CA-CLARIVATE-ANALYTICS

Clarivate Analytics, the global leader in providing trusted insights and analytics to accelerate the pace of innovation, has revealed that the market value of the most innovative and impactful global life sciences transactions of 2017 increased by 6% totaling US $364 billion, despite a decrease in overall deal volume. The transactions nominated for the annual Clarivate Cortellis Deal of the Year Awards include licensing and mergers and acquisitions. The announcement of the nominees at the 36^th Annual J.P. Morgan Healthcare Conference in San Francisco coincided with the Clarivate Deals and Portfolio Annual Review presentation – the foremost independent analysis of the economic trends shaping the life sciences sector in 2017.

Clarivate’s Deals and Portfolio Annual Review showcased a deep-dive analysis of 4,234 life sciences transactions. While overall the aggregate dollar value for deals increased from 2016, deal volume dropped by approximately 3% and saw contractions in almost every type of deal structure. This represents a reversal from last year when deal volume was up, but deal dollars were down.

“There is a healthy appetite for acquisitions and strong liquidity for deals in today’s market, but several factors contributed to deal volume falling below the last two years,” said Laura Vitez, commercial insights manager at Clarivate. “2017 saw a stronger IPO market for biopharma than the previous year, which meant companies had more viable alternatives to stay independent. We also experienced high valuations that resulted in heightened expectations during deal discussions. Finally, we saw many U.S. companies take a wait-and-see approach as the prospects for corporate tax reform played out right up to the end of the year.”

A total of ten Deal of the Year nominees was announced, five each in the categories of M&A and licensing. They include some of the industry’s most recognizable names (AstraZeneca, Celgene, and Merck) and life sciences upstarts like Rigontec, CureVac, and IFM Therapeutics. Nominees were recognized for innovations in creative deal structures, the use of novel technology, addressing unmet medical needs and new market penetrations. The analysis was drawn from the Cortellis suite of solutions from Clarivate Analytics. Industry participants may vote for the Deals of the Year at http://info.clarivate.com/DOTY . Winners will be announced in the beginning of February 2018.

Vitez added: “2018 shows promise for significant deal making, driven in large part by the lower corporate tax rates and tax repatriation allowances that were included in the final U.S. tax bill signed in December. U.S. biopharma companies comprise one-third of the top U.S. companies’ offshore cash holdings. When combined with the new lower corporate tax rates, we anticipate a considerable amount of the tax savings and repatriated cash will be used for M&A activities.”

This year’s Deals and Portfolio Review included a particularly deep investigation into oncology trends, which account for the largest number of M&A transactions by therapeutic area and the largest volume of licensing transactions. All but one of the top 20 dealmakers were active in oncology transactions last year.

“Oncology deals represented more than three times as many deals as neuroscience, the next most prevalent therapeutic area,” said Jaime Munro, global practice leader for portfolio and licensing at Clarivate. “Interestingly, we are seeing a trend of oncology deals focusing on earlier stages, with discovery and preclinical assets the focus of nearly two-thirds of oncology deals.”

2017 Deal of the Year nominees are:

M&A

J&J/Actelion
Johnson & Johnson agreed to acquire Actelion in a $30 billion deal that is second in size only to the 2009 Roche/Genentech merger in pharma and biotech M&A. J&J gains the worldwide rights to ponesimod and cadazolid, while Actelion spins out its research and early-stage assets into a new company.

Bioverativ/True North
Bioverativ acquired True North, a private, clinical stage company focused on candidates for complement-mediated diseases, for $825 million total with $400 million upfront. This early acquisition, which included $425 million in milestones, strengthens innovation in a rare blood disease.

BMS/IFM Therapeutics
In a deal that had everything – a young firm, cool technology and a spinout – BMS acquired IFM for $2.32 billion, with $300 million upfront. The cancer sector deal includes $1.01 billion in milestones for IFM’s preclinical STING (simulator of interferon genes) and NLRP3 agonist programs.

Gilead/Kite
Gilead acquired Kite, a developer of cell therapies for cancer treatment that express either a chimeric antigen receptor (CAR) or an engineered T-cell receptor (TCR), depending on the cancer type. This transformative $11.9 billion deal brings immuno-oncology to the forefront at Gilead.

Merck/Rigontec
Merck acquired Rigontec, a University of Bonn spinout focused on developing retinotic acid-inducible gene 1 (RIG-1) targeting therapies for various tumors. The $552.3 million acquisition was a smartly structured early sale, and RIG-1 has potential with Merck’s Keytruda.

Licensing

AstraZeneca/Pieris
The companies entered into a $2.145 billion deal that included $45 million upfront, under which AstraZeneca would develop and commercialize inhaled respiratory drugs, including PRS-060, using Pieris's Anticalin platform for respiratory diseases. The transaction leverages a novel technological modality with multiple co-development opt-ins.

Celgene/BeiGene
Celgene and BeiGene entered into a licensing agreement to develop and commercialize cancer drug BGB-A317 to combat solid tumors. The $1.292 billion deal includes $263 million in upfront cash and a $150 million equity stake. The deal is a win for both companies, as Celgene gets a PD-1 for its immuno-oncology backbone, while BeiGene gains an instant China portfolio.

Amgen/CytomyX
This creatively structured $1.668 billion discovery stage licensing deal includes $40 million in upfront cash and $20 million in equity for the development of T-cell engaging bispecific antibodies against EGFR and certain immuno-oncology targets worldwide.

Eli Lilly/CureVac
Eli Lilly licensed CureVac’s RNActive technology for the development and commercialization of up to five cancer vaccine products worldwide. A $1.803 billion deal with $50 million upfront and a $53 million equity stake, this is CureVac's largest collaboration to date, highlighting the industry's move toward targeting neoantigens.

AbbVie/Alector
Under this discovery stage deal, AbbVie will develop and commercialize Alector's immune therapies against Alzheimer’s disease and other neurodegenerative disorders worldwide. It works toward the promise of immuno-neurology by targeting microglia and macrophages – immune cells in the brain. The $225 million announcement includes $205 million upfront and $20 million in equity.

About Clarivate Analytics
Clarivate™ Analytics is the global leader in providing trusted insights and analytics to accelerate the pace of innovation. Building on a heritage going back more than a century and a half, we have built some of the most trusted brands across the innovation lifecycle, including the Web of Science™, Cortellis™, Derwent™, CompuMark™, MarkMonitor® and Techstreet™. Today, Clarivate Analytics is a new and independent company on a bold entrepreneurial mission, to help our clients radically reduce the time from new ideas to life-changing innovations. For more information, please visit clarivate.com .

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