Deal Values in Pharmaceutical & Healthcare Industry Increased in Q4 2013

Merger and acquisition (M&A) deals, including asset purchases, recorded a decrease in the number of deals and an increase in deal values in Q4 2013 with 336 deals worth $41.8 billion, compared to 382 deals worth $18.9 billion in Q4 2012.

On a quarter-on-quarter basis, the number of deals and their values decreased in Q4 2013, compared to 399 deals worth $55.4 billion in Q3 2013.

The central nervous system therapeutics markets recorded the highest number of deals in Q4 2013 and stood at the top in deal activity. The market recorded 37 deals worth $9 billion in Q4 2013.

McKesson Corporation, a healthcare services and IT company, through its wholly-owned indirect subsidiary Dragonfly GmbH & Co KgaA, announcing to acquire Celesio AG, a provider of logistics and services in the pharmaceutical and healthcare sector, for a purchase consideration of €6.2 billion ($8.49 billion) or €23.5 ($32.21) per share and AstraZeneca PLC, a biopharmaceutical company, announcing to acquire the remaining 50% stake in a diabetes joint venture (JV) from Bristol-Myers Squibb Company (BMS), a pharmaceutical company, for a purchase consideration of $4.3 billion, were some of the high value deals reported in Q4 2013.

Partnership Deals Decreased In Q4 2013 :

Partnership deals reported a decrease in the number of deals and an increase in deal values in Q4 2013 with 196 deals worth $6.7 billion, as compared to 230 deals worth $4.3 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared to 208 deals worth $3.5 billion in Q3 2013.

In Q4 2013, 120 were co-development deals, 36 were co-marketing deals, 28 were joint venture deals and 12 were related to other category. Much of the partnership deals were reported in oncology therapeutics markets in Q4 2013. The market reported 39 deals worth $3.5 billion in Q4 2013.

Pharmaceutical and healthcare companies entered into 124 partnerships for Marketed stage products, which accounted for 38% of the deals from Q4 2012 to Q4 2013. Products in Discovery phase stood second with 90 deals, which accounted for 27% of the deals.

Licensing Deals Repoted A Decrease In Number In Q4 2013 :

Licensing agreements recorded a marginal decrease in the number of deals and an increase in deal values in Q4 2013 with 135 deals worth $5.7 billion, as compared to 136 deals worth $4.8 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared with 158 deals worth $4.2 billion in Q3 2013.

Licensing agreements recorded a decrease in the receipt of upfront payments and an increase in milestone payments in Q4 2013. The segment reported $261.3m and $4.3 billion as upfront and milestone payments in Q4 2013, compared to $661.3m and $3.6 billion, respectively, in Q4 2012. On a quarter-on-quarter basis, the receipt of upfront payments reported a decrease and milestone payments increased in Q4 2013, compared to $644.1m and $2.9 billion, respectively, in Q3 2013.

In licensing by phase, products in Marketed phase recorded 104 deals, which accounted for 32% of the total deals between Q4 2012 and Q4 2013. In second place, products in Phase II accounted for 24% of the deals.

Venture Capital Investments Remained Same In Q4 2013 :

The pharmaceutical and healthcare industry recorded a decrease in the number of venture capital (VC) deals and their values remained same with 237 deals worth $2.5 billion in Q4 2013, as compared to 327 deals worth $2.5 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared to 259 deals worth $1.8 billion in Q3 2013. Orbimed Advisors, LLC and Polaris Venture Partners topped the list of venture financing firms by participating in 16 transactions each worth $414.8m and $392.9m, respectively, in the last five quarters (Q4 2012 – Q4 2013).

Deals in start-up stage constituted 54% of the total deals in Q4 2013. In second place, growth/expansion stage financing recorded 80 deals, accounting for 34% of the total deals.

North America Reported An Increase In Values In Q4 2013 :

North America recorded a decrease in the number of deals and an increase in deal values in Q4 2013. The region registered 844 deals worth $67.3 billion in Q4 2013, compared to 948 deals worth $58.1 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared to 912 deals worth $65 billion in Q3 2013.

Europe recorded a decrease in the number of deals and an increase in deal values in Q4 2013 with 306 deals worth $25.7 billion, as compared to 396 deals worth $20 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared to 345 deals worth $18.5 billion in Q3 2013.

Asia Pacific recorded a decrease in the number of deals and deal values in Q4 2013. The region reported 247 deals worth $11.2 billion in Q4 2013, as compared to 311 deals worth $17.1 billion in Q4 2012. On a quarter-on-quarter basis, the number of deals decreased and deal values increased in Q4 2013, when compared to 351 deals worth $9.8 billion in Q3 2013.

This information is based on our current report: Partnerships, Licensing, Investments and M&A Deals and Trends in Pharmaceuticals - Q4 2013