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Contents
Mergers and acquisitions (M&A)
Volumes
Valuations
Hostile attempts
Friendly options
Contact information
5
500
450
468
400
350
300
250
200
150
100
50
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
NOTE: $$ throughout presentation are USD. All dollars are nominal values (not adjusted for inflation).
2% each
3%
Cancer
3%
Infectious Disease
Neurology
Endocrine/Metabolic
Autoimmune/Inflammatory
Cardiovascular
Dermatologic
Ophthalmology
Genitourinary/Sexual Function
Hematologic
Gastrointestinal
Pulmonary/Respiratory
1% each
3%
3%
AI/Inflam
6%
Diversified
38%
Endo/Met
7%
Neuro
7%
Infect
9%
Cancer
15%
Other/Miscellaneous
NOTE: Excludes deals for non-therapeutic assets, and
therapeutic asset deals for unknown therapeutic arenas.
2015
Dermatology
Cardiovascular
2014
Hematologic
Genitourinary
Pulmonary/Respiratory
Gastrointestinal
Other
0
5
10
15
Number of announced M&A events for companies with therapeutic assets
20
9
Disc/Preclinical
n = 20
Phase II
n = 18
2014
2014
(n=71)
(n = 71)
Disc/Preclinical
n = 16
Phase II
n = 16
5 year
5 yearaverage
average
9%
2009
-13
2009-13 Disc/PC
(n(n=425)
= 425)
0%
10%
Approved
n = 28
Approved
n = 21
54%
Approved
23%
Phase II
20%
Early Stage
30%
40%
50%
60%
Phase I
Phase II
80%
90%
100%
Discovery / Preclinical
70%
Phase III
Registratoin
Approved
NOTE: Stage of deal is the most advanced development stage entered by the lead asset on
the sellside of the transaction. For example, a deal for a company whose lead compound has
completed Phase I but not yet begun Phase II is classified as a Phase I event.
10
$600
$500
$515
$400
$300
$200
$100
$0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
NOTE: All dollars are USD and are nominal values (i.e. are not adjusted for inflation).
11
$550
$515
$500
$450
> $100B
$400
$10-$100B
$350
$5-10B
$1-5B
$300
$250
$200
$150
$288
< $1B
$175
$135
$166
$114
$140
$105
$100
$113
$71
$50
$0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
NOTE: All dollars are USD and are nominal values (i.e. are not adjusted for inflation).
12
$70.0
PFE/Wyeth
$60.0
Actavis/Allergan
$50.0
Roche/Genentech
$40.0
Merck/S Plough
Teva/Allergan generics
Novartis/Alcon
$30.0
Shire/Baxalta
$20.0
Actavis/Forest
Bayer/Schering AG
Sanofi/Genzyme
J&J/PFE consumer
$10.0
J&J/Synthes
MerMedImmuneerono
Takeda/Nycomed
S Plough/Organon
Gilead/Pharmasset
AZ/MedImmune
$0.0
20062006
2007
2007
20082008
20092009
2010
2010
2011
2011
2012
2012
Abbvie/Pharmacyclics
PFE/Hospira
Novartis/GSK Onc
Merck KGaA/S Aldrich
Bayer/Merck
Valeant/Salix
2013
2013
2014
2014
2015
2015
20
Year
13
14
Pfizer
WarnerLambert
2000 ($90B)
Pharmacia
2002 ($60B)
Esperion
2003 ($1.3B)
Vicuron
2005 ($1.9B)
Wyeth
2009 ($68B)
King
2010 ($3.6B)
Merger
1950s
Kabi merger
early 90s
AH Robins
1989 ($3.2B)
Jones Phar
2000 ($2.4B)
Parke-Davis
1970s
Procardia
1990 ($2.4B)
American
Cyanamid
1994 ($9.6B)
Alpharma
2008 ($1.6B)
AHP merger
1999
Upjohn
1995 ($7B)
Genetics Institute
1996 ($1.3B)
Agouron
Monsanto/
Searle, 1999
($27.3B)
1999 ($2.1B)
Hospira
2015 ($17B)
15
Accumulated
total spent on
acquisitions*
($B)
$300
$250
$200
Market
capitalization
at year end
($B)
$150
$100
$50
Est.
