Overall, Ukrainian M&A recorded double-digit growth in both the number and value of deals announced in 2017: activity increased by 22% to 67 deals, with a combined value of USD 1 bn, 37% higher than the previous year. - KPMG Ukraine
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пятница, 27 апреля 2018 г.
вторник, 26 декабря 2017 г.
FierceBiotech’s top 10 stories of the year: Mergers, cuts and setbacks
by Ben Adams
We all love a top 10: It serves as a definitive "best of the best," and sometimes a look at the top of the chart can reflect the state of an industry.
Looking back at our most-read stories shows our readers certainly like a broad range of news and features: This year, for the first time I believe, a CRO story topped our charts. It's indicative of the kind of noise the contract research industry has been making over the past few years.
Our top story, by a clear margin, was the merger of INC Research and inVentiv Health, making the pair worth around $7.4 billion in May when the deal was announced. This came around a year after Quintiles and IMS Health came together in their massive $19 billion megamerger, and at a time when Big Pharma-biotech deals have been a little sparse, to say the least.
The second largest story is less surprising, as it’s all about cuts and reorgs, and it was Shire’s change up that saw readers come to the site in tens of thousands. The biopharma said it wasn’t expecting any major staffing cuts, but closure of some sites are in the cards. This all comes after some big buys for the company, and an attempt to bring closer together its R&D operations.
The third was something of a theme in 2017: R&D “consolidation”, or in this case, GlaxoSmithKline’s new chief Emma Walmsley looking to make a statement in research by wielding the ax to dozens of pipeline meds and putting its rare disease work in the crosshairs.
Then we come to our special features: FierceBiotech’s Fierce 15 2017, and the top pharma R&D budgets for last year. This year’s crop of Fierce 15 ranged across cancer, rare disease and neuroscience, with all vying to be big hitters in the race to be a next-gen biomedical company.
The top pharma R&D budgets, meanwhile, saw Roche and Novartis top the list of big spenders, with the average top 10 pharma seeing 17% of its total revenue going into R&D, with a combined $70 billion being spent across the top 10. Stay tuned for our top ten early next year, and we’re already on the look out for the next crop of early-stage biotechs for Fierce 15 2018.
Our sixth most read story of 2017 was AbbVie’s positive phase 3 psoriasis data on its potential blockbuster risankizumab, scoring a big win against its own major blockbuster Humira, as well as Johnson & Johnson’s Stelara. AbbVie is gunning for other inflammation indications as it looks to try and head off some of the losses it will rack up from Humira biosimilars, with revenue expected from 2019.
Number seven centered on President Donald Trump’s potential NIH director pick Dr. Patrick Soon-Shiong, CEO of I-O biotech NantKwest, who was rumored to have been the best paid CEO in the world. In the end, this didn’t happen of course. In fact, Soon-Shiong had a pretty bad year after a series of investigations from healthcare news site STAT alleged that he donated millions of dollars to philanthropic causes, which later circled back to his company. A promotional video for one its pipeline meds also drew ridicule on Twitter.
Meanwhile, STAT’s senior writer Adam Feuerstein, via the power of the poll, named Soon-Shiong the worst biopharma CEO of 2017.
In at number eight was an unusual story about biotech Acerta, bought up by AstraZeneca, which it turns out faked some early preclinical data for its drug acalabrutinib. AstraZeneca admitted the falsification in the fall, after a story from Retraction Watch, blaming a “former Acerta employee who acted alone.”
This got a lot of views, but did not upset the apple cart for AZ, as acalabrutinib was in fact approved by the FDA just a few weeks later as Calquence for certain blood cancers.
Number nine was related to the drawn-out saga of Elizabeth Holmes and her beleaguered Theranos. We ran many stories on this for FierceMedTech, but the most viewed was the fact that it turned out Holmes was $25 million in debt to her own company. This was found out by the Wall Street Journal, which has spent years investigating the company.
And finally, we have the tenth most viewed story of 2017: The FDA’s rejection of Amgen and UCB’s application for approval of osteoporosis candidate romosozumab, coming off of a safety scare, notably on potential cardiovascular adverse events.
