UPDATED: Firm ranks top 5 biotech deals in evolving pharma R&D landscape

With pharma groups hunting for external innovation, an analysis shows a spike in early-stage biotech partnerships during the first quarter of 2013. Overall deal volume and the number of buyouts climbed too during the first three months of the year compared to the same period a year ago, but the disclosed value of all the known deals dropped in the first quarter, according to figures from analysts at Deloitte Recap.

Draw whatever conclusions you wish, but call the jump from 158 licenses and joint ventures in the year-ago quarter to 195 such deals in the recent quarter a sure sign that pharma dealmakers have come out swinging in early 2013. Also, the number of M&A events increased from 47 to 75 in the same quarter-to-quarter comparison, according to the Recap numbers. But overall values are down despite the higher number of deals. In the M&A category, the value tally dropped from $13 billion in Q1 2012 to $10.1 billion in the same quarter this year. The licensing and JV value totals slipped from $5.7 billion to $3.9 billion in the same quarterly comparison.

The greatest increases in licensing deals were in the discovery through Phase I categories. There was also a notable jump in reformulation deals from three in last year's first quarter to 8 in the most recent quarter.

"It's back to basics in terms of deals. Companies are getting in ahead of any major clinical development that's being done with these products to perhaps get bettor control over what's being done in the clinic," said Christian Dokomajilar, a senior biotech analyst for Deloitte Recap. "We've always heard that Big Pharma companies are better at advancing clinical trials than biotech companies, especially smaller biotech companies."

Even before this report, anecdotal evidence pointed to a growing appetite for early-stage assets in the first few months of the year as pharma groups gobbled up rights to potentially game-changing therapies and new modes of treating disease. Drugmakers and payers have wrangled over pricing and reimbursement, with the U.K.'s NICE and other European authorities rejecting many new drugs. And the thinking goes that only the most innovative products, particularly for diseases without good treatment options, will gain payments in the future.

Indeed, the top 5 deals during Q1 reflect some of the trends seen in the overall numbers. Here's the list according to Deloitte Recap:

  • MacroGenics struck a deal with Gilead Sciences ($GILD) worth a total of $1.115 billion in a discovery-stage deal focused on bispecific antibodies against four undisclosed cancer targets. The upfront payment was $30 million.
  • Lundbeck and Otsuka sealed an $825 million deal, including $150 million upfront from Otsuka, to expand the companies' CNS collaboration to include Lundbeck's mid-stage 5HT6 receptor antagonist called Lu AE58054 in Alzheimer's disease.
  • Roche ($RHHBY) scored octreotide oral formulation for treatment of acromegaly and neuroendocrine tumors in a $595 million ($65 million upfront) deal with Chiasma.
  • Edison Pharma landed a $545 million deal with Japan-based drugmaker Dainippon, focused on EPI-743 and EPI-589, which are late-stage redox factors and mitochondrial augmenters for CNS disorders, for the Japanese market. Dainippon paid $35 million to begin.
  • Moderna Therapeutics busted out with discovery-stage deal with AstraZeneca ($AZN), which forked over $240 million initially with the promise of more than $420 million. The deal focuses on 40 messenger RNA therapies in kidney diseases, cardio-metabolic illnesses and cancer.

Cancer deals accounted for 33% of the activity in the first quarter, according to Deloitte Recap, as oncology maintains its foothold as the dominant area of R&D in the pharma industry.

Editor's Note: Updated with additional numbers and quotes from Deloitte Recap. Also, the link to a PDF of a slide deck with charts and figures was removed from this article. The PDF was not meant to be shared publicly, FierceBiotech learned after this story was published.

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