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Focus on complementary products to develop existing portfolio drives M&A activity

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M&A activity in the pharmaceutical sector was focused on advancing the development of promising products through complementary offerings.

In line with the above trend, Merck agreed to acquire Idenix Pharmaceuticals, a US-based biopharma company for approximately $3.85 billion. This acquisition provides Merck with an access to a portfolio of hepatitis C candidates, which complements its hepatitis C therapies that are under development. In addition, the transaction would allow Merck to advance the development of a once-daily, oral, ribavirin-free, pan-genotypic regimen. This transaction supports the company’s strategy to deploy capital through external innovation to drive future growth.

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

In another key deal, Teva Pharmaceutical Industries agreed to acquire Labrys Biologics, a US-based biotechnology company for approximately $825 million. The addition of Labrys’ LBR-101 programme targeting high frequency episodic and chronic migraine complements Teva’s recent pipeline addition of Zecuity, a therapeutic for the acute treatment of migraine that has been obtained through the acquisition of NuPathe. This transaction allows Teva to continue Labrys’ efforts to advance the LBR-101 programme and adds a migraine prophylaxis dimension to Teva’s extensive pain care franchise, which includes a range of investigational, approved and marketed treatments for migraine, cancer pain and chronic pain.

Top M&A deals (Jun 2014)
Rank
Date
Target
Acquirer
Deal value ($m)
1
06/09/14 Idenix Pharmaceuticals, Inc. (US) Merck & Co., Inc. (US)
3850.00
2
06/03/14 Labrys Biologics, Inc. (US) Teva Pharmaceutical Industries, Ltd. (IL)
825.00
3
06/23/14 OAO Veropharm; Limited Liability Company Garden Hills Abbott Laboratories (US)
629.88
4
06/24/14 DAVA Pharmaceuticals, Inc. (US) Endo International plc (IE)
600.00
5
06/02/14 Genia Technologies, Inc. (US) Roche Holding, Ltd. (CH)
350.00
6
06/11/14 Medreich, Ltd. (IN) Meiji Seika Pharma Co., Ltd. (JP)
290.00
7
06/17/14 WEIFA AS (NO) Aqualis ASA (NO)
183.70
8
06/30/14 Precision Genome Engineering, Inc. (US) bluebird bio, Inc. (US)
139.90
9
06/02/14 Oso Biopharmaceuticals Manufacturing, LLC (US) Albany Molecular Research, Inc. (US)
110.00
10
06/20/14 ECR Pharmaceuticals Company, Inc. (US) Valeant Pharmaceuticals International, Inc. (CA)
41.00
Source: Medtrack

M&A activity decreased in volume and value terms, when compared to the average of the previous six months’ (Dec 2013 – May 2014). According to Datamonitor’s Medtrack database, the pharma sector recorded 26 M&A transactions in June 2014, against the previous six months’ average of 31.5 transactions. In value terms, the sector recorded deals worth $7.1 billion, against the previous six months’ average of $15.7 billion.

The Indian pharma sector witnessed one deal in June 2014, against the average of 0.5 deals over the previous six months, in which Japan-based Meiji Seika Pharma agreed to acquire an India-based pharma company Medreich, for $290 million. This acquisition enables Meiji Seika Pharma to obtain a manufacturing infrastructure in order to achieve cost-competitive production, capacity expansion and broaden its sales network of generic drugs in India, Asia and Africa. In addition, Meiji Seika Pharma would be able to expand its contract development and manufacturing organisation business leveraging Medreich’s blue chip customer base and its expertise in quality control and regulatory compliance.

Figure: Venture financing trend analysis
Source: Medtrack

Venture funding

Companies raised $139.9 million during June 2014, against the previous six months’ average of $300.6 million. In terms of volume, the sector recorded 10 venture funded deals, when compared to the previous six months’ average of 15.3 transactions.

Top venture financing deals (Jun 2014)
Rank
Date
Target
Investors
Deal value ($m)
1
06/16/14 JHL Biotech, Inc. (TW) Milestone Capital Partners Limited; President International Development Corporation (PIDC); Fubon Financial Holding Co., Ltd.; Taishin Financial Holding Co., Ltd.; TaiAn Technologies Corporation; Hotung Group; China Development Industrial Bank; Kleiner Perkins Caufield & Byers; Biomark Capital; Allen Chao; Undisclosed Investors
35
2
06/23/14 Dimension Therapeutics (US) OrbiMed Capital LLC; Fidelity Biosciences
30
3
06/17/14 True North Therapeutics, Inc. (US) Kleiner Perkins Caufield & Byers; MPM Capital; SR One; Biogen Idec New Ventures; Baxter Ventures
22
4
06/04/14 Trevi Therapeutics, Inc. (US) TPG Biotech (US)
15
5
06/04/14 Complexa, LLC (US) Jafco Life Science Investment; Undisclosed Investors
13
Source: Medtrack

Notes

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.

For more information, visit us at www.medtrack.com

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.

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