Check out your top 10 below:
- INC Research and inVentiv Health merge in another major CRO deal
- Shire will cut U.S. locations and move HQ in consolidation push
- GlaxoSmithKline stops development of 30 pipeline prospects, mulls sale of rare disease unit as new CEO Walmsley makes her mark
- FierceBiotech's 2017 Fierce 15
- The top 10 pharma R&D budgets in 2016
- AbbVie’s risankizumab blows away aging rivals in phase 3
- Donald Trump considers NantKwest CEO for NIH chief
- AstraZeneca buy Acerta faked cancer drug data, company admits
- WSJ: In a twist, Holmes owes Theranos $25M
- Safety scare prompts FDA to reject Amgen’s romosozumab
вторник, 6 сентября 2016 г.
US deals dominate medtech M&A
| Source | EP Vantage |
| Company | Medtronic, Alcon, American Medical Systems, Baxter International, Covidien, DENTSPLY Sirona, Endo International, ev3, Fresenius, Gambro, Grifols, Johnson & Johnson, Liberty Dialysis Holdings, Novartis, Phadia, Sirona Dental Systems, Synthes, Thermo Fisher Scientific |
| Tags | Analysis, Company Strategy, Europe, USA, Medtech, Diagnostic, Various, Acquisition, Free Content |
| Date | September 06, 2016 |
A recent EP Vantage analysis revealed that, in the biopharma world, European companies are splashing the cash on US-based takeovers, while a lot less is spent in the other direction. But in medtech the opposite is true: US acquisitions of European companies are worth much more than European takeouts of US groups (see tables below).
The reason for the discrepancy is probably down to scale and resources: European medtech companies are generally smaller and less well funded than their cousins across the pond. There have been several sizeable takeouts of European groups in recent years, raising the question of which larger companies in the region could still be acquired. The perennial takeover target Smith & Nephew seems like one obvious contender.
As for European companies that could strike deals of their own, the imaging giants Siemens and Philips might look to the US for bolt-on buys. But with many other European groups lacking the firepower of their US counterparts, the current trend looks set to continue.
Cross border acquisitions
According to the latest analysis, US-on-US buyouts still made up the biggest chunk of the overall medtech deal value in the past five years, and today's $4bn deal between Danaher and Cepheid is another example (Danaher strikes again with Cepheid buy, September 6, 2016).
But the amount of dollars spent by US companies on European groups is not far behind. Even when Medtronic ’s record-breaking $50bn purchase of Ireland -based Covidien is excluded the value of US-on-Europe deals is still well above those flowing from Europe to the US.
European venture capitalists are much more risk-averse than those in the US, which has led to a particularly pronounced early-stage funding gap in on the continent (Vantage Point – Risk-averse European VCs drive medtech start-ups to crowdfunding, April 21, 2015). This means that European medtech groups find it harder to grow, so are more likely to be seen as prey rather than predator.
European VCs have raised several big medtech-focused funds this year, which could help address this funding gap (Vantage Point – Will medtech venture capital return to early-stage investments?, April 27, 2016).
Even so, it could take a long time for any benefit to trickle down in the form of a greater capacity to carry out acquisitions. The trend of big US groups buying European companies, either for their technology or to gain more tax-friendly headquarters, looks like it is here to stay for a while.
A lower tax rate was one consideration behind the biggest ever medtech deal, Medtronic ’s $50m purchase of Covidien , with which the US company gained an Irish domicile – although the bigger group insisted that it was not all about tax.
The Medtronic -Covidien buy accounts for most of the overall value of US acquisitions of Irish groups. If it is excluded, the most popular countries for US companies to do deals were Switzerland and the UK, which both have more attractive corporate tax rates than the US.
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Meanwhile, among the European groups looking to the US, Irish companies were the biggest spenders. However, many of these deals came from Covidien and Allergan – effectively US operations domiciled in Ireland . This trend was also seen in the pharma industry (Few M&A teams venture beyond domestic borders, August 24, 2016).
