The 2019 Q2 biotech and pharmaceutical transactions were defined by an active IPO summer market as deal value increased across all categories when compared to the same period in 2018 (source: Medtrack Informa Database).  The results also highlight the ramifications on the industry from various changes in the global economic outlook.

Hot IPO Summer

The bio-tech market experienced more deals in Q2 2019 relative to Q1 2018 with deal value reaching $255.9 billion, up from $29.2 billion in Q2 2018. The heat up in the market was mostly driven by a higher volume of initial public offerings and M&A deal activity. Specifically, IPOs were particularly strong as total deal value reached $136.6 billion in Q2 2019, overshadowing Q1 2019 numbers by a large margin. The number of public offerings increased to 55 in Q2 2019, up from 22 offerings during the same period last year. BridgeBio (a Teknos client) and Adaptive Biotechnologies took the lead as the two companies raised $349 million and $300 million, respectively.  Just missing the Q2 deadline (July 1, actually – and not represented in the data above) Morphic Holding, Inc. (also a Teknos client) raised gross proceeds of approximately $90 million.

Q2 2019 deal volume in the M&A market is up by 36% year over year reaching $97 billion for the quarter as two mega deals were announced. The usual suspects AbbVie and Pfizer paid $63.0 billion and $11.4 billion for Allergan and Array BioPharma, respectively. Although acquisitions and IPOs were the buzz of the market during Q2 2019, licensing deals also experienced an increase. Deal value was up nearly 18% in Q2 2019 reaching $11.9 billion, driven by Gillead Sciences’ $2 billion agreement with Goldfinch Bio.

Oncology Overshadows the Pack

Oncology led the pack in deal volume with 44 announced deals despite a 27% year over year decline in total deal volume. Deal value for oncology related companies reached $8.1 billion in Q2 2019, compared to around $3.3 billion in Q2 2018. Most of the top 10 categories by indication experienced a decline in Q2 2019, except the other and dermatology categories. The other category, which includes drug delivery services, imaging technology, and drug discovery technologies, increased by $1.5 billion in deal value in Q2 2019 reaching $1.7 billion.

North America dominates in concert with Europe

Life Science Value of Deals by category Q2 2019

Although deal volume declined by 16.3% and 9.7% in the North American and European regions, respectively, the two regions dominated global transaction activity by deal value as North America and Europe accounted for $63.1 and $74.7 billion, respectively. More notably, cross-border deal activity by deal value reached $15.1 billion in Q2 2019, up from $11.9 billion in Q2 2018.

How can we help?

Trying to make sense of these issues requires a deep understanding of the biotechnology market, as well significant knowledge of how biotechnology companies operate. Teknos Associates is uniquely positioned as a result of our significant experience working closely with biotechnology companies at all stages of development.  We have assisted organizations with valuations associated with future sales, examined the potential value of therapies to help guide companies in the allocation of their research and development efforts, and performed strategic analyses to assist in positioning companies for organic and inorganic growth.

To learn more, please view our presentation and contact us at info@teknosassociates.com .

Note: Transaction totals may not sum across different types, indication, and regions due to available data.