Up-Front Deal Value Doesn't Reflect Peak Commercial Potential
There's no correlation between the up-front payment made in the deal and the peak sales for the drug that was the product of the deal. Second in a series of follow-ups to IN VIVO’s 2014 study comparing/contrasting likelihood of approval and up-front payments on alliances, and the outcomes of relevant deals.
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In earlier development phases, most of the therapeutic classes with higher approval rates tend on average to have the larger up-front alliance payments. But in Phase III, licensees are paying top dollar for candidates in areas with the lowest likelihoods of approval.
Sangamo licensed Biogen zinc finger protein transcription factor candidates in an alliance worth over $2bn. Exercising an option it gained in 2017, Takeda bought celiac disease-focused PvP Biologics for up to $330m in earn-outs. A strong showing of IPOs prompted biopharma financing to increase from last month.
Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, and Pharmaceuticals – and then categorized by type – Acquisition, Alliance, or Financing. This month’s column covers deals announced February 2020.