The biggest purchase of a US group by a European company was in fact a mixed medtech/pharma buy: Novartis ’s acquisition of Alcon gave it a portfolio of intraocular lenses and surgical equipment as well as ophthalmic drugs.
Endo is another pharma specialist that bought into devices through its acquisition of American Medical Systems – but it later sold off most of that unit to Boston Scientific (Endo exits medtech – almost, March 2, 2015).
It seems that while European companies can mix it with the big boys in the pharma industry, in medtech they are still the poor cousins. Until the funding situation changes, this is likely to continue to be the case.
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To contact the writers of this story email Madeleine Armstrong or Edwin Elmhirst in London at news@epvantage.com
среда, 25 мая 2016 г.
Pfizer's Buyout of Anacor Pharmaceuticals for $5.2 Billion Is a Bad Move
While complimentary to its product portfolio, Pfizer's acquisition of Anacor could take a long time to pay off for shareholders.
After an unexpected breakup in April that saw the pending megamerger between Pfizer(NYSE:PFE) and Allergan fall by the wayside, Pfizer has found its new target.
It's no secret that Pfizer has been looking to complement its roughly half-dozen therapeutic areas of focus with acquisitions in order to boost its late-stage pipeline and provide earnings accretion relatively quickly for its shareholders. In fact, during Pfizer's quarterly conference call, CEO Ian Read stated that the company was actively looking at ways to boost its innovative business with late-stage and/or commercial products. Pretty much everyone on Wall Street knew an acquisition was probably coming soon, the only question we had was how big it would be.
We now have our answer.
A complimentary fit
On May 16, Pfizer announced that it was acquiring Anacor Pharmaceuticals(NASDAQ:ANAC) for the hefty sum of $99.25 in cash per share, or a 55% premium to where Anacor shares closed on Friday. The crown jewel of the $5.2 billion acquisition is crisaborole, a non-steroidal topical anti-inflammatory PDE-4 inhibitor that's been submitted for regulatory review in the U.S. for mild-to-moderate atopic dermatitis (a type of eczema). Crisaborole is also being studied as a treatment for psoriasis. Pfizer believes that Anacor's lead compound could generate up to $2 billion in peak annual sales.
"Crisaborole is a differentiated asset with compelling clinical data that, if approved, has the potential to be an important first-line treatment option for these patients and the physicians who treat them," said Albert Bourla, Group President of Pfizer's Global Innovative Pharma and Global Vaccines, Oncology, and Consumer Health Businesses.
IMAGE SOURCE: PFIZER.
That "compelling clinical data" Bourla speaks of comes from the AD-301 and AD-302 phase 3 studies released in mid-July 2015 that showed a statistically significant advantage in clearing the chronic rashes that occur with atopic dermatitis compared to the placebo. In terms of primary endpoint, the percentage of patients experiencing an Investigator's Static Global Assessment (ISGA) score of 0 (clear) or 1 (almost clear) with a minimum two-grade drop at day 29 was 32.8% in AD-301 and 31.4% in AD-302 compared to the placebo's 25.4% and 18% respective effectiveness.
The secondary endpoint, which examined which patients achieved an ISGA of 0 or 1 regardless of whether or not they had a minimum two-grade drop, also demonstrated success for crisaborole. In AD-301 and AD-302, 51.7% and 48.5% of patients experience full or almost-full clearing, which compares to 40.6% and 29.7% full or almost-full clearing, respectively, for the placebo.
As icing on the cake, Pfizer also gains access to topical toenail fungal treatment Kerydin, which was approved by the Food and Drug Administration in July 2014.
Pfizer believes the deal will not materially affect its outlook in 2016, that it'll be slightly dilutive to full-year EPS in 2017, and be accretive to its bottom-line in 2018 and each year thereafter.
Sounds like a great deal, right? I'm not so sure.
Pfizer may have vastly overpaid for Anacor
While I'm all for having Pfizer use its cash flow to boost the inorganic growth side of the equation, I'd contend that it vastly overpaid for Anacor when it offered $5.2 billion for the drug developer.
IMAGE SOURCE: PIXABAY.
