M&A activity in the pharmaceutical sector in March 2013 was focused on diversification of product pipelines, in order to expand market presence.
In line with the above trend, Canada-based Valeant Pharmaceuticals agreed to acquire Obagi Medical, a US-based specialty pharma company, for approximately $360 million. This transaction will strengthen and diversify Valeant’s dispensed portfolio and also expand its market presence, focusing on dermatologists and plastic surgeons.
| Figure: M&A (including private equity) trend analysis |
| Source: Medtrack |
The acquisition of Obagi will be a valuable supplement to Valeant’s current dermatology portfolio and will further build upon their growing aesthetics franchise. With this acquisition, Valeant will gain access to dermatology brands including Obagi Nu-Derm, Condition and Enhance, Obagi-C Rx, ELASTIDerm and CLENZIDerm.
In another key deal, Ireland-based Shire agreed to acquire SARcode Bioscience, a US-based biopharmaceutical company, for approximately $160 million. This transaction will help Shire to focus on building research and development pipeline with innovative, well-differentiated assets.
This transaction will also help Shire to expand its presence in the ophthalmology therapeutic category. With this acquisition, Shire will gain access to LIFITEGRAST, a phase III compound currently under development for the signs and symptoms of dry eye disease.
| Top M&A deals (March 2013) | ||||
|
Rank
|
Date
|
Target
|
Acquirer
|
Deal value ($m)
|
|
1.
|
03/20/13
|
Obagi Medical Products, Inc. (US) | Valeant Pharmaceuticals International, Inc. (CA) |
360.00
|
|
2.
|
03/06/13
|
Althea Technologies, Inc. (US) | Ajinomoto Co., Inc. (JP) |
175.00
|
|
3.
|
03/25/13
|
SARcode Bioscience, Inc. (US) | Shire plc (IE) |
160.00
|
|
4.
|
03/12/13
|
Chiatai Qingchunbao Pharmaceutical Co., Ltd. (CN) | Shanghai Pharmaceuticals Holding, Co., Ltd. (CN) |
70.84
|
|
5.
|
03/07/13
|
PTC Therapeutics, Inc. (US) | Brookside Capital Partners Fund, L.P.; Adage Capital Management L.P.; Jennison Associates LLC; Longwood Fund; Credit Suisse First Boston Equity Partners, L.P.; HBM Healthcare Investments Ltd; Vulcan Capital; Celgene Corporation; Delphi Ventures; Novo A/S; The Column Group |
60.00
|
|
6.
|
03/04/13
|
Progenika Biopharma, S.A. (ES) | Grifols, S.A. (ES) |
48.18
|
|
7.
|
03/25/13
|
Ipca Laboratories Limited (IN) | ChrysCapital (MU) |
40.00
|
|
8.
|
03/26/13
|
Novartis AG – Cardioxane (CH) | Clinigen Group plc (GB) |
33.00
|
|
9.
|
03/14/13
|
MedVend, LLC (US) | Medbox, Inc. (US) |
5.15
|
| Source: Medtrack | ||||
M&A activity in the pharma sector decreased in both volume and value terms, when compared to the average of previous six months’ (September 2012–February 2013). According to Datamonitor’s Medtrack database, the pharma sector recorded 28 M&A transactions in March 2013, against the previous six months’ average of 35.8 transactions. In value terms, the sector recorded deals worth $1 billion against the previous six months’ average of $3.1 billion.
The Indian pharma sector witnessed one deal during March 2013, against the average of zero deals over the previous six months in which Mauritius-based ChrysCapital acquired approximately four per cent stake in Ipca Laboratories, a pharma company, for $40 million.
| Figure: M&A (including private equity) trend analysis |
| Source: Medtrack |
Venture funding
Companies in the pharma sector raised $55 million during March 2013, against the previous six months’ average of $350.9 million. In terms of volume, the sector recorded 14 venture funded deals, compared to the previous six months’ average of 25.8 transactions.
| Top venture financing deals (March 2013) | ||||
|
Rank
|
Date
|
Target
|
Investors
|
Deal value ($m)
|
|
1
|
03/13/13
|
NABsys, Inc. (US) | Bay City Capital LLC; Point Judith Capital; Stata Venture Partners LLC |
20.00
|
|
2
|
03/25/13
|
Theraclone Sciences, Inc. (US) | ARCH Venture Partners; Canaan Partners; MPM Capital; HealthCare Ventures LLC; Alexandria Real Estate Equities, Inc.; Amgen Ventures; Versant Venture Management LLC; Zenyaku Kogyo Co., Ltd. |
8.00
|
|
3
|
03/20/13
|
Savara, Inc. (US) | Tech Coast Angels; Keiretsu Forum; Central Texas Angel Network; North Texas Angel Network; Undisclosed Investors |
7.40
|
|
4
|
03/21/13
|
OriGene Technologies, Inc. (US) | Qiming Venture Partners; Kleiner Perkins Caufield & Byers China; IDG-Accel Capital Partners |
6.38
|
|
5
|
03/25/13
|
Theraclone Sciences, Inc. (US) | MidCap Financial LLC; Silicon Valley Bank |
6.00
|
| Source: Medtrack | ||||
Notes and definitions
Medtrack is a comprehensive, fully integrated, global biomedical database providing information on companies, products, patents, deals, venture financing, and epidemiology. It is a live database, constantly updated with news, milestones, trial information, etc. Medtrack’s unmatched coverage is supported by a user-friendly, highly dynamic set of decision support tools and analytics. In-house analysts and researchers add key insights and conclusions to provide you with the primary and secondary information you need. Key uses of the database include competitive intelligence, target identification, screen potential licensing and investment opportunities, patent assessments, product due diligence, royalty valuations, and developmental benchmarking.
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