Trends in M&A volume and deal value
During the third quarter of 2018, Cortellis Deals Intelligence registered 131 new mergers and acquisitions (M&A) with a total disclosed deal value of $16 billion as part of its ongoing coverage of M&A activity in the life sciences sector compared to 113 and $104.6 billion in the second quarter and 124 and $30.1 billion in the third quarter of the 2017.
The reported deal dollars in the third quarter of 2018 were helped by Medtronic’s $1.64 billion approach for medical device firm Mazor Robotics as it looks to expand into robotic-assisted spinal surgery.
High-value M&As worth $0.5B or more
We tracked 34 high-value new M&As worth in excess of $100 million during the third quarter of 2018 with 10 worth more than $500 million (nine of which were device/therapeutic) (See Figure 1).
Figure 1: Selection of top M&As of third quarter of 2018 by disclosed deal size, therapy area and stage of asset of focus; device, diagnostic and therapeutic targets only. Muscular (Musculoskeletal); Toxicity (Toxicity); Neuro (Neurology/Psychiatric); Endo/Met (Endocrine/Metabolic); Onco (Oncology); C2 (Phase II); L (Launch); PR (Pre-registered). Source: Cortellis Deals Intelligence, Clarivate Analytics.
The largest M&As focused on devices for musculoskeletal therapy, including Mazor’s X Robotic Guidance System (Mazor X) and its Renaissance Surgical-Guidance System (Renaissance) for guided spinal surgery ($1.64 billion), and K2M Group’s spine and minimally invasive spine technologies and techniques ($1.4 billion).
Therapeutic M&As covered areas in immunity, endocrine/metabolic and oncology with stages of key assets in the deal ranging from discovery to launch.”
Therapeutic M&As covered areas in immunity, endocrine/metabolic and oncology with stages of key assets in the deal ranging from discovery to launch; phase II assets commanded a higher fee, particularly Syntimmune’s recombinant, humanized monoclonal antibody, SYNT-001 (autoimmune diseases) ($1.2 billion), and Agilis’s gene therapy for L-amino acid decarboxylase deficiency (genetic disorder that affects signaling within nervous system) ($945 million).
Deal structure was mixed between the usually common all-cash approach (Medtronic/Mezor; Stryker/KM Group; Novo Nordisk/Ziylo; Harbin Gloria/Hefei Tianmi) and risk-balancing milestones for early stage therapeutic candidates (Alexion/Syntimmune – $370 million development, $350 million regulatory, $80 million sales; PTC Therapeutics/Agilis – $60 million development, $535 million regulatory, $150 million sales; Roche/Tusk (Launched candidate) – $697 million; Emergent/Adapt – $100 million sales and; Boston Scientific/Augmenix – (device) $100 million sales).
Three key therapeutic M&As that Cortellis tracked, as seen in Figure 1, included:
- Rare disease specialist Alexion Pharmaceuticals targeted clinical stage, immune therapy developer Syntimmune.
- Genetic disorder focused PTC Therapeutics acquired Agilis Biotherapeutics, a biotech with expertise in gene therapies against rare central nervous system diseases, inheriting four gene therapies for neurological disorders.
- Roche continued its immune-oncology (IO) strategy with Tusk Therapeutics, which uses antibodies to harness the immune system to target cancer.
The M&A landscape in APAC
The highest number of deals in the Asia-Pacific region in Q3 were executed by Japan-based companies with a focus ranging from genomics to biofuels to medical devices. The five M&As contributed to a total disclosed value of $683 million, primarily helped by Otsuka’s $430 million takeover of Visterra, a U.S. biotech which develops antibodies against kidney diseases.
The highest number of deals in the Asia-Pacific region in Q3 were executed by Japan-based companies with a focus ranging from genomics to biofuels to medical devices.”
M&A activity by China-based organizations also included medical devices (Hefei’s Tianmai $627 million purchase by Harbin Gloria in the diabetes space; Japan-based Terumo’s $138 million target of Essen Technology Beijing; Huadong Medicine’s $202 million approach for U.K.-based aesthetics company, Sinclair Pharma). Only one M&A was reported by a South Korea-based firm with SK Group snapping up U.S. based Ampac Fine Chemicals for $740 million. Telix Pharmaceuticals put Australia on the map with its $10 million purchase of France-based ATLAB Pharma and its phase III anticancer antibody TLX-591. India reported two deals but disclosed no value along with Hong Kong, Singapore and Taiwan.
Editor’s Note: This article was excerpted from the author’s full third-quarter report, which includes seven additional charts and tables, deeper APAC analysis, a closer look at the Alexion-Syntimmune, PTC-Agilis and Roche-Tusk deals, as well as early analysis of Q4.
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