Successful M&A deals in the field of medical research are concluded by companies with a combination of several factors:
- Promising developments.
- An opportunity to strengthen the position in the market after the takeover.
- Productivity and sales growth.
- Adequate conditions for concluding transactions (requirements, tax fees).
Large M&A deals in the field of medical research allow us to quickly promote innovative safe medicines and research methods. This makes it possible to develop the quality of medical care and the economy. At the same time, governments make sure that no monopoly is achieved and, as a consequence, unjustified price increases.
In Russia in 2021, the president proposed to reduce the control of antimonopoly services and to make M&A transactions in the field of medical research to 800 million rubles for simpler requirements. As a result, this allowed us to accelerate the development of healthcare and improve the quality of treatment. The volume of transactions in 2021 in Russia was the peak for the last 7 years.
In Western countries, the examination of M&A transactions in the field of medical research is tightening every year. This leads to a decrease in the volume of transactions. The merger, as practice shows, increases the competitiveness of the company up to a monopoly in the market. This leads to higher prices for medicines and treatment. An unjustified jump in the cost of treatment is critically unacceptable for patients, which is why the Federal Trade Commission in the United States annually improves antitrust laws.
Medical Research M&A Deals — TOP 10 Major Mergers and Acquisitions
The peak of acquisitions and mergers in the medical sector occurred in the world in 2019. The volume of the 10 largest amounted to $ 200 billion. Gradually, the momentum subsided. In 2020, the amount was already $97 billion. In 2021 ‒ 53 billion dollars. A slight increase was noted in 2022 to $ 65 billion.
M&A Amgen and Horizon Therapeutics deal worth $27.8 billion
The deal was concluded on December 12, 2022. The deviation from the stated purchase price was 48% higher than the price before the potential transaction was reported, and 20% higher than the price before the official announcement. Among the promising developments with high growth potential that Amgen received through the purchase of Horizon, it is advisable to pay attention to the following:
- A medicine for the treatment of thyroid diseases Tepezza. Sales growth in November 2022 exceeded $4 billion.
- Therapy of gout Krystexxa. Sales of the drug exceeded previous figures by $ 1.5 billion.
- Uplizna, a drug for the treatment of the visual tract in neuromyelitis, myasthenia gravis. Approved by the FDA and undergoing clinical trials. Horizon bought it in 2021 for $3 billion.
The purchase of the growing company helped strengthen Amgen’s position in the pharmaceutical market. The investor was attracted by the net profit growth indicators. Horizon’s total sales increased by 21% compared to 2021.
The merger was the largest in the biopharmaceutical market in California. Thanks to this purchase, the trend of M&A transactions in the field of medical research in the world has recovered towards growth from $ 53 billion in 2021 to $ 65 billion in 2022.
Purchase of the CGRP franchise of Pfizer and Biohaven for $ 11.6 billion
The transaction took place on May 10, 2022. The company raised $11.6 billion to buy the biohaven franchise with a promising migraine drug approved by ODT.
Nurtec has high competitive advantages in the market, is the only oral drug for the prevention and treatment of migraine attacks.
Pfizer was at the forefront in the fight against covid. Thanks to the timely franchise created, sales of the COVID-19 Comirnaty vaccine and the Paxlovid antiviral drug, Pfizer experienced high growth.
Thanks to its extensive capabilities, the pharmaceutical giant plans to increase sales of Nurtec.
Prior to the conclusion of the M&A deal in the field of medical research, Pfizer bought $ 350 million worth of Biohaven shares and, as part of the partnership, offered marketing services to promote therapy worldwide.
Pfizer has acquired a nasal spray for migraine, at the stage of clinical trials called zavegepant and a portfolio of drugs under preclinical development. Part of the Biohaven company, under the leadership of Vlad Chorich, MD, remained independent.
Medical Research M&A deals: Pfizer and Global Blood Therapeutics for $5.4 billion
Large M&A deals in medical research are often the result of bidding wars. On August 8, Pfizer acquired Global Blood Therapeutics. The big giants J& J, Pfizer and Big Pharma fought for GBT shares.
The company attracted large investors thanks to its sickle cell anemia portfolio. The tender battle took place in several stages and began with a price of $ 55 per 1 share.