Taking this step by step, Pfizer really is getting two assets: kerydin and cirsaborole. Anacor does have other topical anti-inflammatory products in development, but they're all in the discovery or preclinical stages of development. Aside from these two therapies, the only other drug in clinical studies is AN3365 for infections caused by Gram-negative bacteria, and it's far too early to tell if this clinical therapeutic is effective.
Kerydin is, to be blunt, an afterthought in this acquisition. Anacor forged an agreement with Sandoz to help market Kerydin back in 2014, and last year total distribution and commercialization segment revenue was $69.7 million. With peak sales estimates of $400 million, it's not going to move the needle much for Pfizer.
The bigger concern would be for crisaborole. On one hand, there's probably a better than 50-50 shot at FDA approval come its PDUFA date in January 2017 thanks to the drug's meeting its primary and secondary endpoints in both studies and its being generally well tolerated by patients. With few options in treating atopic dermatitis, crisaborole could gobble up market share quickly. But, it's what happens one or two years from now when crisaborole is facing a bounty of potential new competitors that worries me.
IMAGE SOURCE: CELGENE.
Celgene's (NASDAQ:CELG) oral PDE-4 inhibitor Otezla is already approved to treat psoriatic arthritis and plaque psoriasis, but Celgene has hopes of eventually gaining a label expansion for atopic dermatitis as well. In a previously conducted, though small, study involving Otezla that defined treatment benefit as a 50% (or higher) decrease in the Eczema Area and Severity Index (EASI), Otezla delivered a 62% success rate. Keep in mind that EASI and ISGA aren't comparable measurements, so we can't simply say one drug is better than the other. But it does suggest that Otezla could be on track to become the first oral eczema treatment for those with moderate-to-severe forms of the disease.
In addition, Regeneron Pharmaceuticals (NASDAQ:REGN) and Sanofi (NYSE:SNY) are expected to file for regulatory approval of injectable dupilumab for the treatment of moderate-to-severe atopic dermatitis in the third quarter. In the LIBERTY AD SOLO1 and SOLO2 trials 37% and 36% of patients who an IGA score of 0 or 1 (clear or nearly clear) compared to just 10% and 8.5% for the placebo. EASI improvement from baseline was also a healthy 72% and 69% for dupilumab compared to just 38% and 31%, respectively, for the placebo. Regeneron and Sanofi's injection was also well-tolerated.
IMAGE SOURCE: SANOFI.
Roche, AstraZeneca, and Chugai in Japan are also working on midstage atopic dermatitis therapies. This is an increasingly crowded space, and $2 billion seems like a longshot with other successful therapies making their way down the pipeline.
Even with the assumption that crisaborole becomes a blockbuster ($1 billion in annual sales), it could be a very long time before Pfizer realizes a "gain" on its investment. Assuming a healthy margin on crisaborole of say 70%, and taking into account added revenue from Kerydin, the dilutive effect this acquisition could have on 2017 EPS, and the likelihood that crisaborole would take a few years to ramp up sales, it might be 2024 or 2025 before Pfizer finds its $5.2 billion "investment" in Anacor yielding positive results.
The good news here is Pfizer is generating more than enough cash flow to facilitate additional deals, and its oncology segment is on fire with an immuno-oncology offering (avelumab) waiting on the wings. The bad news is I don't believe its acquisition of Anacor was a particularly good move, and I don't see any immediate benefits to this deal for shareholders.
There's something big happening this FridayI don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was the best performing in the U.S. as reported by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, are going to reveal their next stock recommendations this Friday. Together, they've tripled the stock market's return over the last 13 years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.
понедельник, 7 марта 2016 г.
понедельник, 19 октября 2015 г.
Merger Integration Approaches
Philippe Haspeslagh and David Jemison (90) developed concept to define which approach would be most appropriate when integrating various parts of an organization after an acquisition. There are a number of traditional criteria that drive the integration approach: size of the respective businesses, style of the acquirer, overlap in terms of products and customers, etc. But the authors suggest to take into account two additional criteria:
The need for organizational autonomy should be viewed in the context of creating value through the merger. It is driven to a large extent by the question of whether the merger rationale is based on acquiring a specific set of capabilities. A certain degree of autonomy may be necessary to preserve and develop these strategic capabilities.
