April proved to be a big month for M&A activity in the Life Sciences industry as companies announced more than $29 billion in agreed upon transactions, the bulk of which occurred during the final week. This stood in stark contrast to the IPO market, which saw no completed Life Sciences offerings in U.S. markets during the month.
The largest M&A transaction in April was Nestle’s $11.6 billion agreement to acquire Pfizer’s nutrition business. The deal represents the largest acquisition ever for Nestle, expanding its presence in emerging markets where 85 percent of Pfizer Nutrition’s sales come from. April also saw Watson Pharmaceutical’s $5.6 billion agreement to buy the privately-held Actavis Group, Hologic’s $3.7 billion agreement to buy Gen-Probe, AstraZeneca’s $1.3 billion agreement to buy Ardea Biosciences, Takeda Pharmaceutical’s $800 million acquisition of URL Pharma, and Amgen’s $700 million deal to acquire Mustafa Nevzat Pharmaceuticals.
April also saw a total of $698 million in venture capital raised by U.S. companies. Bioindustrial financings lead the way with $261 million. Algae-based biofuels developer Sapphire Energy raised $144 million, the largest venture financing of the month. The therapeutics sector was a close second with $251 million.
Although partnering activity is still off the pace from 2011, April did see a number of notable transactions, including Merck’s potential $1 billion deal with Endocyte for its late-stage ovarian cancer therapy. Other transactions reflected the high prices early-stage therapeutic companies are commanding today. This includes Celgene’s potential $250 million deal with Epizyme for its pre-clinical epigenetic experimental cancer therapy and GlaxoSmithKline’s $223.5 million drug discovery collaboration with FivePrime Therapeutics focused on respiratory diseases.
Though overall M&A activity still lags the pace from a year ago, the performance from April indicates that it is picking up. This should continue as the pharmaceutical industry seeks to replace revenue from products losing patent protection. And in the absence of a vibrant IPO market, it also means that there are willing sellers to be had.