Pharmaceutical Executive Digest Europe - January 21, 2009 - (Page 5) The Top 15 Pharma Deals of 2008 Pharmaceutical Executive’s Walter Armstrong reviews 2008 in deals to see how Big Pharma deployed its biggest asset: cold hard cash. D oing deals has become Big Pharma’s lifeline, and that fact was more evident in 2008 than ever before. For early-stage products, M&As, licensing deals and other strategic alliances proliferated as drug makers tried to meet a growing range of challenges, from adding revenues or filling pipelines, to entering new markets or exiting therapeutic areas, to diversifying or streamlining a business model. Yet for a variety of reasons, pharma put the brakes on its general M&A activity in 2008. For the first three quarters of the year, the volume of M&As was $28.9 billion, a dramatic decrease from 2007’s total of $79.5 billion, according to Young & Partners. Q308, at $6.2 billion, was especially slow. M&As done by biotechs are up, however: $4.2 billion for the first three quarters, compared to last year’s total, $3.97 billion. The number of deals is also on track: 16 and 21, respectively. Following are the highlights of the year in deals. Please note that every deal mentioned, with the exception of Roche/Genentech, has been agreed to by both parties, but many of them have yet to close. Doing deals has become Big Pharma’s lifeline, and that fact was more evident in 2008 than ever before. Compulsive shopping GlaxoSmithKline likely set some kind of record during its eight-week shopping spree. Starting in late August, the drug giant inked, among other deals, a $1.5 billion collaboration with the privately owned Cellzome; an $820 million collaboration with Valeant to develop its Phase III epilepsy drug; a $553 million licensing deal for Affiris’s experimental Alzheimer’s vaccines; a $210 million acquisition of BMS’s Egyptian drug business; and a $57 million buyout of Genelabs, developer of hepatitis C technology. And GSK isn’t even the year’s top shopper. According to Datamonitor, the firm was outpaced in M&A activity by both Pfizer and Roche, and tied with Johnson & Johnson. In its self-proclaimed drive to become the leader in personalised medicine, formerly mild-mannered Roche emerged as the leader in the hostile-takeover category. The new bully on the biotech block, the Swiss drug and diagnostics maker forced medical-device maven Ventana to knuckle under in January, albeit for $3.4 billion. Six months later, the firm offered $43.7 billion for the 41 percent of Genentech that it doesn’t already own. But the San Francisco- based firm is not surrendering without a fight—or at least a bigger paycheck. Biotech battles For years, biotechs have been fetching ever-higher prices from Big Pharma, but that trend was thrown into reverse last year. The financing raised by these entrepreneurial spirits plunged to $8.2 billion through September, down more than half from $17.9 billion in 2007 — the lowest tally in a decade, according to Burrill & Company. Meanwhile, Big Pharma is perched on piles of cash. Pfizer has $26.2 billion; Novartis, $16.2 billion; and Lilly, $5.2 billion—or it did until it took on debt to buy ImClone. The only problem for drug makers may be when to schedule the shopping spree for the best fire-sale prices. Only biotech powerhouses like Genzyme, Biogen Idec, Gilead, and 8 HEALTH IT Obama and Biopharma! 11 BioFutures Forging a true industry– academia partnership 13 CALENDAR Next month’s pharma events 3 NEWS Pharma’s next ten years
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