During the first quarter of 2018, Cortellis Deals Intelligence registered 90 new mergers and acquisitions (M&A) with a total disclosed deal value of $123 billion as part of its ongoing coverage of M&A activity in the life sciences sector compared to 128 and $90.9 billion in the previous quarter and 131 and $73.3 billion in the first quarter of 2017.
This year’s first quarter saw a 32% increase in total reported deal dollars from the first quarter of 2017, helped primarily by a $67 billion approach by Cigna for benefit management services company Express Scripts, and the highest first quarter total value since at least 2010. The number of M&As has, however, dropped to figures similar to 2011, signifying fewer M&As but with larger transactions.
High-value M&As worth $0.5B or more
We tracked 28 high-value new M&As worth in excess of $100 million during the first quarter of 2018. The following is a selection of M&As valued at more than $0.5 billion with the majority focusing on therapeutics and consisting primarily of upfront and equity payments (Figure 1).
Figure 1: Selection of top M&As of Q1 of 2018 by disclosed deal size (excludes Cigna’s $67B approach for Express Scripts for better graphical presentation). Source: Cortellis Deals Intelligence, Clarivate Analytics.
Cigna planned to acquire pharmacy benefit management services company Express Scripts for $67 billion (including $15 billion in debt). The offer consisted of $48.75 in cash and 0.2434 shares of stock of the combined company per each Express Scripts share in a 64%/36% ownership split of the combined entity. Closure was expected by year end.
Following on from a 64/36 split joint OTC venture, GSK Consumer Healthcare, formed between GlaxoSmithKline (GSK) and Novartis in April 2014 focusing on wellness, oral health, nutrition and skin health, GSK targeted the remaining 36% stake for $13 billion. GSK could fund the purchase with its consumer nutrition business including Horlicks. The purchase follows GSK’s recent cancellation of a $20 billion bid for Pfizer’s consumer health business, shortly after Reckitt Benckiser withdrew. Closure was due in the second quarter.
Sanofi absorbed Bioverativ for $11.6 billion ($105 per share in cash) to shore up its hemophilia portfolio. Some of Bioverativ’s leading programs included widely available Alprolix (factor IX deficiency), Eloctate (Factor VIII deficiency) and phase III cold agglutinin disease candidate BIVV-009.
Focus on APAC
Asia-Pacific has seen a number of high-value M&As.
CJ HealthCare, the South Korean medicine and biotechnology company, was subject to a $1.2 billion approach from cosmetics firm Korea Kolmar Holdings. CJ had at its disposal epokine, a follow-on biologic version of the erythropoietin ligand epoetin alfa (renal failure and chemotherapy-associated anemia) and leukokine, presumably a follow on biologic of filgrastim (chemotherapy-induced neutropenia).
FujiFilm looked to enhance its capabilities for manufacturing cell culture media, reagents and medical devices through a stock purchase agreement of JXTG Energy’s Irvine Scientific Sales Company for $800 million. FujiFilm would be able to offer better services to researchers and clinicians as a result.
Takeda targeted TiGenix for $612 million ($2.1 per share) along with its allogeneic and donor-derived expanded stem cells. The planned acquisition extends from their current $417 million partnership for Alofisel, an allogeneic expanded adipose-derived mesenchymal stem cell, approved in Europe for complex perianal fistula in Crohn’s disease. The acquisition may complete by the second quarter.
Outlook for Q2
A number of high profile M&As continued to be announced in the second quarter of 2018. Novartis targeted AveXis, a clinical stage gene therapy firm focusing on rare and life-threatening neurological genetic diseases, for $8.7 billion, while Altaris Capital Partners approached Analogic, a leading-edge healthcare and security technology solutions company, for $1.1 billion.
This article is excerpted from the author’s full Q1 M&A report. For more details on the quarter’s key deals, including several others in the Asia-Pacific region, click here.
All data contributing to this analysis was sourced from Cortellis Deals Intelligence from Clarivate Analytics. For more information: clarivate.com/cortellis-deals-intelligence.
