During the fourth quarter of 2018, Cortellis Competitive Intelligence registered 1,073 new deals (excluding mergers & acquisitions) with a total disclosed deal value of $46.1 billion as part of its ongoing coverage of licensing activity in the life sciences sector. The totals represented a 7.4% increase from 994 and a 41.4% increase from $27 billion in the third quarter of 2018 and a 21.5% decrease from 1,304 and a 34.4% increase from $30.2 billion in the same quarter of the previous year. 2018 saw the highest ever Q4 total deal value over the past nine years, helped predominantly by Janssen’s $3.75 billion approach for Arrowhead Pharma’s phase II ribonucleic acid interference agent for hepatitis B virus infection.
High-value deals worth $500M or more
We tracked 29 high-value new licensing deals worth in excess of $500 million during the fourth quarter of 2019 with the top 20 shown below (Figure 1). Many of these deals were milestone heavy and focused on preclinical or discovery stage assets, while cancer was the predominant indication.
Figure 1: Janssen-Arrowhead paced the top deals by disclosed deal size. Source: Cortellis Competitive Intelligence
Three key licensing deals
Janssen expanded its presence in the gene therapy space as it drew in Arrowhead’s expertise in defective gene silencing drug discovery (Figure 3). Janssen takes on phase II candidate ARO-HBV, a subcutaneous treatment based on Arrowhead’s targeted ribonucleic acid interference molecule technology, which suppresses the genes responsible for the hepatitis B virus. The company also has an option for three additional targets in exchange for an upfront $175 million, equity investment of $75 million, up to $3.5 billion in milestones (up to $1.6 billion for ARO-HBV and up to $1.9 billion for the three additional targets) plus royalties.
Another RNAi technology was at the heart of Eli Lilly’s partnership with Dicerna as the former hopes to capitalize on the GalXC platform in silencing expression of disease-driving genes in cardio-metabolic disease, neurodegeneration and pain (Figure 4). The platform consists of a Dicer enzyme that cleaves the problematic gene and allows insertion of the silencing RNA strand. The parties would work on discovering up to 10 targets with Dicerna set to receive an upfront $100 million, up to approximately $350 million per target in milestones, $5 million when the first non-hepatocyte target achieves proof of principle, plus royalties. Eli Lilly would also take an equity stake of 5,414,185 shares in Dicerna valued at $100 million.
Swedish Orphan acquired rights to commercialize AstraZeneca’s Synagis (palivizumab) and also to participate in 50% of future earnings of MEDI-8897 (nirsevimab) in a 50% profit and loss arrangement, both for respiratory syncytial virus infection (RSV) in infants in the U.S. (Figure 5). Synagis is an RSV F protein inhibitor antibody widely available as a prophylaxis for RSV in infants, while MEDI-8897 is also an RSV inhibitor in phase II for RSV in infants. AstraZeneca would receive $1 billion in cash, $590 million in stock (8.1%), $20 million in cash per year for three years for MEDI-8897, up to $470 million in sales milestones for Synagis from 2026, $175 million for BLA submission for MEDI-8897, $110 million for MEDI-8897, profit and development milestones and further payments for MEDI-8897 from 2023.
Companies based in Asia-Pacific continued to show real growth in terms of partnering volume and dollar value. Companies headquartered in China tallied the highest number of deals with 67, closely followed by Japan with 61 and Australia with 51 (Figure 2). However, it was South Korea that disclosed the more valuable deals with 19 reporting a total of $4.8 billion compared to $2.9 billion in China and $1.1 billion in Japan, while India showed strong presence across its 10 deals with $980 million.
Figure 2: Across Asia Pacific in Q4, China-based companies engaged in the highest number of licensing deals, while those in South Korea tallied the highest value. Source: Cortellis Competitive Intelligence
Many of the top deals involving APAC-based companies focused on cancer indications, with gastrointestinal and bone diseases also present, all mainly early-mid clinical stage, while partnerships tended to be cross-continental reaching out to North America and Europe.
Editor’s Note: All data contributing to this analysis was sourced from Cortellis Competitive Intelligence from Clarivate Analytics.
The author’s full Q4 analysis, including details on key milestones, options and terminations, prolific dealmakers, a deeper look at the Asia-Pacific region plus an early update on Q1 2019 biopharma licensing, is available here: clarivate.com/products/cortellis/cortellis-competitive-intelligence/.
Please see, also, the Cortellis 2018 Biopharma Deals & Portfolio Review, our comprehensive look at the year in dealmaking. Our analysts dig into the strategies behind last year’s biggest deals and key portfolio decisions, with a focus on key companies, therapeutic areas and regions.