Venture deals may be well off the pace set in 2011, but even a casual observer of the biotech industry could tell you that M&A is way up. Now Credit Suisse has stepped up with a new set of figures to back up the trend, noting that we haven't seen these kinds of numbers since Roche bought out Genentech for $46.7 billion in 2008.
This year, though, we've been seeing more deals for smaller amounts, with Gilead's $11 billion Pharmasset buyout leading the way, followed by Bristol-Myers' $5.3 billion buyout of Amylin, Glaxo's $3 billion deal for Human Genome Sciences, and Bristol-Myer's $2.5 billion purchase of Inhibitex. Add it all up and Credit Suisse found a $25 billion deal tally compared to $10 billion by this point last year, according to a Reuters report.
"There seems to be a lot of interest in select oncology names, as well as the inflammatory and autoimmune spaces," Credit Suisse's Charles Newton tells the news wire.
Inhibitex, Amylin, and Human Genome Sciences all fetched the highest premiums Credit Suisse has ever seen, with buyers paying 100%-plus to close the deal. At least in the cases of Inhibitex and Amylin, that had a lot to do with the competitive nature of the M&A scene right now, as big companies snap up smaller ones as blockbusters are losing patent protection.
Next step: Figuring out if the companies were worth the money. Every big round of acquisitions is followed by plenty of number crunching. And while it usually takes a few years to come to a conclusion, Bristol-Myers may not have so long to wait if it turns out their Inhibitex buyout delivered a dud in the clinic.
M&A is hot, and that may burn some buyers.
- here's the Reuters story