Beyond Borders: Global biotechnology report 2010

Without Roche-Genentech, the value of
M&A transactions involving US-based
biotech companies decreased by half in
2009 to a total of US$14.1 billion. Only
US M&As, 1999–2009
Value (US$b)
Pharma-biotech megadeals
35
30
25
20
15
10
5
Pharma-biotech
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Ernst & Young, Windhover Information, MedTRACK, BioWorld and company news via NewsAnalyzer
Chart excludes Roche’s acquisition of Genentech.
US strategic alliances remain strong
Potential value (US$b)
Pharma-biotech
35
30
25
20
15
10
5
0
Biotech-biotech
three transactions had a value in excess
of US$1 billion. Dainippon Sumitomo
Pharmaceuticals of Japan acquired
Sepracor for US$2.6 billion, extending
Biotech-biotech
Biotech-biotech megadeals
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Ernst & Young, Windhover Information, MedTRACK, BioWorld and company news via News Analyzer
Chart shows potential value, including up-front and milestone payments, for alliances where deal terms are publicly disclosed.
82 Beyond borders Global biotechnology report 2010
the trend of Japanese companies growing
their operating footprint in the US through
acquisition (see Eisai’s acquisition of MGI
Pharma in 2007 and Takeda’s acquisition
of Millennium Pharmaceuticals in 2008).
Bristol-Myers Squibb deepened its
biotechnology capabilities through the
acquisition Mederex for US$2.4 billion.
Meanwhile, Gilead Sciences played white
knight to CV Therapeutics after Astellas
Pharmaceuticals’ hostile bid, paying US$1.4
billion to win over shareholders. Astellas
is clearly interested in expanding its US
presence and in early 2010 returned with
another hostile bid — its US$3.5 billion offer
for OSI Pharmaceuticals. The next largest
acquisition in the US was the US$970
million that Johnson & Johnson paid for
Cougar Biotechnology which was developing
several oncology drugs, including one in
Phase III.
Together, these four transactions comprised
54% of total M&A deal values, including the
value of CVRs. In total, there were only 17
acquisitions of US companies in which the
value changing hands at closing, exclusive
of CVRs, exceeded US$100 million, down
from 23 in 2008. These transactions had an
aggregate value of US$11 billion, well below
2008’s US$29.6 billion.
Alliances
In 2009, US-based biotech companies
entered 132 alliances where financial
terms were disclosed (up slightly from 115
deals in 2008). These transactions had
an aggregate potential value of US$27.3
billion (similar to the prior year’s US$29.6
billion). Of these deals, 97 disclosed upfront
payments, comprised of license fees,
technology access fees and sales of equity,
with a combined value of approximately
US$3 billion — essentially unchanged since
2008. The average up-front in 2009 was