Joint venture partnering is a specific type of deal whereby the parties to the deal agree to form a legal third party entity, normally under the joint control of the parties to the deal, to jointly fund and develop a compound, product or technology.
Joint venture partnerships may involve two parties collaborating to advance an asset to market where the two parties share the development risk and subsequently share in the commercialization rewards in the form of revenues either from direct marketing or licensing to a third party. Another joint venture may be formed to jointly commercialise a new or existing product in a new or existing market, with one party bringing the product expertise and the other the marketing and distribution capability.
Recent deal trends gathered from our database Current Agreements, showcases a high volume of dealmaking activity in the joint venture purchase deal type among the pharma and biotech companies worldwide.
The article here reviews the recent deal trends among life sciences companies in the joint venture deal type area.
The figure below indicates that the number of joint venture agreements announced has increased in frequency since 2009, suggesting that joint venture deals became popular since that year.
Figure 1: Joint venture partnering since 2009
Source: Current Agreements, 2014
Joint venture partnering is likely to increase in popularity as it often offers a mutually beneficial route forward to commercialization for both parties to the deal. The primary precursor for any such deal is the ability for the smaller party to bring cash and expertise to the negotiating table in order to demonstrate capability to share in the costs of development in order to subsequently participate in sharing of commercial rewards.
The following figure provides details of the top fifty joint venture deals by value announced since 2009. The list includes deals irrespective of whether the deal is pure joint venture or a multicomponent deal. In general, multicomponent deals attract the highest value.
Figure 2: Top Joint venture deals by value since 2009
Source: CurrentAgreements, 2014
The most active joint venture dealmakers are shown below. Joint venture agreements, like other deal types are popular among the big pharma or big biotech companies.
Figure 3: Most active joint venture dealmakers 2009-2014
Source: Current Agreements, 2014
One of the most successful joint ventures in the life sciences sector was TAP or Takeda – Abbott Pharmaceuticals – set up by Takeda and Abbott in order to commercialise Takeda’s products in the North American market. The joint venture was a resounding success, resulting in Takeda acquiring the joint venture company from Abbott in order to obtain its own independent presence in the market.
The data in this article was abstracted from the Global Joint Venture Partnerships in Pharma, Biotech and Diagnostics report, which provides comprehensive understanding and unprecedented access to the joint venture partnering agreements entered into by the worlds leading healthcare 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:
- Global Joint Venture Partnerships in Pharma, Biotech and Diagnostics
- Current Agreements life sciences partnering, M&A and financing deals database
Related
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