Pharmaceutical/Biotechnology Deal Statistics Quarterly, Q4 2009
Highlights from the Q4 2009 review of pharmaceutical and biotechnology dealmaking: Financing dollar volume was high with 108 financing deals bringing in close to $5 billion, with a big increase in public financings: IPOS and FOPOs together made up over half of the quarter's total dollar volume. Conversely VC rounds were down--accounting for only 18% of the Q4 aggregate. M&A was strong in Q4 with 27 transactions bringing in close to $8 billion-almost half of these were acquisitions of private biotechs. Deals with big earn-outs were also predominantly featured this quarter (and throughout the year). Alliances in Q4 reached an aggregate potential deal value (pre-commercialization monies) of $5.9 billion, a 46% increase over the previous quarter. Several Big Pharmas did multiple transactions, most notably GlaxoSmithKline PLC, which penned nine of its 20 in-licensing deals in the fourth quarter alone. Q4 also boasted 16 deals with up-front payments exceeding $50 million.
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A flurry of dealmaking in December, especially by big pharmacos, helped to bring 2009 to a strong close in terms of alliances. But the year will probably most be remembered for the Big Pharma mega mergers that combined four major companies and topped the acquisitions list by their dollar values. We focus here on the dealmakers, showing which companies dominated the dealmaking landscape in terms of deal volume and value, as well as therapeutic categories that grabbed the most attention.
Biopharmaceutical trends in 2008 were fundamentally altered by the global financial crisis. And 2009's events were similarly impacted by the ongoing recovery. VCs hunkered down as capital and exits remained scarce, and pharmaceutical acquirers remained cautious.Those deals that did get done were typically structured affairs or options-to-deal. In addition, health care reform added to the ongoing drama and uncertainty
It looks like the biggest strategic gulf in the industry: focus or diversify? If the CEO thinks he can't rely on R&D to grow his way out of the industry's revenue hole, get ready to live alongside generics and OTC businesses--though he'll downplay to investors the risks of managing different businesses by stressing the commonalities with the core branded efforts and probably won't move into wholly non-pharma businesses. If he's still committed to R&D--get ready for diversification of other sorts, and some pretty clever financial tactics.