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.
Also, join Clarivate Analytics deals experts Jamie Munro and Laura Vitez at our annual Deals and Portfolio Review live in San Francisco during the week of the 37th J.P. Morgan Healthcare Conference. For more information and to register for one of the three free sessions, click here.