deal signing, 2014–18
65 Figure 37: Preclinical and Phase I in-licensing deals hold sway, 2014–18
66 Figure 38: Strong representation across all phases in Big Pharma’s in-licensing deals, 2014–18
67 Figure 39: Marketed products dominated Big Pharma’s out-licensing deals, 2014–18
68 Figure 40: Big Pharma’s in-licensing deal economics, by phase of development, 2014–18
69 Figure 41: Big Pharma’s average upfront payments for in-licensing deals, by phase of development, 2014–18
70 Figure 42: Big Pharma’s average total deal values for in-licensing deals, by phase of development, 2014–18
71 Figure 43: Big Pharma’s in-licensing deal volume proportions, by licensed geography, 2014–18
72 Figure 44: Big Pharma’s out-licensing deal volume proportions, by licensed geography, 2014–18
73 Figure 45: Big Pharma’s worldwide in-licensing deals decreased and North American carve-outs increased, 2014–18
74 Figure 46: Geographic breakdown of in-licensing geography, by Big Pharma company, 2014–18
75 Figure 47: Big Pharma’s in-licensing deals, by deal structure, 2014–18
76 Figure 48: Big Pharma’s out-licensing deals, by deal structure, 2014–18
LIST OF TABLES
43 Table 1: Big Pharma’s lucrative immuno-oncology deals, 2014–18
57 Table 2: Big Pharma’s in-licensing deal values, by company ($m), 2014–18
61 Table 3: Top 10 Big Pharma in-licensing deals, by deal value, 2014–18
79 Table 4: Datamonitor Healthcare’s Big Pharma peer set
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