Annual net
sales ($B)
$0
NOTES:
All dollars are nominal values (i.e. are not adjusted for inflation)
*Acquisition totals exclude milestone payments and stock-for-stock mergers
**2015 data exclude pending acquisition of Allergan
16
$160,000
$10B and up
Anthem/CIGNA
$40,500
Aetna/Humana
$37,000
Shire/Baxalta
Health benefits
AbbVie/Pharmacyclics
$21,000
Pfizer/Hospira
$17,000
Valeant/Salix
Alexion/Synageva
Endo/Par
$5 to $10B
Health benefits
$54,000
Teva/Allergan generics
Celgene/Receptos
AstraZeneca/Acerta
Centene/HealthNet
Shire/Dyax
Shire/NPS
BI/Merial
$5,168 Swap of Sanofis animal health biz Merial for BIs consumer health biz + $5.2B cash
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
NOTE:
Gray denotes pending transactions.
...... Orange deals have closed.
17
M&A 2015:
Not all deals are friendly and successful ...
18
M&A 2015:
Unsolicited bids and alternative outcomes
Instead ...
Bidder
Target
Date
Bid ($B)
Horizon
Depomed
July 2015
$3.0
Teva
Mylan
April 2015
$40.1
Mylan
Perrigo
April 2015
$28.9
Endo
Salix
March 2015
$11.2
AbbVie
Shire
June 2014
$46.0
Valeant
Allergan
April 2014
$45.5
Pfizer
AstraZeneca
May 2014
$119.0
Quanticel
Annovation
Shire
(post-ViroPharma acquisition)
Celgene
3 yrs 3 mo
3 yrs 5 mo
2 yrs 5 mo
$7.5M
Medicines Co participated in
$8.75M Series A with Atlas
Technology:
Next-generation anesthetic,
from Mass Gen
Stage when
optioned:
Phase II
Discovery
Preclinical
Acquisition
trigger:
Acquisition
upfront:
$70M
$100M
$28.4M
Acquisition
contingencies:
$175M
$385M
$26.3M milestones +
low single digit royalties
Acquired by:
Time from option
to exercise:
Option
upfront:
Option term
collaboration:
20
2014
17
2
2013
15
2012
2011
2010
2009
2008
2007
2006
1
0
Terminated
Acquired
Open
10
12
14
16
18
20
23
2012
2013
90%
$3.0
2015
2014
80.0%
$2.5
$2.5
20
$2.0
$2.0
$2.0
$1.8
$1.5
15
28
$1.4
$1.3
$1.1$1.1
10
$1.0 21
15 14 $0.7
5
21
$1.0
$0.8
15
14
12
$0.6
10
4
$0.3 2 2
6
$0.2
$0.2
$0.1
4
60%
57.4%
56.7%
50%
43%
40%
30%
26%
$0.5
20%
10
73.7%
70%
Insider Participation
25
77%
Total Amount Raised (USD B)
80%
26%
23%
19%
$0.0
10%
12%
7%
0%
2012
Volume
NOTE: $2B of the $2.5B funding in Q1 2013 was from one IPO Zoetis
2013
2014
2015
Median
% of IPO's w/ 25% or more Insider Participation
24
100%
50%
0%
(50%)
(100%)
Dec 2014
Feb 2015
Apr 2015
May 2015
Jul 2015
Sep 2015
Oct 2015
Dec 2015
BUTDespite the
downturn in the markets
in mid-September, 12
Biotech IPOs still got out
with favorable valuations
and more than half have
performed very well,
including Aclaris
Therapeutics which
finished the year up 134%
Date of IPO
25
2014
2015
274
250
$24.4
246
217
200
198
150
137
159
181
128
100
151
$12.9 $13.1
$8.2
$11.0
$4.7
$3.8
$3.2
$10
$8.0
$6.4
$5.2
$20
$15
$14.8
170
$10.7
$6.2
$5.7
171
119
$8.1
218
$25
207
191
182
50
$30
$5
2012
300
$0
0
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015
# Licenses/JVs
NOTES: This analysis includes all announced licenses and JVs for products or technologies.
Licenses for intellectual property and/or data only are excluded. All dollars are USD.
26
Licensee
Licensor
Total Size
(US $ M)
Upfront
(US $M)
Sanofi
Hanmi
$4,266
$445
AstraZeneca
Ionis
(fka Isis)
$4,090
$65
Discovery
Diversified
Vertex
CRISPR
$2,625
$75
Discovery
Diversified
Gilead
Galapagos
$2,075
$300
Phase II
AI/Inflam
Pfizer
Heptares
$1,890
undisclosed
Discovery
Diversified
BMS
Five Prime
$1,740
$350
Phase I
Diversified
Sanofi
Lexicon
$1,730
$300
Phase III
Endo/Meta
Amgen
Xencor
$1,702
$45
Preclinical
Diversified
Sanofi
Regeneron
$1,665
$640
Phase I
Cancer
10
Ultragenyx
Arcturus
$1,570
$10
Discovery
Diversified
Subject
Stage*
*Stage: Recap classifies clinical development program deals by the highest stage entered by the lead asset at the time of
deal signature. E.g., an asset that has completed Phase II but not yet begun Phase III is classified as a Phase II transaction.
