The Health Care M&A Monthly: Biotechnology Boom--

 

Sector Announces 11 Deals In February Worth $5.4 Billion

 

February saw the announcement of 11 deals in the Biotechnology sector worth a combined total of $5.4 billion. This activity accounted for 15% of  the deal volume but 58% of the all health care M&A dollars for the month. The buyers included other biotech firms and big pharma. The assets acquired ranged from whole companies to single products to collaboration agreements.

The largest deal of the month saw Japan’s Dainippon Sumitomo Pharmaceutical Co. (T: 4506) taking advantage of a strong yen. It is paying up to $2.63 billion to buy Boston Biomedical, a Massachusetts company engaged in discovering, developing and commercializing cancer drugs; its proprietary technology targets cancer stem cells. Under terms of the deal, Dainippon Sumitomo will pay $200.0 million upfront; $540.0 million in development milestones; and up to $1.89 billion in sales milestones. This deal gives the buyer two oral drugs in clinical development, BBI608 and BBI503, that target cancer stem cells. The company wants to develop an oncology franchise along side of its existing CNS franchise. Citigroup Global Markets provided Dainippon Sumitomo with financial advice on this deal. Our April issue will give further examples of Japanese buyers benefiting from a strong yen to make overseas acquisitions.

The Belgian biotech firm Galapagos NV (Euronext: GLPG) is entering into a collaboration with Abbott Laboratories (NYSE: ABT) to discover and develop drugs for treating inflammatory disease such as rheumatoid arthritis. Accordingly, this deal gives Abbott access to a novel potential treatment for inflammatory disease. Under terms of the deal, ABT will pay $150.0 million in an upfront fee. Further, it will pay $200.0 million to license the drug. Finally, it may make up to $1.0 billion in certain development and sales milestone payments. The initial $150.0 million ABT is paying is for Galapagos’s experimental drug GLP0634, which is part of a family of compounds that inhibit enzymes associated with inflammation.....Want to read more? Click here for a free trial to The Health Care M&A Monthly and download the current issue today