M&A activity in the pharmaceutical market witnessed significant increase in value terms with a focus on high-growth markets
The pharma sector recorded 41 M&A transactions in April 2012 against the previous six months’ average of 54.8 transactions. In value terms, the sector recorded deals worth $22.7 billion against the previous six months’ average of $5.9 billion
Mergers and Acquisitions
The pharmaceutical sector recorded M&A deals worth $22.7 billion during April 2012, an increase of 3.8 times over the previous six months’ average of $5.9 billion. M&A activity in the pharma market was focused on expansion into high-growth markets.In line with the above trend, Switzerland-based Nestle agreed to acquire the infant nutrition business of Pfizer, a US-based biopharmaceutical company, for $11.8 billion. With this acquisition, Nestle will gain access to the complementary portfolio of infant nutrition.
The transaction also provides Nestle access to high-growth emerging markets which include China, Philippines, Thailand, Indonesia, Middle East and Mexico.
| M&A (including private equity) trend analysis |
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The sale of nutrition business to Nestle enables Pfizer to focus on investing in other business development opportunities like, developing new biotechnology drugs and a new planned focus on treatment of ‘rare diseases’ which is built around certain niche indications like muscular dystrophy and other serious genetic mutation diseases. In another key deal, US—based Watson Pharmaceuticals agreed to acquire Actavis, an Iceland-based generic pharma company, for approximately $5.9 billion. With this acquisition, Watson Pharmaceuticals doubles its international access and strengthens its commercial position in established European markets and emerging growth markets, including central and Eastern Europe and Russia.
| Top M&A deals (Apr 2012) | ||||
| Rank | Date | Target | Acquirer | Deal value ($m) |
| 1. | Apr 23, 2012 | Pfizer, Inc. – Infant Nutrition Business (US) | Nestle S.A. (CH) | 11,850.00 |
| 2. | Apr 25, 2012 | Actavis Group hf (IS) | Watson Pharmaceuticals, Inc. (US) | 5,927.36 |
| 3. | Apr 23, 2012 | Ardea Biosciences, Inc. (US) | AstraZeneca PLC (GB) | 1,260.00 |
| 4. | Apr 11, 2012 | URL Pharma, Inc. (US) | Takeda America Holdings, Inc. (US) | 800.00 |
| 5. | Apr 25, 2012 | MN Pharmaceuticals (TR) | Amgen, Inc. (US) | 700.00 |
| 6. | Apr 26, 2012 | EUSA Pharma, Inc. (US) | Jazz Pharmaceuticals plc (IE) | 700.00 |
| 7. | Apr 10, 2012 | KAI Pharmaceuticals, Inc. (US) | Amgen, Inc. (US) | 315.00 |
| 8. | Apr 20, 2012 | GlaxoSmithKline plc – OTC brands (GB) | Aspen Global Incorporated (MU) | 230.98 |
| 9. | Apr 5, 2012 | Allos Therapeutics, Inc. (US) | Spectrum Pharmaceuticals, Inc. (US) | 206.00 |
| 10. | Apr 12, 2012 | Pervasis Therapeutics, Inc. – Assets (US) | Shire plc (GB) | 200.00 |
| 11. | Apr 5, 2012 | Eurovet Animal Health BV (NL) | Dechra Pharmaceuticals PLC (GB) | 177.87 |
| Source: MedTRACK | ||||
The transaction also expands Watson pharmaceuticals’ global OTC presence and significantly increases scale of ex-US generics business. In line with similar trends, US-based Amgen agreed to acquire Mustafa Nevzat Pharmaceuticals, a Turkish pharma company, for $700 million. The transaction will significantly expand Amgen’s presence in Turkey and the surrounding region, which are large, fast-growing, priority markets for Amgen. The M&A activity in the pharma sector decreased in volume terms, however, it witnessed a substantial increase in value terms, when compared to the average of previous six months (Oct 2011–Mar 2012).
According to Datamonitor’s MedTRACK database, the pharma sector recorded 41 M&A transactions in April 2012 against the previous six months’ average of 54.8 transactions. In value terms, the sector recorded deals worth $22.7 billion against the previous six months’ average of $5.9 billion. The Indian pharma sector witnessed one deal during April 2012, against the average of 2.3 deals over the previous six months in which India-based Agila Specialties acquired sterile formulation facility from Strides Arcolab for $23.47 million. The acquisition provides immediate incremental capacity to Strides Arcolab and enables it to expand its core injectible business.
| Venture financing trend analysis |
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Venture Funding
Companies in the pharma sector raised $181.2 million during April 2012, against the previous six months’ average of $348.4 million. In terms of volume, the sector recorded 16 venture funded deals, compared to the previous six months’ average of 27.5 transactions.
| Top venture financing deals (Apr 2012) | ||||
| Rank | Date | Target | Investors | Deal value ($m) |
| 1. | Apr 19, 2012 | Alder Biopharmaceuticals Inc. (US) | Sevin Rosen Funds; Ventures West Capital Ltd; WRF Capital; Novo Ventures; H.I.G. Ventures, LLC; Delphi Ventures; TPG Biotech | 38.00 |
| 2. | Apr 2, 2012 | AlloCure, Inc. (US) | Lundbeckfond Ventures; SV Life Sciences; Novo A/S | 25.00 |
| 3. | Apr 24, 2012 | Argos Therapeutics, Inc. (US) | Caisse de depot et placement du Quebec; The Aurora Funds, Inc.; Morningside Group (Holdings) Limited; Intersouth Partners; Lumira Capital Corp; TVM Capital Group; Forbion Capital Partners | 25.00 |
| 4. | Apr 24, 2012 | miRagen Therapeutics, Inc. (US) | Remeditex Ventures, LLC; Atlas Venture; Boulder Ventures, Ltd.; Amgen Ventures; Broadview Ventures, Inc. | 20.00 |
| 5. | Apr 25, 2012 | Telsar Pharma, Inc. | InterWest Partners, LLC; Sutter Hill Ventures; Astellas Venture Management LLC | 14.00 |
| 6. | Apr 2, 2012 | Adimab, Inc. (US) | Google Ventures; Polaris Venture Partners; SV Life Sciences; Borealis Ventures; OrbiMed Advisors, LLC | 13.80 |
| 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.
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 rumoured and terminated deals.
3.Value and volume analysis excludes private equity exits.
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