Insight journal - Deals and alliances

Asset purchase deal trends among life sciences companies

Posted on 19 September 2014

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An asset purchase agreement is an agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of life sciences company’s assets.

Life sciences companies may seek to dispose of an asset simply because it is surplus to requirements. Or it may seek to dispose of assets in order to raise funds to invest in others parts of its business. Or it may be due to a regulatory requirement to dispose of certain business or product assets as a result of a pending business merger in order to meet competition regulations.

Recent life sciences companies analysis gathered from our database Current Agreements, showcases a high volume of dealmaking activity in the asset purchase deal type among the pharma and biotech companies worldwide.

The article here reviews the recent deal trends among life sciences companies in the asset purchase deal type area.

According to Current Agreements life science deals and alliance database, there have been over 1300 asset purchase deals in the last five years alone.

The figure below indicates that the number of asset purchase agreements announced has started to fall since 2011, suggesting that asset purchase has become less popular for licensors, possibly due to the economic climate. However, there is still a high number of deals announced and signed every year for assets in the industry.

Figure 1: Asset purchase partnering since 2009

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Source: Current Agreements, 2014

Assets purchased tend to take one of four forms in the biopharma sector;

-         Business assets

-         Product assets

-         Royalty assets

-         Technology assets

In recent years, monetizing royalty assets has increased with both corporate and academic licensors electing to sell all or partial royalty assets in return for lump sum investments for their organizations.

The primary reason for this increase in interest is due to companies seeking alternative investment streams now that more traditional investment channels have frozen due to the credit crisis across the globe.

The following table provides an overview of the leading recent royalty asset purchase agreements in the biopharma sector listed by headline deal value.

Figure 2: Recent leading royalty asset purchase agreements

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Source: CurrentAgreements, 2014

Royalty financing is likely to remain the preserve of licensors that hold royalty rights to marketed or close to market products.

The most active asset purchase dealmakers are shown below. Asset purchase agreements, like other deal types are popular among the big pharma or big biotech companies.

Figure 3: Most active asset purchase dealmakers 2009-2014

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Source: Current Agreements, 2014

Asset purchase is a popular method of maximizing the value of a product launched into a market.

There have been numerous high value deals announced since 2009.

Figure 4: Top asset purchase deals by value since 2009

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Source: Current Agreements, 2014

The data in this article was abstracted from the Asset purchase Partnering Terms and Agreements in Pharma, Biotech and Diagnostics report, which provides comprehensive understanding and unprecedented access to the asset purchase partnering agreements entered into by the world’s leading biopharma companies. In addition the report provides details of deals broken down by deal type, therapy focus, and company A-Z. The report provides a detailed understanding and analysis of how and why companies enter asset purchase deals - more details here.

Sources

The above information has been abstracted from the following resources:

 

Related

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