Back when the year began, the prospect of U.S. tax reform had pharma companies salivating for some M&A action. But with that reform still absent, drugmakers have put on the brakes instead.
Dealmaking in 2017 has so far seen a slowdown, tallying $207.6 billion across 1,040 deals in the pharma, medical and biotech sector, a new Mergermarket report (PDF) said. That’s a 9.9% dip in value and 106 fewer transactions compared with the same period last year.
The industry’s sluggish deal pace was particularly apparent last quarter; just $42.9 billion worth of deals came to fruition, the lowest quarterly value since the same period in 2014 and its $46.3 billion. And just one deal—Gilead’s $10.2 billion Kite buyout agreement, which will hand the Big Biotech newly approved CAR-T medication Yescarta—generated nearly 35% of the quarter’s dealmaking haul.
Make no mistake: It’s pharma that’s dragging down the overall category. Biotech, in fact, is red hot, partly in thanks to the Gilead deal. Overall, the biotech field has already surpassed all annual totals that Mergermarket had on file, and its records date back to 2001.
That’s not to say pharma M&A can’t turn around—especially if tax reform shows up. Deal enthusiast Pfizer, for one, has listed uncertainty around tax reform as a reason to sit tight for now. Some analysts have suggested it may have its eye on Bristol-Myers Squibb, though, and that company would certainly cost a pretty penny.
Pfizer’s also potentially looking to sell off its consumer health unit, and analysts have suggested that Endo turn to the M&A arena to ease its struggles. Alvogen’s private equity owners have also held talks with Shanghai Pharmaceuticals that could lead to a $4 billion sale.
By Carly Helfand
Source: Fierce Pharma
Colorcon Ventures, the corporate venture fund of Colorcon Inc., has invested in VeriSIM Life, a San Francisco-based startup with a digital bio-simulation platform that accelerates drug development and reduces animal testing.
Initial public offerings have fueled biotech’s boom. Keep track of them as they happen with this database. Which biotechs create value over time, and which fail? What types of companies are generating the best returns? Who are their top investors? Biopharma Dive is tracking these details in the database which will be updated regularly.
Sanofi has ended a long-running alliance with Sangamo Therapeutics to develop genetic medicines for inherited blood disorders, among them an experimental sickle cell disease therapy that is in early clinical testing.
The two have been developing complex, personalized treatments, led by a sickle cell drug known as SAR445136. But Sanofi is now more interested in off-the-shelf approaches, which are meant to be more convenient.