Mixed M&A figures a rare low in Europe's upbeat 2014

Analysts have identified an area of European biopharma in which 2014 was a middling year: M&A. The data show that while deals involving U.S. biotechs hit new highs, the renewed optimism in Europe has yet to translate into the signing of checks.

Healthcare investor HBM Partners laid out the figures in its annual biotech M&A report. While upfront fees in trade sales of venture-backed U.S. biotechs hit $4.5 billion (€3.9 billion)--a 100% increase over the mean of the previous 9 years--M&A in Europe is yet to take off. The $500 million European, VC-backed biotechs generated in upfront fees represents a 50% drop on 2013 and a 27% slide compared with the mean of the previous 9 years.

The gap between the U.S. and Europe widened in other areas, too. The difference in the premiums paid for U.S. and European biopharma companies--calculated as the increase in stock price on the day of the deal--has only been wider once in the past decade. European companies commanded a 31% premium, compared with 56% for their U.S. peers. The number and value of European buyouts with upfront fees of at least $100 million were also down on the previous year.

Extrapolating conclusions from such data is a risky business, but there is an apparent divergence in the M&A fortunes of U.S. and European biotechs. While M&A in the U.S. has increased across multiple metrics over the past few years, the figures for Europe have fluctuated. The question now is whether improvements in other areas of biopharma finances--which hit the U.S. before Europe--will lead to an uptick in M&A in 2015 and beyond.

- read the report (PDF)
- check out Bruce Booth's take