Beyond borders: global biotechnology report 2012

Big pharma stayed away from M&A deals

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US and European strategic alliances based on up-front payments, 2006-11

US and European strategic alliances based on up-front payments, 2006-11

EY, windhover information, MedTRACK and company news.

Merger and acquisition (M&A) activity in the biotech industry looked robust in 2011, but big pharma was conspicuously absent from the buyer's table.

Given the critical role that big pharma could play in supporting the biotech innovation ecosystem and the fact that the expected exit for most venture investors is an acquisition, this lack of activity is unsettling.

With big pharma in the midst of crossing the long-awaited patent cliff, many expected a more pronounced upsurge in transactions — particularly for targets with product revenue or very late-stage product candidates.

However, only Sanofi's acquisition of Genzyme (which really played out in 2010 but did not get finally negotiated and closed until 2011) entered the ranks of the year's 10 largest deals. Even more noteworthy, big pharma was the buyer in only 7 of the year's 57 M&A transactions.

US and European M&As, 2006-11

US and European M&As, 2006-11

Source: EY, Capital IQ, MedTRACK and company news.
Chart excludes transactions where deal terms were not publicly disclosed.

Meanwhile, the number of strategic alliances declined for the second straight year, and the potential “biobucks” value of these deals hit a six-year low.

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