During the second quarter of 2018, Cortellis Deals Intelligence registered 118 new mergers and acquisitions (M&A) with a total disclosed deal value of $113.7 billion as part of its ongoing coverage of M&A activity in the life sciences sector compared to 102 and $130.2 billion in the previous quarter and 138 and $63.3 billion in the same quarter of the previous year.
This quarter reaches 79.6% of the total deal size values achieved in the previous quarter of 2018 attributable in part to Takeda’s $62.3 billion offer for Shire, and is close to the figure of the second quarter of 2016 (16.3% down), which included the $66 billion Monsanto acquisition by Bayer (recently completed). In addition, this second quarter of 2018 is similar in both volumes and financial sizes as 2014 and 2015 periods.
High-value M&As worth $0.5B or more
We tracked 33 high-value new M&As worth in excess of $100 million during the second quarter of 2018. Figure 1 highlights M&As valued at more than $0.5 billion; most involved therapeutics companies, with immuno-oncology and orphan diseases areas the main targets. Below are details on the top two deals. For analysis of additional deals, download the full report.
Figure 1. Selection of top M&As of second quarter of 2018 by disclosed deal size. Source: Cortellis Deals Intelligence, Clarivate Analytics.
Takeda offers $62.3 billion for rare diseases firm Shire
The rumors that appeared published in March became true and Takeda finally announced its intention to acquire Shire in exchange of $30.33 cash per share plus Takeda shares (0.839 in new shares or 1.678 in ADSs), which represents a total transaction value of GBP 46 billion (approximately $62.3 billion) and a premium of 64.4% to Shire’s share price before the rumors. Takeda has maintained its interest to acquire Shire, even though the Irish-based firm is selling its oncology assets to Servier as announced in April. With the completion of the acquisition, the Japan-based big pharma is strengthening its gastrointestinal (Gattex, Resolor) and neuroscience commercial assets (Vyvanse, Intuniv) and is moving into a strategic position in the rare diseases market (Elaprase, Vpriv), plasma-derived products (Cuvitru, HyQvia) as well as ophthalmology segment (CNP analog SHP-639 in phase I and ENaC blocker SHP-659 in phase II). The transaction is expected to close in the first half of 2019 and be significantly accretive to earnings per share from the first full fiscal year following the completion of the transaction.
Novartis reinforces its gene therapy assets via $8.7 billion AveXis acquisition
Novartis acquired U.S.-based biotech company AveXis for approximately $8.7 billion ($218 per share). The Switzerland firm gained access to AVXS-101, an adeno-associated virus (AAV) serotype 9 vector-delivered survival motor neuron gene therapy, in phase III for spinal muscular atrophy, which is expected to be launched in the U.S. in 2019. Avexis incorporates into Novartis’s gene therapy portfolio other preclinical gene therapies with potential IND filings planned for 2018/2019, including AVSX-201 for Rett syndrome and AVSX-301 for genetic amyotrophic lateral sclerosis.
M&A update in APAC
Takeda’s offer for Shire is situated at the top of the M&A transactions conducted by Asia-Pacific companies for this quarter. As in previous periods, Japan, China, Australia and India are the main countries with a significant number of acquisitions in the life sciences market. Here are some notes on a few of them:
Shanghai Pharmaceutical agreed to acquire 51.34% of the shares of Guangdong Techpool Bio-Pharma owned by Takeda for $0.28 billion. Guangdong Techpool is a Chinese-based company focused on urinary protein biopharmaceuticals, including Techpool Roan (ulinastatin for injection) for pancreatitis and acute circulatory failure and Kailikang (urinary kallidinogenase for injection) for thrombotic cerebral infarction. Shanghai Pharmaceutical will acquire the company jointly with an investment fund, which would own 49% of Takeda shareholding and Shanghai Pharma will obtain the rest (51%).
Indian companies Solara Active Pharma and Strides Chemicals reached an agreement whereby Solara will acquire Strides Chemicals, a subsidiary of Strides Shasun, for INR 1.31 billion (approximately $19.7 million). Solara will expand its manufacturing active pharmaceutical ingredients with the acquisition of the Strides Chemicals assets.
Japanese-based ReproCELL acquired the Indian-based BioServe Biotechnologies from Cancer Genetics for $1.9 million following a strategic decision of Cancer Genetics and its reorganization plan. BioServe is offering molecular services for genetics, drug discovery and biomarker companies.
Outlook for the third quarter of 2018
A number of high profile M&As have already been announced in the third quarter 2018. PTC Therapeutics is acquiring Agilis Biotherapeutics, which is developing genetic therapies including GT-AADC for aromatic L-amino acid decarboxylase (AADC) deficiency, for $0.95 billion. Also, the Korean-based company SK Group is acquiring Ampac Fine Chemicals, a lead API manufacturer, for approximately $0.74 billion.
Editor’s note: This article is excerpted from the author’s full Q2 M&A report, which features numerous additional deal summaries, including analysis of the Alexion-Wilson Therapeutics, Advent International-Zentiva and Janssen-Benevir deals as well as, in APAC, the acquisition of Veredus Laboratories by Sekisui Chemical.
Note that all data contributing to this analysis was sourced from Cortellis Deals Intelligence from Clarivate Analytics. For more information: clarivate.com/cortellis-deals-intelligence.
For an in-depth look at the Q2 M&A deals, download the full report.
To get a broader view of the deals activity in H1 2018, join our webinar on October 3.