MCOs Make Deals to Combat High Drug Costs

The rising cost of prescription drugs was part of many candidates’ campaign platforms in the 2016 national elections. The topic has not gone away, and is certainly a factor in the dearth of Big Pharma deals in 2017.  Through June 15, M&A in the Pharma sector is down 43%, to 44 transactions, compared with the same period in 2016, which had 77 transactions. Spending is also down in for the first six months of 2017. Through June 15, acquirers announced $19.2 billion in committed financing, down 66% from the same period in 2016, when approximately $56.5 billion was spent. There are deals being done, regarding this issue, but most are not M&A. In fact, several managed care... Read More »

Perrigo Lets Go of Tysabri Royalties

What goes around comes around. It doesn’t seem that long ago that the Dublin-based drug firm Elan Corporation plc was fighting off the hostile advances of Royalty Pharma. It was July 2013, in fact, when Elan agreed to be acquired by Perrigo (NYSE: PRGO) for $8.6 billion. To refresh the memory, Elan was a biotech company whose portfolio included royalties from Tysabri®, a multiple sclerosis treatment, and a neuropsychiatric pipeline with near-term value creation potential.  Early February 2013, Elan sold half of its rights to Tysabri to Biogen Idec, now known as Biogen Inc. (NASDAQ: BIIB), for $3.25 billion. At the time, the terms called for $3.25 billion upfront cash plus 12% of... Read More »

Big Pharma Pays Big for Biotech Pipelines

The pharmaceutical industry has largely given up on in-house research and development, saying that the R&D timeline is too costly, long and uncertain to fund with shareholders’ money. The industry has gone from bolt-on acquisitions of smaller companies with marketed products to battling it out for clinical-stage drug candidates. What’s surprised some industry observers is that these acquirers are now targeting early-stage and even pre-clinical drug candidates, to boost their own production pipelines, but as a way to stymie the competition, too. Pharmaceutical mergers and acquisitions hit a peak in 2014, with 188 deals (up 25% year-over-year) and $213.3 billion in spending (up 220%... Read More »

AbbVie Buys a Pipeline

After only four deals announced in 2014 and 2015, AbbVie (NYSE: ABBV) gained momentum in the M&A space this year in an effort to expand and diversify its portfolio. The timing isn’t a coincidence, since it faces the looming expiration of Humira’s patent in December. The drug that accounted for 63% of AbbVie’s 2014 sales could lose its dominant position in the autoimmune disease market as competitive generics take the field. In the first four months of 2016, AbbVie has dished out $6.4 billion on three deals (two collaborations and one acquisition). On March 7th, the company announced a collaboration with Boehringer Ingelheim that added anti-IL-23 to its immunology pipeline. The... Read More »

March 2016’s Biggest Health Care Deals

Health care companies are still attracting buyers, and those in the services sectors seem to be the hottest. Last month saw healthy deal volume, at 134 transactions. For a year that started slowly for health care mergers and acquisitions, March 2016’s deal volume is only 3% lower than the same month a year ago. Industry sources have noted the dearth of deals across many industries going into March, even though some uncertainties that troubled markets earlier this year, such as China’s economic slow down, haven’t occupied center stage recently. Leverage is not an overwhelming concern, but credit has tightened over the past few months. And with the new, more onerous federal rules regarding... Read More »