Deal making in the pharmaceutical sector slid further in the first quarter, down 12% to 29 deals, compared with the previous quarter, and down 28% compared with the same quarter a year ago. This quarter’s deal volume accounts for 20% of the 145 deals announced in the previous 12 months.
President Trump has continued to malign this sector in social media tweets and in public speeches for the high price of some drugs, so it’s not surprising to see M&A slacking off, for the time being. Also, drug makers’ attention is directed toward their aging product pipelines, and most of the deal activity is going to acquire the rights to promising mid- and late-phase drug candidates.
Source: HealthCareMandA.com, April 2017
Spending on deals was still strong in this quarter, in keeping with the previous three quarters. The nearly $10.2 billion total represents an 18% increase over the previous quarter, but a 78% drop compared with the same quarter a year ago. The first quarter made up 21% of the $48.4 billion spent in the previous 12 months. Thirteen of the 29 deals disclosed prices.
Dollars Spent on Pharmaceutical Mergers & Acquisitions, by Quarter
| Q1:16 | Q2:16 | Q3:16 | Q4:16 | Q1:17 |
| $46,241,164,835 | $11,489,568,442 | $18,044,012,000 | $8,672,951,425 | $10,195,770,000 |
Oncology drug maker ARIAD Pharmaceuticals commanded the highest price in the Pharmaceuticals sector for the quarter. Takeda Pharmaceuticals acquired the company for approximately $4.7 billion in early January, making the announcement on the eve of the annual J.P. Morgan Healthcare Summit. The deal expands Takeda’s global oncology portfolio and pipeline by expanding into solid tumors and solidifying its position in hematology.
The second largest deal involved Royalty Pharma, which was formed to acquire royalty interests in marketed and late-stage biopharmaceuticals. The company paid $2.2 billion to acquire all of Perrigo Company‘s rights to receive royalty payments on sales of the multiple sclerosis drug Tysabri. Perrigo will also assign to Royalty Pharma certain information and audit rights under Perrigo’s existing agreement with Biogen.
Eli Lilly and Company boosted its emerging pain pipeline with the addition of CoLucid Pharmaceuticals and its late-stage migraine treatment, lasmiditan. The drug has completed the first of two pivotal Phase 3a trials and may be submitted for FDA approval in 2018 if the remaining trials are positive. The price was $960 million.
