Life sciences M&A deals in the fourth quarter of 2017: updates and trends

During the fourth quarter of 2017, Cortellis Deals Intelligence registered 122 new mergers and acquisitions (M&A) with a total disclosed deal value of $92.3 billion as part of its ongoing coverage of M&A activity in the life sciences sector compared to 121 and $30.1 billion in the third quarter and 111 and $22 billion in the fourth quarter of 2016 (Figure 1).



The reported deal dollars in the fourth quarter of 2017 were helped by pharmacy and insurance provider CVS Health’s $69 billion approach for health plan and dental coverage provider Aetna following the large reduction in total fourth quarter deal value in M&A activity in 2016. It was the largest reported M&A since Pfizer’s $160 billion approach for Allergan in 2015, which had ended following a review of U.S. tax implications. Other M&As with large disclosed values for the year-end quarter focused on pharmacy distributions, health insurance, dialysis services, medical devices, nutritional supplements, radioligands and personalized treatments for cancer, mostly in the clinical phase.

High-value M&As worth $0.5B or more

We tracked 23 high-value new M&As worth in excess of $100 million during the fourth quarter of 2017. The following is a selection of M&As valued at more than $0.5 billion (Figure 2).

CVS Health launches $69B bid for health plan/dental coverage provider Aetna and offloads healthcare outsourcer RxCrossroads to McKesson for $737M

Pharmacy and insurance provider CVS Health targeted insurance provider Aetna for $145 per share in cash and 0.8378 CVS Health shares for each Aetna share; about $207 per share or approximately $69 billion in total. The combined entity would be split 22% and 78% between Aetna and CVS Health shareholders, respectively. In the event of termination, Aetna would receive a termination fee of $2.1 billion. The deal would close in the second half of 2018. A month earlier, CVS Health was offloading RxCrossroads, a healthcare outsourcing provider, to McKesson for $737 million in cash. The deal has since closed.



Optum targets dialysis and medical provider DaVita for $4.9B

Information and technology-enabled health services business Optum set its sights on DaVita, parent company of DaVita Kidney Care and DaVita Medical Group, for $4.9 billion. DaVita Kidney Care provides an outpatient dialysis service to more than 2,470 patients with chronic kidney failure and end-stage renal disease in the U.S. The medical group manages physician networks to support around 1.7 million patients. Deal closure was projected for 2018.

Novartis captures radiopharma Advanced Accelerator Applications for $3.9B

Novartis looked to increase its presence in radiopharmaceuticals and molecular nuclear medicine with a planned and subsequently executed $3.9 billion tender offer for Advanced Accelerator Applications (AAA) at $41 per ordinary share of AAA and $82 for each American Depositary Share (Figure 3). The offer focuses on AAA’s Lutathera, a radionucleotide consisting of oxodotreotide connected to radioligand lutetium-177, available for neuroendocrine tumors and 177Lu-linked prostate specific membrane antigen in phase II for prostate cancer.



Nestle supplements its nutritional business with $2.3B Atrium buy

Nestle planned to enhance its health science business with Atrium’s nutritional supplements such as Klean Athlete and Wobenzym. Atrium would operate as an independent operating division while its investors group would receive $2.3 billion in cash. Closure was expected in the first quarter of 2018. 

Roche offers $1.7B for personalized immune-oncology player Ingynta

Precision oncology biotech, Ingynta, which focuses on personalized medicines for immune-oncology diseases, was approached by Roche in the form of $27 per share in cash or $1.7 billion in total. Roche said it hopes to add phase II entrectinib, which targets non-small cell lung cancer and solid tumors caused by genetic defects associated with ROS Proto-Oncogene 1/neurotrophic tyrosine kinase receptor fusions, respectively, to its pipeline. Closure was planned for the first half of 2018.

Sucampo’s metabolic treatments sought by Mallinckrodt for $1.2B

Mallinckrodt sought Sucampo and its key assets: Amitiza (constipation), Rescula (ocular hypertension and open-angle glaucoma) and metabolic treatments VTS-270 (Niemann-Pick Type C lysosomal storage disease) and CPP-1X/sulindac (familial adenomatous polyposis). The offer comprised of $18 per share or $1.2 billion in total with a termination fee of $44 million should the deal collapse.

AmerisourceBergen widens pharmacy distribution with $815M HD Smith

AmerisourceBergen looked to add pharmacy distributor HD Smith to its pharmaceutical supply chain for $815 million. HD also manages CompleteCare Pharmacy, Smith Medical Partners, Triplefin and Valley Wholesale Drug. The deal has since closed.

TPG Capital to back medical device maker Exactech with $733M of equity

TPG Capital planned to fund Exactech, maker of orthopedic implants, surgical instruments and biologics with $624.7 million of equity ($42 per share in cash). This was later amended to $737 million ($49.25 per share). The U.S.-based private equity firm’s portfolio includes a number of healthcare organizations including Collegium, FivePrime and Galleon. Closure was expected in the first quarter of 2018.

 $662M to merge ENT surgical device maker Entellus with Stryker   

Stryker would merge with Entellus Medical, a firm developing medical technology that enables surgeons to perform minimally invasive ear, nose, throat (ENT) surgery to treat chronic and recurrent sinusitis, for $24 per share in cash, or approximately $662 million. A termination fee of $20.5 million was also noted plus $6.6 million in transaction expenses.

 Outlook in Q1 of 2018

A number of high profile M&As continued to be announced in the first quarter 2018.

Takeda looked to take on TiGenix for €1.78 per share in cash and €1.78 per American Depositary Share; a total of €520 million ($612.44 million). TiGenix focuses on allogenic, or donor-derived, expanded stem cell-based treatments including Crohn’s-related fistula therapy Cx-601, which Takeda is developing under a separate agreement. Celgene may make an approach for Impact Biomedicines with myelofibrosis and polycythemia vera treatment fedratinib at the heart of a $2.35 billion offer consisting of $1.1 billion upfront and $1.25 billion in milestones. The deal would close in the same quarter.


Editor’s Note: All data contributing to this analysis was sourced from Cortellis Deals Intelligence from Clarivate Analytics. For more information: