Now that Donald Trump has transitioned from presidential candidate to president-elect, his pro-business views have cheered many deal makers. His “repeal and replace” pronouncements regarding the Affordable Care Act have chilled some areas of the healthcare market, but others are thriving.
Biotechnology is one sector that was already experiencing a boom in mergers and acquisitions, prior to November 8. Third-quarter deal volume surged 58%, to 52 transactions. Sixteen deals were recorded in October 2016, and in the first two weeks of November, 12 are already in our database. Ten of those are license agreements, as pharmaceutical companies swoop in to claim promising product candidates, and two are full-on acquisitions of a biotech company.
Here’s what has transpired, through November 11.
In November 1, Celldex Therapeutics, Inc. (NASDAQ:CLDX) paid $62.5 million for privately held Kolltan Pharmaceuticals, Inc., a clinical-stage company focused on the discovery and development of novel, antibody-based drugs targeting receptor tyrosine kinases (RTKs). Upon closing, Celldex’s clinical pipeline will include seven drug candidates such as therapeutic antibodies, antibody-drug conjugates and immune system modulators, as well as two active preclinical programs. Kolltan may receive additional milestone payments of up to $172.5 million.
The next day, privately held LifeNet Health Inc. acquired privately held Vivo Biosciences Inc. for an undisclosed amount. Vivo Biosciences was the first to develop all human bioassay platforms for accelerating drug discovery, disease therapeutics and certain stem-cell applications. This acquisition marks LifeNet’s entry into personalized medicine and builds on the platforms of tissue recovery and cellular products. The acquired technologies can help pharmaceutical companies make their drug-discovery processes more efficient and economical.
The 10 remaining biotech purchases are all development and/or commercialization license deals for clinical candidates, with targets ranging from an oncolytic virus platform shown to have beneficial features for fighting cancer, to amniotic stem cells for the purpose of developing a pipeline for male and female infertility.
Three of the sellers are academic institutions, including Stanford University, University of Florida, Gainesville, and The University of California System. Acquirers range from household names like Bristol-Myers Squibb (NASDAQ: BMS) to lesser known, privately held biotech firms like EnBiotix, Inc.
We expect a lot more action in this sector, particularly if the Trump administration eases regulations on corporate tax inversions. Buckle up, it could be a bumpy ride.