Despite active M&A activity by conventional standards, 2016 was a fairly quiet year compared to 2015. The U.S. government cracked down on inversion-based deal making that drove so much of the mega M&A activity in 2015. For instance, Pfizer expected to save about $123 million in taxes after merging with Ireland-based Allergan. It would have been the largest merger in pharmaceutical industry history.
When the law changed, the Pfizer and Allergan deal immediately fell apart as did other inversion-based deals. Instead, 2016 M&A activity focused on strategically managing product portfolios and leading companies buying the innovation needed for growth.
What will 2017 hold? With the incoming Trump administration it is hard to tell. Cash repatriation policies mentioned during the campaign might bring a great deal of off-shore money back to the U.S. and spark another round of M&A mania.
The following is some of the most notable activity from 2016. Happy 2017!
|Allergan plc, Ireland||Anterios, Topokine Therapeutics, RetroSense Therapeutics, Vitae Pharmaceuticals, Akarna Therapeutics, Tobira Therapeutics, Chase Pharmaceuticals||After the Pfizer merger deal fell apart in April 2016, Allergan made eight acquisitions and divested its generic drug business unit. These moves were designed to support their stated strategy of growing their branded drug strength. The deals totaled approximately $2.8B.|
|Shire plc, Ireland||Baxalta, Inc., United States||Shire completed its $32 billion merger with Baxalta with the goal of becoming the global market leader in rare diseases and other specialized disorders. Shire projected that the combined company would generate approximately 65% of its total annual revenues from rare disease products.|
|ViiV Healthcare, United Kingdom||Bristol-Myers - HIV R&D portfolio, United States||GSK’s global HIV business ViiV Healthcare acquired Bristol-Myers Squibb’s R&D HIV assets. The deal totaled $350M and reinforces GSK’s leadership in the HIV treatment arena.|
|Abbvie, United States||Stemcentrx, Inc., United States||Abbvie’s acquisition of Stemcentrx included Rova-T, a late-stage oncology drug. Rova-T is a novel biomarker-specific therapy that is derived from cancer stem cells and targets delta-like protein 3 (DLL3) that is expressed in more than 80 percent of SCLC patient tumors and is not present in healthy tissue. Rova-T has been submitted to the U.S. Food and Drug Administration for Breakthrough Therapy designation as it is under investigation as a third-line treatment in SCLC, where there is no currently approved therapy. This acquisition furthers Abbvie’s positon within the innovative oncology and specialty drug arenas. Stemcentrx was Abbvie’s one acquisition in 2016. The deal totaled $5.8B.|
|Gilead Sciences, Inc., United States||Nimbus Apollo, Inc., United States||Gilead Sciences acquired Nimbus Therapeutics’ Acetyl-CoA Carboxylase (ACC) Program for NASH and other liver diseases. The deal totaled $400M.|
|IMS Health Holdings, Inc., United States||Quintiles Transnational Holdings, Inc., United States||The merger with Quintiles was one of four deals IMS Health Holdings made in 2016. IMS Health Holdings continues to seek opportunities to strengthen its foothold in data analytics, data management and informatics. The deals totaled approximately $8.8B.|
|Pfizer, Inc., United States||Anacor Pharmaceuticals, Bamboo Therapeutics, Medivation and AstraZeneca PLC, Small Molecule Anti-Infective Business Unit||Rather than the inversion opportunity driven mega merger Pfizer hoped to close with Allergan in 2016, they made four acquisitions totaling about $21.3 billion. Each of the four deals strengthened Pfizer’s position in emerging treatment areas. For example, their acquisition of Anacor included a compound called crisaborole that represents great promise for the treatment of eczema – a large patient population. Could be blockbuster opportunity.|
|Teva Pharmaceutical Industries Ltd. - Generic Products, Israel||Allergan plc, Ireland||Teva Pharmaceutical Industries bought Allergan’s global generic business unit for approximately $38.8B. This acquisition should place it among the top ten pharmaceutical companies in the world.|
|Lonza Group AG, Switzerland||Capsugel Belgium NV, Belgium||The acquisition of Capsugel was one of three deals Lonza made in 2016. The deals totaled approximately $5.8B.|
|Baxter International, Inc., United States||Claris Injectables Ltd., India||Claris Injectables was Baxter’s one acquisition in 2016. The deal totaled $625M. Baxter is calling its acquisition of Claris Injectables “a foundational asset” as it seeks to become a global leader in the generic injectable pharmaceuticals market, which is estimated to be a $40 billion market and is growing at a 10% compound annual growth rate.|
|Asahi Glass Co., Ltd., Japan||CMC Biologics A/S, Denmark||Asahi Glass agreed to acquire 100 percent stake in CMC Biologics. CMC Biologics annual revenue was approximately $47M.|
|Sumitomo Dainippon Pharma Co. Ltd., Japan||Tolero Pharmaceuticals, United States||Sumitomo Dainippon Pharma Co. acquired Tolero Pharmaceuticals for approximately $780 million to reinforce their oncology drug pipeline.|
- Pharma Letter
- “Pharma Year in Review,” C&EN
- “Baxter Buys Claris’ Generic Injectables Subsidiary for $625M,” GEN, December 15, 2016
- “AbbVie to Expand Oncology Presence Through Acquisition of Stemcentrx and its Novel, Late-Stage Rova-T Compound for Small Cell Lung Cancer,” April 28, 2016, Abbvie press release
- “Pharma M&A Market: Latest Challenges and Opportunities,” Peter Young, Pharmaceutical Executive, December 14, 2016
- “Review of the year 2016: M&A,” George Underwood, Pharma Times, December 2016
- “Trump’s corporate tax holiday could spur pharma M&A,” Carl O’Donnell, Reuters, December 6, 2016