M&A activity focussed on portfolio transformation


M&A (including private equity) trend analysis
Source: Medtrack

Portfolio transformation through asset swapping was the core focus of companies M&A activity, in the month of April, 2014. In line with the above trend, Switzerland-based Novartis, announced a three-part portfolio transformation transaction with GlaxoSmithKline (GSK), a UK-based healthcare company, to exchange certain assets.

As part of the above, the first transaction involves Novartis agreeing to acquire oncology products of GSK for approximately $16 billion. This acquisition will allow Novartis to strengthen its oncology business with new therapies. The addition of GSK’s products would expand Novartis’ position in targeted therapies and small molecules.

Top M&A deals (Apr 2014)
Rank
Date
Target
Acquirer
Deal value ($m)
1
Apr 22, 2014 GlaxoSmithKline plc – Oncology Business (GB) Novartis AG (CH)
16,000.00
2
Apr 22, 2014 Novartis AG – Vaccines Business (CH) GlaxoSmithKline plc (GB)
7,050.00
3
Apr 07, 2014 Questcor Pharmaceuticals, Inc. (US) Mallinckrodt, Inc. (US)
5,600.00
4
Apr 22, 2014 Novartis Animal Health, Inc. (CH) Eli Lilly and Company (US)
5,400.00
5
Apr 06, 2014 Ranbaxy Laboratories Limited (IN) Sun Pharmaceutical Industries Limited (IN)
4,000.00
6
Apr 28, 2014 Furiex Pharmaceuticals, Inc. (US) Forest Laboratories, Inc. (US)
1,100.00
7
Apr 25, 2014 Insight Pharmaceuticals Corp. (US) Prestige Brands Holdings, Inc. (US)
750.00
8
Apr 29, 2014 iPierian, Inc. (US) Bristol-Myers Squibb Company (US)
725.00
9
Apr 24, 2014 Andromeda Biotech, Ltd. (IL) Hyperion Therapeutics, Inc. (US)
570.51
10
Apr 01, 2014 Intarcia Therapeutics, Inc. (US) RA Capital Management, LLC; Farallon Capital Management,L.L.C.; Foresite Capital Management, LLC; Fred Alger Management, Inc. (Alger); New Leaf Venture Partners; Quilvest Ventures; New Enterprise Associates, Inc. (NEA); Venrock; The Baupost Group, LLC; Franklin Templeton, LLC
200.00
Source: Medtrack

In the second transaction, GSK agreed to acquire the vaccines business (excluding influenza vaccines) of Novartis for approximately $7.05 billion. This acquisition will improve GSK’s position in global vaccines business. The addition of Novartis’ Bexsero and MenABCWY will strengthen the breadth of GSK’s portfolio, notably in meningitis. Besides, it would also strengthen GSK’s manufacturing network and increase overall capacity, notably with the addition of Novartis’ secondary packaging and supply facilities in Rosia, Italy and Marburg, Germany.

In the third transaction, Novartis and GSK agreed to create a leading consumer healthcare business through a joint venture between Novartis OTC and GSK Consumer Healthcare. GSK will have a 63.5 per cent equity interest in the joint venture company, while the remaining 36.5 per cent interest will be held by Novartis. GSK will assume control of Novartis’ OTC manufacturing network. This includes Novartis’ facility in Lincoln, Nebraska.

Venture financing trend analysis
Source: Medtrack

M&A activity in the pharma sector increased in volume and value terms, when compared to the average of the previous six months (October 2013 – March 2014). According to Datamonitor’s Medtrack database, the pharma sector recorded 32 M&A transactions in April 2014, against the previous six months’ average of 32.6 transactions. In value terms, the sector recorded deals worth $41.9 billion, against the previous six months’ average of $9.3 billion.

The Indian pharma sector witnessed one deal during April 2014, against the average of 0.8 deals over the previous six months, in which Sun Pharmaceutical Industries agreed to acquire Ranbaxy Laboratories, an India-based pharmaceutical company, for approximately $4 billion. This acquisition provides Sun Pharmaceuticals with a strong complementary platform in high-growth emerging markets.Companies in the pharma sector raised $603.7 million during Apr 2014, against the previous six months’ average of $278 million. In terms of volume, the sector recorded 20 venture funded deals, when compared to the previous six months’ average of 18.5 transactions.

Top venture financing deals (Apr 2014)
Rank
Date
Target
Investors
Deal value ($m)
1
Apr 07, 2014 Adaptive Biotechnologies Corporation (US) Viking Global Investors LP (US)
100.00
2
Apr 10, 2014 NuCana BioMed Limited (GB) Sofinnova Ventures, Inc.; Sofinnova Partners; Morningside Venture Investments, Ltd.; Alida Capital International Ltd; Scottish Investment Bank
57.00
3
Apr 22, 2014 Avalanche Biotechnologies, Inc. (US) Venrock; Deerfield Management Company; Adage Capital Management, L.P.; Redmile Group; Rockspring Capital; Sabby Capital; Cowen and Company, LLC; Undisclosed Investors
55.00
4
Apr 22, 2014 Principia Biopharma, Inc. (US) Sofinnova Ventures, Inc.; Morgenthaler Ventures; New Leaf Venture Partners; OrbiMed Advisors, LLC; SR One; Mission Bay Capital, LLC; Undisclosed Investors
50.00
5
Apr 28, 2014 Kite Pharma, Inc. (US) Undisclosed Investors
50.00
Source: Medtrack

Notes

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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 us at www.medtrack.com

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