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  • Conversation: Pharmaceutical M&A deals in 2017

    • January 4, 2018 12:59 PM GMT
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      Pharmaceutical M&A deals in 2017

      In 2017, deal volume in the healthcare sector overall was very active as far as mergers and acquisitions (M&A) were concerned. However, in the biotech and pharma space it was at the lowest levels in many years and a fraction of that of the boom years of 2014 and 2015.
      The actual number of pharma/biotech M&A transaction announcement tracked by The Pharma Letter for full-year 2017 was just 101, compared with 130 in 2016 and 166 in 2015, which was a record year.
      Moreover, in value terms, nothing has ever come close to the 1999 acquisition of Warner Lambert by Pfizer (NYSE: PFE), worth a massive $111.8 billion, but which, adjusted for inflation, would have been a staggering $160 billion.
      Of the total deals tracked in 2017, just 15 had a potential value of over $1 billion to the sellers, compared with 23 in 2016 and 30 in 2015. The combined value of these 15 deals was $149.51 billion.
      The $69 billion merger of CVS Health and Aetna was by far the biggest healthcare M&A deal announced in 2017, but given it is the combination of a US drugstore chain and a healthcare insurer, it was not strictly speaking a “pharmaceutical” deal as covered in The Pharma Letter’s annual review of activity in this sector.
      At $30 billion, the Johnson & Johnson (NYSE: JNJ) acquisition of Swiss biotech Actelion, which was first mooted in 2016 but only formerly pursued in 2017, was by far the biggest pure biotech/pharma transaction of the year.
      Besides Gilead Sciences’ (Nasdaq: GILD) $11.9 billion purchase of Kite Pharma, and Thermo Fischer’s $7.2 billion takeover of Dutch group Patheon, 2017 was a rather quiet one on the M&A front in the pharmaceutical sector.
      As well at the Kite deal, which took anti-virals biotech giant Gilead into the field of cell therapy, the company made a smaller acquisition, that of USA-based Cell Design Labs for $175 million upfront plus $322 million contingent, thus gaining new technology platforms that it hopes will further enhance its research and development efforts in cellular therapy.
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