Value of Pharmaceutical and Healthcare Deals Increased 75% in Q2 2012

Tuesday 4 September 2012, Amsterdam

This report is an essential source of data and trend analysis on partnerships, licensing, mergers and acquisitions (M&A) and financing in the pharmaceutical and healthcare market. The report provides detailed information on partnerships, licensing agreements, M&As, equity/debt offerings, private equity and venture financing transactions that occurred in the pharmaceutical and healthcare industry in Q2 2012. The report presents detailed comparative data on the number of deals and their value in the past five quarters subdivided into deal types, segments, and geographies. The report also offers information on the top venture capital and advisory firms in the pharmaceutical and healthcare industry.

The derived data presented in this report from proprietary in-house Pharma eTrack deals database and through primary and secondary research.

Some High Value Deals Contribute Much To Deal Value In Q2 2012

M&A deals, including asset purchases, reported an increase in values in Q2 2012 with acquiring companies prepared to pay a higher price for their acquisitions. The pharmaceutical and healthcare industry reported deals worth $67.6 bn in Q2 2012, as compared to $15.6 bn in Q1 2012. On a year-on-year basis, the value of pharmaceutical and healthcare deals increased in Q2 2012, when compared to $45.9 bn. However, the number of deals decreased to 213 in Q2 2012 from 236 in Q1 2012. On a year-on-year basis, the number of deals decreased 33% in Q2 2012, when compared to 319 deals in Q2 2011. In Q2 2012, 13 pharmaceutical and healthcare deals exceeded the $1 bn mark.

The central nervous system therapeutics market accounted for the majority of M&A deals in Q2 2012. The market recorded 21 deals worth $10.6 bn in Q2 2012. Oncology therapeutics market was in second place with 18 deals worth $12.3 bn.

Nestle announcing the acquisition of Pfizer Nutrition from Pfizer for $11.85 billion, Walgreen announcing the acquisition of 45% stake in Alliance Boots from KKR and AXA Private Equity for $6.7 bn, Watson Pharma announcing the acquisition of Swiss company Actavis Group for up to $5.92 bn, Bristol-Myers Squib announcing the acquisition of Amylin Pharma for $5.3 bn and DaVita announcing the acquisition of HealthCare Partners, a doctor network operator, for up to $4.7 bn were some of the high value deals in Q2 2012.

According to Khaleeq Zakariya, Analyst at GlobalData, “Mergers and acquisitions deal value has increased in an exceptional and upsurge manner in Q2 2012 as compared to last past quarter. This was the first massive increase in the deal value from the past four consecutive quarters. This significant rise in deal value witnessed due to some high value deals took place in North America and European regions.”

Deal Values Of Partnerships Decline In Q2 2012

Partnership deals reported a marginal increase in the number of deals and a decline in deal values in Q2 2012 with 184 deals worth $1.6 bn, as compared to 182 deals worth $4.5 bn in Q1 2012. On a year-on-year basis, the number of deals and deal values decreased 27% and 15%, respectively, in Q2 2012, when compared to 254 deals worth $1.9 bn in Q2 2011.

Of the 184 deals reported in Q2 2012, 109 were co-development deals, 32 were co-marketing deals, 28 were related to other category and 15 were joint venture deals. In Q2 2012, the oncology therapeutics market recorded much of the partnership transactions with 35 deals worth $1 bn in Q2 2012.

Merck & Co., Inc., a global health care company, entering into a co-development agreement worth $1 bn with Endocyte, Inc., a biopharmaceutical company, to develop and commercialize vintafolide (EC145), a novel investigational therapeutic candidate, was one of the major partnership transactions reported in Q2 2012. Vintafolide is currently being evaluated in a Phase III clinical trial for platinum-resistant ovarian cancer and a Phase II trial for non-small cell lung cancer,

Licensing Agreements Decline 30% in Number In Q2 2012

Licensing deals in pharmaceutical and healthcare industry declined 30% in Q2 2012 with 95 deals, as compared to 137 deals in Q1 2012. Deal values also decreased to $2.2 bn in Q2 2012 from $3.1 bn in Q1 2012, reflecting a decrease of 28%. On a year-on-year basis, the number of deals and deal values decreased in Q2 2012, when compared with 138 deals worth $7.6 bn in Q2 2011.

In Q2 2012, for receiving the rights of the products, companies in the industry have paid $456.9m as upfront fees and agreed to pay $1.5 bn as milestone fees. Companies in the industry continue to focus on the oncology therapeutics market. The market recorded 20 licensing deals worth $561m in Q2 2012.

In licensing by phase, products in Pre Clinical phase recorded 93 deals, accounting for 22% of the total deals from Q2 2011 to Q2 2012. In second place, products in Marketed phase accounted for 22% of the deals. In deal values, Pre Clinical products accounted for 41% of the deal value.

Some of the high-value licensing deals in Q2 2012 include AC Immune SA, a biopharmaceutical company, entering into a second exclusive, worldwide licensing agreement worth $420.9m with Genentech, Inc., a biotechnology company and member of F. Hoffmann-La Roche Ltd., for the research, development and commercialization of AC Immune’s anti-Tau antibodies for the potential treatment of Alzheimer’s disease and other neurodegenerative diseases; Basilea Pharmaceutica International Ltd., a subsidiary of Basilea Pharmaceutica Ltd., entering into an exclusive worldwide agreement worth $303.2m with Stiefel Laboratories, Inc., a pharmaceutical company and subsidiary of GlaxoSmithKline plc, for Toctino (oral alitretinoin), for the treatment of adults with severe chronic hand eczema unresponsive to potent topical corticosteroids and F. Hoffmann-La Roche Ltd. (Roche), a global healthcare company, entering into a licensing agreement worth $299.4m with Savira Pharmaceuticals GmbH, a drug development company, to develop small molecule polymerase inhibitors for the treatment of influenza virus infections.

Pharmaceutical And Healthcare Industry Reports A Decline In VC Funding In Q2 2012

Venture capital deals and deal values in pharmaceutical and healthcare industry reported a decline in Q2 2012 with 219 deals worth $1.3 bn as compared to 242 deals worth $1.4 bn in Q1 2012. On a year-on-year basis, the number of deals increased and deal values decreased in Q2 2012, when compared to 162 deals worth $1.7 bn in Q2 2011. Of the 219 deals recorded in Q2 2012, 137 were start-up stage financing deals worth $669.3m, 59 were growth/ expansion stage financing deals worth $360.8m, 15 were later stage financing deals worth $220m and eight were seed stage financing deals worth $10.4m.

All Regions Record A Decline Deals In Q2 2012

North America recorded a decrease in the number of deals and a sharp increase in deal values with 618 deals worth $56.8 bn in Q2 2012, as compared to 728 deals worth $35.5 bn in Q1 2012. On a year-on-year basis, the number of deals decreased and deal values increased in Q2 2012, when compared to 724 deals worth $54 bn in Q2 2011.

Europe recorded a decrease in the number of deals and an increase in deal values in Q2 2012 with 241 deals worth $32.6 bn, as compared to 248 deals worth $13 bn in Q1 2012. On a year-on-year basis, the number of deals decreased and the deal values increased in Q2 2012, when compared to 318 deals worth $28.2 bn in Q2 2011.

Asia Pacific recorded a decline in the number of deals and deal values with 163 deals worth $6.4 bn in Q2 2012, as compared to 210 deals worth $8.7 bn in Q1 2012. On a year-on-year basis, the number of deals and the deal values decreased in Q2 2012, when compared to 263 deals worth $14.3 bn in Q2 2011.