The axis of strategic interdependence is fairly self-explanatory. It tends to be high if the businesses operate in similar markets, significant cost synergies are expected, and value is created by transferring a significant amount of functional or general management skills.
As a result, the authors see four broad approaches to merger integration:
Preservation: Keep the sources of the acquired benefits intact, nurture the acquired business.
Symbiosis: Take a gradual approach, pick the best of both worlds, pay careful attention to cultural integration issues.
Holding: No integration, run the business fairly separately, focus on financial benefits, risk sharing, general management capabilities.
Absorption: Push for a quick and full integration, take courageous actions.
The need for organizational autonomy should be viewed in the context of creating value through the merger. It is driven to a large extent by the question of whether the merger rationale is based on acquiring a specific set of capabilities. A certain degree of autonomy may be necessary to preserve and develop these strategic capabilities.
The axis of strategic interdependence is fairly self-explanatory. It tends to be high if the businesses operate in similar markets, significant cost synergies are expected, and value is created by transferring a significant amount of functional or general management skills.
As a result, the authors see four broad approaches to merger integration:
Preservation: Keep the sources of the acquired benefits intact, nurture the acquired business.
Symbiosis: Take a gradual approach, pick the best of both worlds, pay careful attention to cultural integration issues.
Holding: No integration, run the business fairly separately, focus on financial benefits, risk sharing, general management capabilities.
Absorption: Push for a quick and full integration, take courageous actions.
суббота, 17 октября 2015 г.
The 2015 M&A Report
Increasing Returns with M&A
by Jens Kengelbach, Georg Keienburg, Ketil Gjerstad, Jesper Nielsen , Decker Walker, and Stuart Walker
The indications of recovery early in 2014 proved prescient. The full year saw the global number of M&A deals and total deal value return almost to 2005 and 2006 levels, which were surpassed only by the heights achieved prior to the dot-com collapse in 2000 and the financial crisis in 2008. M&A activity has been broad based geographically—with double-digit increases in all the major regions of the world—and has taken place across a wide range of industries. The deals in each industry, however, are rooted in that sector’s or segment’s particular dynamics. The long-awaited recovery appears to have legs—deal volume and deal value have continued to show strength in the first two quarters of 2015—although it bears remembering that M&A cycles are getting shorter over time, and the drop in deal value from the past two market peaks was severe—more than 80 percent within 18 months of the high points in 2000 and 2007.
In The Boston Consulting Group's 2014 M&A report, we discussed how the market was being fueled in part by a continuing rise in divestitures, which represent a powerful strategy for unlocking value and improving performance by focusing on core operations. (See “Creating Shareholder Value with Divestitures,” BCG article, September 2014.) Divestitures continue to be a vital source of M&A activity. But as economies around the world improve, corporate cash reserves grow, and financing remains cheap, the question in the boardroom becomes, “How do we spend the money?”
For CEOs in high-growth sectors, such as technology, there are plenty of opportunities to invest in organic expansion through new products, markets, and locations. For companies in more mature industries—energy, health care, consumer goods, and financial services, to name a few—the outlook for internal growth is often less robust. One answer to the spending question lies in channeling cash reserves and inexpensive financing into growth through acquisition. But even as M&A volumes soar, big questions linger around the ability of companies to generate value by buying their way to growth. (See “Should Companies Buy Growth?,” BCG article, October 2015.)
Acquiring revenue is certainly one way to grow the top line, but economists, M&A professionals, and other experts frequently debate how successful acquisitions are at delivering bottom-line growth—and especially growth in value for shareholders. Our own research, based on BCG’s proprietary global database of more than 40,000 M&A transactions since 1990, shows that the results vary widely and depend on a range of factors, including industry, market dynamics, metrics measured, time frame, and an individual company’s own history and experience with making and integrating acquisitions. (See “From Acquiring Growth to Growing Value,” BCG article, October 2015.)
The M&A Recovery Picks Up Pace
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