Trends in CNS Dealmaking, 2012–16
Trends in CNS Dealmaking, 2012–16
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Diseases of the central nervous system (CNS) offer considerable opportunity to drug developers and marketers.
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Diseases of the central nervous system (CNS) offer considerable opportunity to drug developers and marketers. A few CNS markets, such as multiple sclerosis, are already highly competitive, whereas others including potential blockbuster areas like Alzheimer’s disease offer a kind of therapeutic whitespace where few if any drugs are approved, and the medical need is dire. Regardless of the level of competition in a specific therapeutic area, there remains significant unmet medical need in virtually all CNS disease areas. Drug discovery and development have proven exceptionally difficult in this space, but better disease categorization and diagnosis – through the use of genetic markers or imaging technology, for example – may improve success for CNS drug developers.
The field has proven so challenging in the past that many larger companies exited CNS drug development. Companies that have remained active in CNS and others that are rejoining the fray argue that the space is poised for a breakout. Is CNS now where oncology was 10 years ago? Here we will review dealmaking in the CNS space, to determine what kinds of assets are being pursued by the biopharmaceutical industry, whether dealmaking has intensified over the past five years, and in what particular areas of CNS companies are focusing their deal dollars.
According to an analysis of US Food and Drug Administration (FDA) data, only 12 therapeutics were approved for CNS indications between 2012 and 2016, compared with 19 during the prior five-year period. Putting that figure in additional context: during 2012–16, the FDA approved 50 new oncology therapies, compared with 24 from 2007–11. Moreover, the CNS space (including pain and psychiatry) was the only major therapeutic area to see a decrease in approvals from the 2007–11 period to the 2012–16 period. Even relatively moribund and generic-dominated therapeutic areas like respiratory and cardiovascular diseases enjoyed an uptick in FDA approvals.
This lack of new therapies within the CNS area presents significant opportunities for the biopharmaceutical industry.
The source for the deal data used in this report is Informa’s Strategic Transactions.
CONTENTS
6 EXECUTIVE SUMMARY
8 DEAL SET OVERVIEW
8 Company formation (measured by Series A financings)
8 Initial public offerings
8 Alliances
8 Mergers and acquisitions
10 TRENDS IN CNS COMPANY FORMATION
10 Venture investment in CNS is increasing
22 Strategic investors piling in to Series As
24 Bibliography
26 TRENDS IN CNS COMPANY IPOS
26 CNS IPOs follow broad industry trends
37 Bibliography
39 TRENDS IN CNS COMPANY DEALMAKING
39 Fewer but more valuable CNS alliances
47 Characteristics of CNS therapeutics buyers and sellers
53 CNS therapeutics M&A analysis
64 Bibliography
65 APPENDIX
65 About the author
65 Scope
65 Inclusions and exclusions
65 Categorization and classification
66 Measuring investor return
LIST OF FIGURES
11 Figure 1: Series A financings by CNS-focused therapeutics companies, 2012–16
12 Figure 2: CNS companies are gaining a larger share of company creation dollars, 2012–16
15 Figure 3: Number of CNS companies raising Series As, by therapeutic focus, 2012–16
16 Figure 4: Total Series A capital raised, by therapeutic focus, 2012–16
17 Figure 5: Total Series A capital raised, by type of therapy, 2012–16
19 Figure 6: CNS company formation: number of Series A-funded companies, by location, 2012–16
20 Figure 7: Series A capital for CNS start-ups, by location, 2012–16
21 Figure 8: Number of CNS-focused Series A companies, by strategic concept, 2012–16
22 Figure 9: Series A capital raised by CNS companies, by strategic concept, 2012–16
23 Figure 10: Average capital raised in CNS Series A financings, with and without strategic investor participation, 2012–16
24 Figure 11: Frequent strategic investors in Series As for CNS-focused biotechs, 2012–16
27 Figure 12: Number of CNS therapeutics company IPOs, 2012–16
28 Figure 13: Total IPO capital for CNS therapeutics companies, 2012–16
31 Figure 14: CNS IPOs, by therapeutic focus, 2012–16
32 Figure 15: CNS IPOs, by development stage*, 2012–16
33 Figure 16: CNS IPOs, by therapeutic modality, 2012–16
34 Figure 17: CNS IPOs, by R&D strategy, 2012–16
35 Figure 18: CNS IPOs, by company location, 2012–16
36 Figure 19: Step-up valuations for therapeutics company IPOs, 2012–16
37 Figure 20: Step-up multiples for 2012–16 CNS therapeutics IPOs
40 Figure 21: Number of CNS alliances, 2012–16
41 Figure 22: CNS alliances as percentage of all therapeutics alliances, 2012–16
42 Figure 23: CNS alliances, by deal type, 2012–16
43 Figure 24: CNS alliance upfront value, 2012–16
45 Figure 25: Potential value of CNS alliances, 2012–16
46 Figure 26: CNS alliances, by indication, 2012–16
47 Figure 27: CNS alliances, by development stage, 2012–16
48 Figure 28: CNS alliances, by buyer category, 2012–16
49 Figure 29: Companies with the most CNS alliances, 2012–16
50 Figure 30: Companies spending the most on CNS alliances, 2012–16
51 Figure 31: CNS alliances, by seller type, 2012–16
52 Figure 32: Top large pharmaceutical out-licensers of CNS assets, 2012–16
53 Figure 33: Number of CNS acquisitions, 2012–16
54 Figure 34: CNS acquisitions as a percentage of all acquisitions, 2012–16
56 Figure 35: Upfront payments as percentage of total deal value in all CNS M&A, 2012–16
57 Figure 36: Private CNS biotech M&A deals back-end loaded, 2012–16
58 Figure 37: Deal premiums rising on CNS M&As, 2012–16
59 Figure 38: CNS M&A deal volume peaks in Phase II, value peaks in Phase III, during 2012–16
60 Figure 39: Pain company acquisitions highly valued within CNS M&A deals, 2012–16
61 Figure 40: Regional and specialty pharma are key buyers of CNS therapeutics companies, 2012–16
62 Figure 41: Teva tops buyers of multiple CNS therapeutics companies, 2012–16
63 Figure 42: CNS therapeutics M&A, target locations, 2012–16
64 Figure 43: CNS therapeutics M&A, target business strategies, 2012–16
LIST OF TABLES
13 Table 1: Top 10 CNS company Series A financings, by value, 2012–16
29 Table 2: Top 10 CNS company IPO financings, by value, 2012–16
44 Table 3: Top 10 CNS therapeutics alliances, by upfront value, 2012–16
55 Table 4: Top 10 CNS company acquisitions, by upfront value, 2012–16
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