Biopharma M&A Trends Held Steady in 2011
Given the narrow initial public offering window, declining venture investments and tough capital markets, mergers and acquisitions (M&A) have become the exit of choice for many biopharmaceutical companies. In 2011, there were more M&As than in 2010, deal value was higher, but it still wasn't the flood of deals many industry observers had expected, according to BioWorld.
Another not-so-positive trend for biotech in 2011 was the continued decline in the number of collaborations. A total of 465 licensing or partnership transactions closed last year, compared to 592 in 2010. In 2009, a total of 650 deals got done, as reported in the just-published BioWorld Biotechnology State of the Industry Report 2012.
In the wake of the 2008 recession, many biotech players were left with insufficient cash and depressed values, while cash-rich pharmas have been facing the dreaded patent cliff, creating an environment that appeared ripe for a massive wave of consolidation. Analysts predicted a frenzy of M&As, but BioWorld reports that those predictions have not been borne out.
"The big pharma mega mergers of 2009 tamped down biotech acquisitions that year, and the 'digestion' of those mergers was attributed to the slower-than-expected M&A trends in 2010," said Jennifer Boggs, BioWorld's managing editor. "Hopes were high going into 2011, but the once-again anticipated rush of M&A activity still did not emerge. Acquisition trends in the life sciences space held steady at best."
"2012 may be a different story," said Lynn Yoffee, BioWorld's executive editor. "With four biopharma billion-dollar-plus M&A deals already, the average deal size will undoubtedly increase."
M&A and deals activity are just one section of BioWorld's annual report.
"The BioWorld news team also analyzed financing, scientific and regulatory trends for 2011, putting the information and data in context with what's happening now and going forward in 2012," Yoffee said. "It's a vital resource on key trends designed to guide executives' decision-making as they prep for the next big deal or when strategizing about fundraising. Near-term biopharma sector history is the best guide for smart planning."