In the last two years alone, Tony Drabble and Chris Wayman, also from our Global Life Sciences Transaction Advisory Services practice, have analyzed over 100 digital deals involving life science companies to determine where and why we are seeing these deals.
One of their key findings was that digital deals are occurring mainly in three areas:
- Digital therapeutics (for new or improved therapies)
- Real-world data (for greater disease insights and patient understanding)
- Advanced analytics (to maximize value from data)
Also, deals involving chronic diseases – particularly diabetes and respiratory diseases – are experiencing the most digital deal activity. Nearly half of the deals we observed are seeking to spur innovation and product development.
Across the deals reviewed, a wide variety of deal structures are being employed – the vast majority (approximately 74%) being non-equity-based partnerships and alliances rather than traditional M&A.
Questions companies should be asking
Understanding the digital ecosystem, selecting the right partners and structuring deals to both protect intellectual property and extract maximum value are important to success in navigating the digital economy. To get started, consider the following questions:
- How is digital affecting your business?
- Have you identified the gaps in your digital portfolio?
- Do you know who you want to partner with?
- Which deal types suit your current and future business model?
- How will you measure the success of your digital strategy?
- How will you integrate digital solutions into your organization and be confident of delivering the business benefits as well as the adoption of a digital culture?