27
Licensor
Upfront
($M)
Sanofi
Regeneron
Celgene
Equity
($M)
Stage
Rx Area
$640
Phase I
Cancer
MedImmune / AZ
$450
Phase III
Cancer
Sanofi
Hanmi
$445
Reformulation
Endo/Meta
Bristol-Myers Squibb
Five Prime
$350
Phase I
Diversified
Astellas
Immunomic
$300
Discovery
AI/Inflam
Gilead
Galapagos
$300
Phase II
AI/Inflam
Sanofi
Lexicon
$300
Phase III
Endo/Meta
MedImmune / AZ
Innate
$250
Phase II
Cancer
Allergan
Merck
$250
Phase II
Neurology
Novartis
Aduro
$200
$25
Preclinical
Cancer
Celgene
Juno
$150
$850
Phase II
Diversified
Celgene
Nurix
$150
Discovery
Diversified
Merck KGaA
Intrexon
$115
Discovery
Cancer
Celgene
Lycera
$105
Phase I
Cancer
Janssen
Hanmi
$105
Phase I
Endo/Meta
Bayer
$100
Phase II
Cardiovascular
DiaVax
City of Hope
$100
Phase I
Viral Infect
Bayer
$100
Phase II
Hematologic
Merck
NGM
$94
Preclinical
Endo/Meta
Vertex
Parion
$80
Phase II
Pulm/Resp
$425
$106
28
$60
$50
Upfront payment ($M)
$20
$10
$0
508
Average upfront
$33 M
Median upfront
$10 M
2010
2011
2012
2013
2014
2015
(n(n== 106)
83) (n(n == 121)
121) (n=131)
106) (n
(n== 104)
104) (n
(n== 94)
94) (n
(n =
= 83)
(n=136)
Year license announced
NOTE: Analysis includes upfront cash payments only. Equity
investments and near-term milestones are excluded.
29
Phase II
n = 134
Phase I
Disc/Preclin
n = 63
2010
2011
2012
2013
2014
2015
2010
2011
2012
2013
2014
2015
n = 242
2010
2011
2012
2013
2014
2015
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
2010
2011
2012
2013
2014
2015
Average and median announced upfront payments by year and stage of lead asset, 2010-2015
Year
Average reported upfront ($M)
Diversified
Other
16%
CV/Hema
3%
AI/Inflam
7%
Endo/Meta
8%
Cancer
Cancer
35%
2015
n = 777
Diversified
Neurology
10%
11%
Infection
10%
NOTES: Charts includes licenses and JVs for which a therapeutic area is applicable
and disclosed. Other includes dermatology, chromosomal abnormalities,
gastrointestinal disease, genitourinary/sexual function, pulmonary/respiratory,
ophthalmic, nutritional supplements, cosmetics, animal health.
Endo/Meta
91%
AI/Inflam
63%
393%
78 in 2010 vs. 273 in 2015
Infection
Neurology
CV/Hema
0%
100%
200%
300%
400%
500%
Baseline: 2010
Comparator: 2015
31
30
Number of in-licenses announced in 2015
26
26
25
Approved
20
15
Clinical
16
14
Discovery/Lead/Preclinical
13
11
10
10
10
8
6
5
0
748 companies
announced inlicenses/JVs in 2015
52 companies
announced
3 or more
32
150%
Drivers of Success
100%
Founded on
astounding science
Spark
Therapeutics
Leveraging strong
capital markets
50%
Leveraging sellers
market
0%
(50%)
Validation from
strategic partners
(100%)
Post-IPO
performance
fantastic
Dec 2014
Feb 2015
Apr 2015
May 2015
Jul 2015
Sep 2015
Oct 2015
Dec 2015
Date of IPO
34
Contact Information
Laura J. Vitez
Principal Business Analyst
Thomson Reuters Recap
laura.vitez@thomsonreuters.com
Vinay Singh
Senior Deals Analyst
Thomson Reuters Recap
vinay.singh01@thomsonreuters.com
www.thomsonreuters.com
37
37