M&A activity in the pharmaceutical sector witnessed significant increase in value terms with a focus on expanding complementary product pipelines in core therapy areas. The pharma sector recorded M&A deals worth $19 billion during May 2013, an increase of seven times over the previous six months’ average of $2.7 billion.
In line with the above trend, Actavis agreed to acquire Warner Chilcott, a US-based specialty therapeutics company, for approximately $8.5 billion. This acquisition augments Actavis’ specialty brands business in core areas of women’s health and urology and also adds gastroenterology and dermatology therapeutic categories along with marketing infrastructure.
| Figure: M&A (including private equity) trend analysis |
| Source: Medtrack |
This transaction will enhance the value of each company’s portfolio and provide a substantial foundation to support the successful launch of new products over the next several years, particularly in women’s health, including Minastrin 24 Fe; Esmya; metronidazole vaginal gel 1.5 per cent; the progestin-only contraceptive patch and other complementary products under development.
In another key deal, UK-based AstraZeneca agreed to acquire Omthera Pharmaceuticals, a US-based specialty pharma company for approximately $443 million. This transaction complements AstraZeneca’s existing portfolio in cardiovascular and metabolic disease, one of its core therapy areas.
| Top M&A deals (May 2013) | ||||
|
Rank
|
Date
|
Target
|
Acquirer
|
Deal value ($m)
|
| 1 | 05/27/13 | Bausch & Lomb Incorporated (US) | Valeant Pharmaceuticals International, Inc. (CA) | 8700.00 |
| 2 | 05/20/13 | Warner Chilcott Plc (US) | Actavis, Inc. (US) | 8500.00 |
| 3 | 05/28/13 | Omthera Pharmaceuticals, Inc. (US) | AstraZeneca PLC (GB) | 443.00 |
| 4 | 05/22/13 | DOC Generici s.r.l. (IT) | Charterhouse Capital Partners LLP (GB) | 425.19 |
| 5 | 05/29/13 | Okairos AG (IT) | GlaxoSmithKline plc (GB) | 322.60 |
| 6 | 05/08/13 | Inviragen, Inc. (US) | Takeda Pharmaceutical Company Limited (JP) | 245.00 |
| 7 | 05/01/13 | Intrexon Corporation (US) | Randal J. Kirk; Third Security, LLC; Undisclosed Investors | 150.00 |
| 8 | 05/02/13 | Symphogen A/S (DK) | Novo A/S; Pensionskassernes Administration A/S; Danica Pension | 54.06 |
| 9 | 05/15/13 | Tokai Pharmaceuticals, Inc. (US) | Apple Tree Partners; Novartis Venture Funds; Undisclosed Investors | 35.50 |
| 10 | 05/13/13 | Dyax Corp. (US) | RA Capital Management, LLC; Venrock; Federated Investors, Inc.; Undisclosed Investors | 30.00 |
| Source: Medtrack | ||||
With this acquisition, AstraZeneca will gain access to Epanova, a novel omega-3 free fatty acid composition being developed for dyslipidemia treatment.
In another high value deal, Canada-based Valeant Pharmaceuticals agreed to acquire Bausch + Lomb, a US-based eye health company, for $8.7 billion. The transaction will significantly strengthen Valeant’s capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and ophthalmic surgical devices and instruments.
M&A activity in the pharma sector decreased in volume and increased in value terms, when compared to the average of previous six months (Nov 2012 – Apr 2013). According to Datamonitor’s Medtrack database, the pharma sector recorded 22 M&A transactions in May 2013, against the previous six months’ average of 34.5 transactions. In value terms, the sector recorded deals worth $19 billion against the previous six months’ average of $2.7 billion.
The Indian pharma sector witnessed no deals during May 2013, against the average of one deal over the previous six months.
| Figure: Venture financing trend analysis |
| Source: Medtrack |
Venture Funding
Companies in the pharma sector raised $202.4 million during May 2013, against the previous six months’ average of $298.1 million. In terms of volume, the sector recorded 10 venture funded deals, when compared to the previous six months’ average of 23.6 transactions.
| Top venture financing deals (May 2013) | ||||
|
Rank
|
Date
|
Target
|
Investors
|
Deal value ($m)
|
| 1 | 05/09/13 | Trevena, Inc. (US) | Forest Laboratories Holdings, Ltd.; Alta Partners; HealthCare Ventures LLC; Yasuda Enterprise Development Co., Ltd.; New Enterprise Associates, Inc.; Polaris Venture Partners | 60.0 |
| 2 | 05/29/13 | Ophthotech Corp. (US) | Novo A/S; Clarus Ventures, LLC; SV Life Sciences; HBM Healthcare Investments Ltd | 50.0 |
| 3 | 05/20/13 | eFFECTOR Therapeutics, Inc. (US) | U.S. Venture Partners; Abingworth Management Limited; Novartis Venture Funds; SR Onep; Astellas Venture Management LLC; Osage University Partners; Mission Bay Capital, LLC | 45.0 |
| 4 | 05/08/13 | Lumena Pharmaceuticals, Inc. (US) | Pappas Ventures; RiverVest Venture Partners; Alta Partners | 23.0 |
| 5 | 05/28/13 | Trino Therapeutics (IE) | Fountain Healthcare Partners; Enterprise Ireland; Growcorp Group Limited; Wellcome Trust | 11.6 |
| 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.
Definitions:
1. Deal value trend is based on transactions where associate values have been disclosed.2. Trend analysis excludes rumored and terminated deals.3. Value and volume analysis excludes private equity exits.
For more information, visit at www.medtrack.com