Consulting firm EY released its annual report on mergers and acquisitions (M&A) to coincide with the JP Morgan Healthcare conference this week. For 2019, EY indicates there were $357 billion in life science deals, an “all-time record,” surpassing the previous high in 2014.
“2019 has been a ‘mega’ year driven by pharma buyers,” said EY consultant Peter Behner. “In 2020, firepower remains plentiful and we expect to see more activity in medtech and big biotech, with megamergers coming from companies with acute growth gaps.”
2019 started off in January when Bristol-Myers Squibb announced plans to acquire Celgene for about $75 billion. In June, AbbVie announced plans to acquire Allergan for $63 billion. AbbVie noted that a deal of this size was planned to deliver immediate scale to its growth platform and meet its strategic goal of decreasing reliance on Humira. The company noted at the time, “Smaller bolt-on acquisitions provide opportunities for future growth, but also require significant R&D investment amid scientific and clinical uncertainty. This transaction offers immediate compelling financial and strategic value to our shareholders with a much lower risk profile.”
Other notable deals included Roche’s acquisition of Spark Therapeutics for $4.8 billion. In 2017, the FDA approved Spark’s gene therapy, Luxturna (voretigene neparvovec), a gene therapy for a rare, genetic type of blindness. After 10 months, the deal was finally completed on December 17. Roche saw Spark’s gene therapies for hemophilia as complementary to its own hemophilia treatment, Hemlibra. In November, Roche also acquired Promedior for up to $1.4 billion.
In late November, Novartis bought The Medicines Company for $9.7 billion. Under the terms of the deal, Novartis paid $85 per share in cash, which is about a 41% premium of The Medicines Company’s 30-day volume weighted average of $60.33 on November 22 and about 24% of its closing share price of $68.55 on the same day. The boards of both companies unanimously approved the acquisition.
Roivant Sciences, Vivek Ramaswamy’s umbrella companies, sold ownership of five Vant companies to Japan’s Sumitomo Dainippon Pharma for $3 billion. Sumitomo Dainippon also was buying an equity stake of more than 10% of Roivant shares. The five Vant companies are Myovant Sciences, Urovant Sciences, Enzyvant Sciences, Altavant Sciences, and Spirovant Sciences. Spirovant is a new Vant that focuses on developing gene therapies for cystic fibrosis.
And Eli Lilly and Company announced it was buying Loxo Oncology for $235 per share in cash, which comes to about $8 billion. Under the terms of the deal, Lilly acquired all outstanding Loxo shares for $235 in cash.