Deal Statistics Quarterly, Q1 2003
In Vivo presents another installment of our quarterly reivew of dealmaking--in this case January-March 2003. Our data come from Windhover's Strategic Transactions Database. We include medical device financings by deal type; diagnostic financings by industry segment; pharma and biotech alliances by therapeutic category and industry segment; pharma and biotech financings by market segment, and pharma and biotech M&A.
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While the investment banking world does its best to sing the virtues and likelihood of biotech consolidation, the industry isn't paying attention. Indeed, perhaps the most interesting aspect of J&J's acquisition of Scios isn't the fact that J&J outbid the competition, but just how little competition it had to outbid for one of the very few clearly successful product-oriented biotechs.
Roche Diagnostics and Epigenomics AG, a start-up diagnostics company, have signed a three-year collaboration to find new cancer diagnostic markers, a deal that could bring Epigenomics as much as $100 million--if all of the markers covered get to market. Epigenomics is working on DNA methylation based biomarkers for cancer and will identify the markers; Roche will develop them into tests and market them worldwide.
The financial markets are having a tough time understanding the combination of biotech companies Enzon and NPS Pharmaceuticals, perhaps because it doesn't follow the typical rationale for intra-biotech mergers. That is, it doesn't join competitors working with similar technologies or disease states. Rather, the companies have little overlap, an attraction they argue will result in a balanced, somewhat synergistic product portfolio. Still, they face the challenge of convincing divergent investor groups--earnings-oriented shareholders of Enzon and growth-chasing investors in NPS--that the resulting new company wo'n't be a hodge-podge of diverse technologies.