Before the deal was concluded, the last offer was put forward to all participants on the appointment of a “best price”, and Pfizer beat the competition by setting a maximum price of $ 68.50 per share. This value was 7.3% higher than the GBT share price on the last trading day before the transaction.
Pfizer has acquired a promising drug Oxbryta and developments for the treatment of late-stage sickle cell anemia G BT 601 and inclacumab. The profit amounted to more than $ 3 billion after the approval of the drugs by the FDA.
Bristol Myers Squibb and Turning Point Therapeutics deal for $4.1 billion
The transaction was made on June 3, 2022. The price of Turning Point shares ranged from $19 at the initial offering, to peak values of $ 133 in 2021. Bristol Myers Squibb paid 122% to the closing value of $34.16 ‒ $76 per share.
The company has become attractive for a merger thanks to the drug repotrektinib. The drug is already actively used and has 3 approvals in the treatment of cancer. By the end of 2023, the drug may receive FDA approval as a first-line treatment for lung cancer.
Profit potential of repotrectinib:
- In the amount of 1.14 billion US dollars in the use of the first line.
- 455 million US dollars in the use of a second line for lung cancer.
An important point. Repotrectinib is being tested on various types of cancer. In case of successful trials, the drug will be used in the treatment of a wide range of oncological diseases, which will significantly increase the profit potential of developers.
As a result of a successful M&A deal in the field of medical research, BMS will help accelerate the delivery of the drug to patients and expand production, as well as bring 4 experimental drugs for the treatment of cancer to the market. The merger enables BMS to become the world’s first oncology franchise. Previous deals have already brought the company high profit figures.
Acquisitions by BMS in 2021 brought more than 55% of revenue. This became possible through the checkpoint inhibitors BMS Opdivo ($7.5 billion), Yervoy ($2 billion), Revlimid ($12.8 billion) and Pomalyst ($3.3 billion). The successful purchase of MyoKardia and its cardiovascular drug mavakamten, which was approved in April 2022. Now the peak estimate of sales of this drug is about 4 billion US dollars.
Medical Research M&A deals: Amgen and ChemoCentryx for $3.7 billion
On the fourth of August, the long-term disputes between the two companies ended, and the purchase of ChemoCentryx by Amgen for $ 3.7 billion took place.
The company’s negotiating agent has been making offers to 13 firms since 2020. But because of the volatility of the shares, only partnership was offered. The main product of the company was at the testing stage. Tavneos from ChemoCentryx received FDA approval in October 2021.
After 2 months, the first offers of an M&A deal in the field of medical research began to arrive. Amgen offered its price of $42.50 per share in March. Negotiations were underway and the company did not agree on an amount of less than $ 50.
Amgen offered a final price of 52 USD. The CEO’s attempt to increase it to $54.50 did not bring results. This was the only offer above $50 and the deal took place.
The prospect of a deal is based on working in one direction. Both companies are developing inhibitors for the treatment of autoimmune diseases. The purchase is justified by Amgen’s desire to replace all old developments with new generation drugs.
Tavenos drug is approved for the rare autoimmune disease antineutrophil cytoplasmic antibody-associated vasculitis. It has shown effectiveness in damaging small blood vessels, which can cause organ failure, especially in the kidneys. It is being tested for the treatment of lupus nephritis and purulent hydradenitis. Sales of Tavenos in the first quarter of 2022 amounted to $5.4 million and showed positive dynamics for multiple growth in the future.
The drug belongs to the selective complementary components of the 5a receptor inhibitor. It is administered orally. Amgen is in the late stages of developing a C5 inhibitor, a biosimilar referring to AstraZeneca’s Soliris.
In addition to the treatment of autoimmune diseases, the purchase of ChemoCentryx brought three early-stage developments that are aimed at the treatment of ulcerative colitis, skin diseases and cancer.
Amgen’s portfolio already has top-selling drugs in its segment:
- From psoriasis Otezla, which he acquired from Celgene back in 2019.
- TNF Enbrel blocker.
For Amgen, the deal made it possible to update the line of new-generation drugs and extend patent terms. This increases the competitiveness and attractiveness of the franchise. The development of partnerships will increase drug sales and allow for faster introduction of developments to the market.
Разрабатываем Стратегии для собственников бизнеса в целях оптимизации группы компаний, решения нестандартных задач и продажи активов. Оказываем услуги по сопровождению сделок M&A, управлению непрофильными активами и проектами в целом.
