The PMB sector negotiation enjoyed an impressive start as companies around the world began their post-pandemic recovery
The global pharmaceutical, medical and biotechnology (PMB) sector recorded US $ 95.4 billion in activity during the first quarter, nearly three times the $ 33 billion in bids announced in the first quarter of 2020. Meanwhile, the volume of transactions increased 28% year-on-year, 466 offers were announced.
This strong activity is maintained by the momentum generated by the activity of the operation in 2H 2020, reversing the steady decline of 2019. Although initially it was hard hit by the global pandemic, the negotiation of the PMB sector went experience an impressive rise throughout 2020. The value of the global agreement within the sector tripled more than the US $ 66.4 billion in the first half of the year to US $ 220.2 billion. second, while volume increased by 28% in the same period of time.
The value of the American supply exceeds the tables
The United States continued to account for most of the business activity in the sector, both in terms of value and volume. The total value of quarterly operations of 53.5 billion US dollars was more than three times the value of 15.9 billion dollars in the first quarter of 2020, while the 201 operations carried out remained relatively stable year after year, decreasing only in three.
The largest bid of the quarter saw Ireland-based clinical trials group ICON agree to acquire PRA Health Sciences, a rival US contract research organization (CRO), for US $ 11.5 billion.
“COVID-19 created a platform for change that we cannot ignore,” Colin Shannon, head of the PRA presidency, said after the deal. Demand for decentralized and hybrid testing solutions grew amid the pandemic, with both companies now focusing on non-technology and technology-free trials, such as laptops. The agreement may favor a new consolidation among CROs, as they aim to meet this growing market demand.
Another deal that saw an Irish company target a US healthcare company was the US $ 2.5 billion acquisition by Horizon Pharma of Viela Bio, a UK-based AstraZeneca-based company. . Horizon focuses on developing treatments for rare and rheumatic diseases. The agreement, completed in March, adds three drugs in the clinical phase aimed at inflammatory and autoimmune diseases to its R&D pipeline.
SPACs increase the value of the deal in the United States
An increase in the activity of Special Purpose Acquisition Companies (SPACs) helped increase the value of the deal in the United States. In the first quarter alone, there were four such offers worth $ 1 billion or more in the healthcare sector, all aimed at U.S.-based companies.
The largest of these agreements was the merger between US-listed SPAC VG Acquisition Corp., owned by business tycoon Richard Branson, and the launch of U.S.-based genetic testing 23andMe. Following the completion of the US $ 3.6 billion deal, the Silicon Valley-based company will be listed on the New York Stock Exchange (NYSE).
The deal also involved PIPE (private equity investment): a group of investors, including Branson, Fidelity Management and 23andMe co-founder Anne Wojcicki, announced they would invest $ 250 million in the merged company.
Another significant SPAC deal for the quarter was the merger between SPAC Fortress Value Acquisition Corp. II listed in the US and ATI Physical Therapy based in the US, in a deal valued at US $ 1.5 billion. ATI, backed by PE Advent International, is the largest outpatient physical therapy provider in the US. It is reportedly planning to use cash revenues of up to US $ 645 million to pay off existing debt and finance growth through acquisitions. The deal will also involve $ 300 million in PIPE investments by Fortress Investment, Wells Capital Management, Weiss Asset Management and Monashee Capital Partners.
The United Kingdom leads European activity
Western Europe attracted 141 bids in the first quarter, an increase of 27 bids compared to the first quarter of 2020. Meanwhile, the value of the transaction doubled year-on-year to US $ 29.6 billion in the first quarter.
The UK attracted the most activity, with 37 bids worth US $ 21.9 billion changing hands in the first quarter, the highest of any quarter, both in value and volume, in the Mergermarket record (since 2006 ). The UK hosted the highest-rated European deal for the quarter: the US $ 6.5 billion purchase of AmeriSourceBergen by US pharmaceutical wholesaler Alliance Healthcare from Walgreens ’European wholesale distribution business.
France was the second most targeted country in the region, with a total of 13 operations valued at US $ 2.6 billion announced during the first quarter. The most valuable deal was the sale of Cooper Consumer Health by Charterhouse Capital for $ 2.4 billion to a consortium led by CVC Capital Partners. Cooper Consumer produces over-the-counter (OTC) treatments, such as creams, aerosols, and nutritional supplements. Demand for these products has risen amid the COVID-19 pandemic.
The outbreak of commercial activity during the first quarter of 2021 consolidates the recovery of commercial activity in the sector that was experienced at the end of 2020. The healthcare industry will play a key role in the global recovery from the COVID- pandemic. 19, with emerging innovative technologies. to address changing behaviors, consumer-driven demand, and growing pressures on healthcare systems around the world. Future companies will continue to attract investment throughout the year as investors gain value to meet the needs of a post-pandemic global society.