Despite the SARS-CoV-2 pandemic, biopharma dealmaking values in the second quarter of 2020 increased by 22.4% since the first quarter, and M&A values – thanks to Abbvie Inc. completing in May its $63 billion buyout of Allergan plc – are at a four-year high.
A total of 529 deals, including licensings, collaborations and joint ventures, reported during the second quarter had projected values of nearly $49 billion, a step up from the 471 deals and $40.8 billion value of the first quarter. In comparing 2020 to each of the previous three years, the second quarter has had the highest volume and value for any of the past 14 quarters.
Of the three months that make up the second quarter, the best performing month was June with 204 deals valued at $27.8 billion, making it the best month so far this year, above January’s 188 deals valued at $20.4 billion. April was the next highest for the second quarter, and the third for the year, with 166 deals valued at $13.5 billion. May had 159 deals valued at $7.66 billion, which was below what was seen in March when the U.S. lockdown began due to COVID-19. That month, there were 165 deals valued at $12.9 billion. The lowest deal month so far this year is February with 118 deals valued at $7.6 billion.
In total, 1,000 deals in the first half of 2020 have projected values of $89.84 billion. About one-fifth of those deals are focused on finding solutions for COVID-19. Those 203 deals have projected values of $2.34 billion. Broken down, there were 53 deals valued at $895 million in the first quarter and 150 deals valued at $1.44 billion in the second quarter. Most of the COVID-19 deals in the second quarter occurred in April with 62 valued at $1.12 billion. Since then, the number has decreased each month, from 48 valued at $177.79 million in May and 40 valued at $142.02 million in June. Next to April, the second highest COVID-19 deal month for the year was March, with 37 deals valued at $892.08 million, and including the highest COVID-19 deal to date, a $748 million pact between Pfizer Inc. and Biontech SE to co-develop and distribute mRNA-based vaccine, BNT-162, against the infection. There were only four COVID-19 deals in January and 12 in February with a combined value of $3 million.
So far this year, 28 deals valued at $1 billion or more each have a combined projected value of $57.16 billion, which is about 64% of the total for the year. Fifteen of those deals occurred in the second quarter, with 10 of them in June. In fact, five of the top deals for the year were completed in the second quarter with three of them announced in June.
Those five in order of value include a $3.9 billion global deal in June between Abbvie and Genmab A/S to develop and commercialize bispecific antibodies for cancer; a $3.88 billion global deal in June between Alteogen Inc. and an undisclosed company to develop and commercialize subcutaneous administration of biologic products with Alteogen’s ALT-B4; a $3.1 billion global deal in April between Fate Therapeutics Inc. and Janssen Biotech Inc. to develop CAR NK and CAR T-cell product candidates against up to four tumor-associated antigens for hematologic malignancies and solid tumors; a $3.065 billion global deal in May between Bristol Myers Squibb Co. and Repare Therapeutics Inc. to develop multiple oncology drug candidates using the Sniprx synthetic lethal discovery platform; and a $3.03 billion global deal in June between Glaxosmithkline plc and Ideaya Biosciences Inc. to develop and commercialize Synthetic Lethality programs targeting methionine adenosyltransferase 2a, polymerase theta and Werner helicase for solid tumors.
Other large second-quarter deals that were valued at more than $2 billion were those between Roche Holding AG and Innovent Biologics Inc., focused on cell therapies and bispecific antibodies for hematological and solid cancers; Uniqure BV and CSL Ltd. to develop and commercialize etranacogene dezaparvovec for hemophilia B gene therapy; and Takeda Pharmaceutical Co. Ltd. and Neurocrine Biosciences Inc. to develop and commercialize therapies for psychiatric disorders.
Gilead Sciences Inc. also signed two big money deals during the quarter, one ex-U.S. $2 billion partnership to co-develop and commercialize Arcus Biosciences Inc.’s cancer programs, and the other to acquire a 49.9% equity interest in Pionyr Immunotherapeutics Inc. for $1.74 billion. Another large deal was a $2 billion agreement in April for Blackstone Life Sciences to acquire Alnylam Pharmaceuticals Inc.’s royalties in inclisiran.
Translate Bio Inc. and Sanofi SA, which together are working on an mRNA vaccine for COVID-19, agreed toward the end of the quarter to expand an existing agreement to develop mRNA-based vaccines for a variety of infectious diseases in a deal worth $1.4 billion. Three other billion-dollar deals during the quarter include Affinia Therapeutics Inc. and Vertex Pharmaceuticals Inc.’s deal for $1.6 billion focused on AAV capsids to deliver genetic therapies for serious diseases; Evox Therapeutics Ltd. and Eli Lilly and Co.’s $1.23 billion deal to develop oligonucleotides for neurological disorders; and Accent Therapeutics Inc. and Astrazeneca plc’s $1.16 billion deal for therapeutics targeting RNA-modifying proteins to treat cancer.
Altogether, there were 13 $1-billion-plus deals in the first quarter worth $22.99 billion vs. 15 in the second quarter worth $34.17 billion.
Abbvie/Allergan M&A dominates
Abbvie’s $63 billion buyout of Allergan dominated the mergers and acquisitions completed during the second quarter, accounting for about 85% of the $74.19 billion total. It is the fourth largest biopharma M&A in BioWorld’s database.
There were 39 completed biopharma M&As in the second quarter of 2020 compared with the first quarter’s 31, which were valued at $45.46 billion.
Aside from the Abbvie/Allergan M&A, three others in the second quarter rose above the $1 billion mark, with Gilead Sciences’ purchase of Forty Seven Inc. in April for $4.9 billion, UCB SA’s acquisition of Ra Pharmaceuticals Inc. in April for $2.27 billion, and Novo Nordisk A/S’s takeover in June of Corvidia Therapeutics Inc. for $2.1 billion.
Another large M&A completed in the second quarter was The Menarini Group’s acquisition of Stemline Therapeutics Inc. for $677 million.