Acquisitions are central to growth, and 2018 was a strong year.
2018 was a very strong year for dealmaking. The value of biopharmaceutical mergers and acquisitions (M&A) grew by 20% to reach over $160bn, with the top 10 deals accounting for almost 80% of that, according to Informa’s Medtrack and Strategic Transactions
CONTENTS
5 OVERVIEW
6 BIOPHARMA M&A GREW 20% TO $160BN IN 2018
6 Acquisitions are central to growth, and 2018 was a strong year
7 Big Pharma buy big biotechs
12 Bibliography
15 WHY DEALS FAIL
15 The reasons may be clinical, economic, or strategic
15 Strong need and competition push up prices beyond “reasonable value”
20 Bibliography
24 BEWARE WARNING SIGNS – AT THERAPY AREA, DRUG CLASS, AND COMPOUND LEVEL
24 Therapy area effects
24 Drug class effects
24 Compound effects
26 Red-hot therapy areas do not guarantee success
26 Bibliography
30 HALF OF 2014’S LARGEST LICENSING DEALS WENT SOUR
30 Reasons for failure: new technologies, new priorities, competition
33 Bibliography
36 CLASS OF 2018–19: CAN RARE DISEASES SUSTAIN BIG PHARMA?
36 Nearly half of 2018 and 2019’s largest M&A deals focus on rare diseases
39 Value-destroying deals will continue
40 Bibliography
42 APPENDIX
42 About the author
42 Scope
42 Methodology
LIST OF FIGURES
11 Figure 1: Failed biopharma M&A deals, 2014–16
12 Figure 2: 2014 biopharma acquisitions with upfront value of $200m or more
19 Figure 3: Selected CNS deals (2014–16) – 13 deals with upfront value of $200m or more
LIST OF TABLES
7 Table 1: Top 10 M&A deals by value, 2018
8 Table 2: Celgene was a big shopper: 2017–19 M&A and alliance deals
15 Table 3: Select examples of deal failures, by failure type, 2014–16
31 Table 4: Failed or amended licensing deals from 2014, with upfront value of $100m or more
32 Table 5: Failed or amended licensing deals from 2015, with upfront value of $100m or more
37 Table 6: Significant rare diseases M&A since January 2018