In Vivo is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Pharmaceutical/Biotechnology Deal Statistics Quarterly, Q1 2009

Executive Summary

Highlights from the Q1 2009 review of pharmaceutical and biotechnology dealmaking: With 57 transactions raising $1.09 billion, financing activity for Q1 2009 showed a 137% increase over Q4 2008's total. The largest deal was an initial public offering--Bristol-Myers Squibb Co. sold off 15% of Mead Johnson Nutrition Co. for $684 million-the first since Bioheart Inc.'s February 2008 IPO. In M&A, Big Pharma mega-mergers was the big story as two major players--Wyeth and Schering-Plough--were scooped up by Pfizer Inc. and Merck & Co. Inc., respectively, in deals together valued at $109 billion, making up 96% of the Q1 M&A dollar volume. Biopharma alliances-with a 25% decrease in number of deals--only reached about half the dollar volume of Q4 2008, but Bristol-Myers Squibb continued its strong performance along with several other Big Pharma players that joined the playing field; GlaxoSmithKline PLC and Novartis AG, each with five alliances, tied as the quarter's most active deal makers. Much of the fourth quarter's alliance activity followed an option-based deal structure with the biotech handling R&D through pre-proof-of-concept after which the Big Pharma partner then takes over later-stage development and commercialization.

You may also be interested in...



Call the Plumber: PIPE Logic is Leaky

Extraordinary times for capital markets have made cheap public biotechs attractive to venture investors. These private investments in public equity (PIPEs) are seen by some as a lifeline to a troubled and undervalued sector, and many VCs are considering significant public investments. But few deals are likely to get done as venture funds set a high bar for investment, regardless of fire-sale prices. Recipients of large PIPE deals may indeed provide venture-like returns for private investors, but an analysis of these financings shows why they are the exceptions that prove the rule.

Pfizer's Ambitions in the Off-Patent World

The pending purchase of Wyeth will accelerate Pfizer's transformation from a mass marketer of superstar drugs into a diversified supplier of targeted therapies, consumer health, and other health care products. It is a major but incomplete step in the search for new growth drivers as Pfizer's cholesterol drug Lipitor--worth a quarter of the Big Pharma's 2008 revenues--loses exclusivity. The company has also restructured existing operations into six business units, the most intriguing of which is the Established Products Business Unit. That division has pulled together Pfizer's off-patent and branded older products into a $10 billion business, albeit one with declining sales. Its leader, David Simmons has the job of reversing the decline and creating a growth story.

Pfizer/Wyeth: Industrializing Pharma?

If Pfizer's acquisition of Wyeth is more than a merely stop-gap attempt to bridge the genericization of Lipitor -- and plenty of observers believe it is -- then it is in addition a tacit admission that its future will be patterned more on the value-based strategies of McDonalds and GE than the research-based Big Pharma model. The deal is the first step in creating a commercial organization which can cheaply add and sell a wide range of new products, with a range of margins. The moderate revenue growth provided by new products and new markets, thanks to dramatically slower growth in operating costs, will deliver what could be double-digit bottom line growth -- and do so with the kind of predictability of a large industrial business. Critical to the strategy: bolt-on acquisitions and licensing deals, allowing Pfizer to layer new products into existing infrastructure, keeping the growth of cost-of-goods and SG&A expenses as flat as possible. Gone will be the big growth spikes from major new products. But absent too will be the sharp drops that follow patent expirations. Pfizer, in short, is readying itself for industrial health care.

Related Content

Topics

Related Companies

Related Deals

UsernamePublicRestriction

Register

IV003308

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel