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Biotech M&A Strategies: Deal Assessments, Trends and Future Prospects
Business Insights, Oct 2008, Pages: 110
M&A activity in the pharma industry continues to gain momentum as a growing number of companies seek to replenish drug pipelines through biotechnology acquisitions. M&As between biotech companies are also growing in number, stimulated by the drive to strengthen product portfolios and expand participation in the growing global biotech market. Such deal activity is expected to become an increasingly prominent feature in the biotech sector over the next few years. Over 68% of respondents to a recent proprietary survey carried out for this report believe that M&A initiatives will be integral to the continued success of their company.
‘Biotech M&A Trends: Deal Assessments, Trends and Future Prospects’ analyses trends in biotech M&A deals valued below $1bn across mid/small-sized pharma and biotech companies, including niche biopharma players and diagnostics/medical technology businesses. Trends in the value, volume and geographical distribution of deals are examined based on M&A activity since 2003 and a proprietary survey reveals how over 130 industry executives perceive the future of biotech M&As. This report identifies the key factors influencing transactions with an evaluation of over 50 recent deals, in addition to providing a comprehensive case study analysis detailing the strategies behind five major M&A’s.
Some key findings from this report...
- US companies accounted for 42% of acquiring companies and 41% of targets in global biotech M&A deals over the 2003-2008 period. UK companies were the second most active as acquirers and targets.
- 4% of M&A deals since 2003 have been valued at more than $500m, while 70% were for less than $100m. The average deal value for the five year period was $94m. Figures are based upon the 378 M&A deals during this period for which values were disclosed.
- Marketed products and technology access continue to be the key drivers of M&A. Of recent M&A deals, 46% have been founded upon targets with commercialized products, while 34% were geared to harness technology platforms.
- Cash is the main payment mechanism for M&A deals. Of the 50 most recent deals for which values are known, 54% were cash-only, while a further 18% were for cash and future milestone payments.
- M&A will be an important source of future company growth. 45% of respondents to a proprietary survey expect over 20% of their company’s future growth to stem from M&A.
Top reasons to order your copy today
- Identify the latest trends in M&A activity with this report’s detailed analysis of deal values and volumes over the 2003-2008 period and a geographical breakdown of target and acquirer locations.
- Understand the critical factors influencing M&A transactions, discover the key selection criteria when assessing potential biotech targets and determine the main M&A payment mechanisms by using this report’s examination of 50 biotech M&A deals since 2007.
- Benchmark M&A strategies used to successfully expand product portfolios and geographical presence with this report’s case study analysis of 5 major recent M&A deals including Actelion/Axovan & CoTherix, Antisoma/Xanthus, Forest Labs/Cerexa, Solvay Pharma/Innogenetics, Avant Immunotherapeutics/Celldex Therapeutics.
- Evaluate the future landscape for biotech M&A’s and discover the key influences that will drive future biotech M&A transactions with this report’s assessment of trends in M&A combinations and therapeutic area targeting in addition to the potential impact of reverse mergers.
Key issues examined in this report...
- Economic gloom is driving M&A activity. The current economic climate has contributed to an increasingly cautious investment market that has driven trade sales by biotech investors. Biotech acquisitions are more attractive to pharma companies than complex licensing deals which can cost as much as gaining total control through acquisition.
- Shifting trends in acquirers and targets. Chinese firms are an appealing target for companies seeking to access the rapidly growing Asian biopharmaceutical market. Indian companies are becoming aggressive acquirers, having accounted for 12% of deals in 2008.
- Acquirer priorities. Approved or late-stage products and technology platforms are priorities for acquiring companies. Products in the early stages of development typically attract smaller acquisition values.
- Influence of personalized medicine. Pharma firms will increasingly target diagnostic companies as part of efforts to advance their product development activities with molecular techniques. In this way, personalized medicine and targeted therapies will begin to blur the boundaries between pharmaceuticals and diagnostics.
Your questions answered...
- What are the key selection criteria when assessing potential biotech targets?
- How important are M&A initiatives in relation to company success in the short to mid-term future?
- Why are M&A strategies attractive to a growing number of companies?
- What are the main challenges in M&A dealmaking and how can these be overcome?
- How can biotech companies maximize their value prior to an acquisition?
- What are the current trends in M&A deals valued at less than $1bn?
- Which recently adopted M&A strategies have proven to be the most effective?
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