Campbell Alliance Survey Of Biopharmaceutical Dealmakers Suggests 2015 Will Set A New Record For M&A Licensing
Annual Dealmakers Report Released at 2015 BIO International Convention Captures Expectations from Buyers and Sellers of Biopharmaceutical Assets and Highlights Key Opportunities
PHILADELPHIA, June 18, 2015 /PRNewswire/ -- A survey of biopharmaceutical dealmakers by Campbell Alliance, the consulting firm of inVentiv Health, suggests that 2015 will set a new record for mergers and acquisitions and licensing of biopharmaceutical assets. The survey also revealed early signs of a potential slow-down in licensing of assets.
This is the seventh year that Campbell Alliance has surveyed dealmakers to provide a forward-looking glimpse of what the rest of the year will hold and identify areas of greatest opportunities for buyers and sellers. A report on the survey was released during a Super Session today at the BIO International Convention in Philadelphia, "Riding the Bull Market: What's in Store for Biotech Dealmakers in 2015?"
"The level of dealmaking activity last year was the highest it has been since 2009 and activity in 2015 is set to surpass it," said Neel Patel, Vice President, Campbell Alliance. "But this time, M&A activity is being fueled by small and mid-cap biopharma buyers, who are flush with cash. And the details of what we found across the sector should be of interest to anyone evaluating buying or selling an asset in 2015."
Patel said buyers find themselves in a highly competitive environment while sellers benefit from well capitalized buyers and more options than in the past.
"The message for sellers is that the market continues to create options," said Patel, who moderated the BIO Super Session. "Sellers are able to retain assets longer as a result of the better financing environment, the emergence of 'new' buyers and options to commercialize through specialty indications and contract commercial services."
He said that buyers face a tough environment marked by increased competition for assets and the need to negotiate with sellers who have options. To access the assets they want, buyers may need to position themselves more aggressively through M&A with earn-outs or outright acquisitions versus licensing. Patel said the window of robust financing (cheap debt and access to public equity), tax inversions and pricing power may close over time.
The survey also found:
- The record pace of acquisitions and financing has continued into 2015, but there are early signals of a potential slowdown in traditional licensing.
- Acquisitions with earn-outs can substitute for traditional licensing.
- Greater financing options are available to emerging companies who can reasonably "go it alone."
- The narrowed discount rate gap to historic norms has removed a temporary bridge between optimistic sellers and pessimistic buyers.
- A seller's market exists for phase III CNS, preclinical and phase III oncology and phase III women's health assets.
- A buyer's market exists for preclinical respiratory, women's health and ophthalmology assets.
- Hot areas/technologies of interest are largely linked with oncology as buyer demand within the therapeutic area remains high.
- High-interest, oncology-related technology includes cancer vaccines, antibody drug conjugates, personalized medicine and immuno-oncology.
- Innovation has gravitated toward oncology where pricing and access risk is relatively low. Trial costs and length similarly are low versus other therapeutic areas.
- The conversion rate for deals has steadily increased over the past few years, which is a reflection of the robust dealmaking environment. This dealmaking environment has created bandwidth constraints in the evaluation of deals for buyers.
Additional information about Dealmakers' Intentions 2015, including access to a white paper summary of the results, is available here: inVentivHealth.com/CampbellAlliance/Dealmakers.
About Campbell Alliance
Campbell Alliance is the Consulting firm of inVentiv Health and an industry leader in biopharmaceutical consulting. The firm's clients include all of the world's top 20 pharmaceutical companies, as well as numerous emerging and midsize firms. Campbell Alliance is organized into five Practice Areas – Commercial Excellence, Commercial Strategy, Market Access, Medical and Corporate Development – each of which offers a range of services to a critical area of the pharmaceutical and biotechnology industries. Each Practice Areas has a dedicated consulting team whose members are highly specialized and offer deep expertise in their chosen areas. From its 13 office locations, the firm serves clients throughout North America, Europe and Asia.
For more information on Campbell Alliance, please visit inVentivHealth.com/CampbellAlliance.
About inVentiv Health
inVentiv Health is a top-tier professional services organization that accelerates the clinical and commercial success of biopharmaceutical companies worldwide. Our combined Clinical Research Organization (CRO) and Contract Commercial Organization (CCO) helps clients improve their performance to deliver much-needed therapies to market. With 13,000 employees providing services to clients in 70 countries, inVentiv Health designs best practices, processes and systems to enable clients to successfully navigate an increasingly complex environment. inVentiv Health, Inc. is privately owned by inVentiv Group Holdings, Inc., an organization sponsored by affiliates of Thomas H. Lee Partners, L.P., Liberty Lane Partners and members of the inVentiv Health management team.
For more information, visit inVentivHealth.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our performance to differ materially. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. Such factors include, without limitation: the impact of our substantial level of indebtedness on our ability to generate sufficient cash to fulfill our obligations under our existing debt instruments or our ability to incur additional indebtedness; the impact of customer project delays, cancellations and terminations and our ability to sufficiently increase our revenues and manage expenses and capital expenditures to permit us to fund our operations; the impact of any future acquisitions; the impact of any change in our current credit ratings or the ratings of our debt securities on our relationships with customers, vendors and other third parties; the impact of any additional leverage we may incur on our ratings and the ratings of our debt securities; our ability to continue to comply with the covenants and terms of our debt instruments and to access sufficient capital under our credit agreement or from other sources of debt or equity financing to fund our operations; the impact of any default by any of our credit providers; our ability to accurately forecast costs to be incurred in providing services under fixed price contracts; our ability to accurately forecast insurance claims within our self- insured programs; the potential impact on pharmaceutical manufacturers, including pricing pressures, from healthcare reform initiatives or from changes in the reimbursement policies of third-party payers; our ability to grow our existing client relationships, obtain new clients and cross-sell our services; the potential impact of financial, economic, political and other risks, including interest rate and exchange rate risks, related to conducting business internationally; our ability to successfully operate new lines of business; our ability to manage our infrastructure and resources to support our growth, including through outsourced service providers; our ability to successfully identify new businesses to acquire, conclude acquisition negotiations and integrate the acquired businesses into our operations, and achieve the resulting synergies; any disruptions, impairments, or malfunctions affecting software as well as excessive costs or delays that may adversely impact our continued investment in and development of software; the potential impact of government regulation on us and on our clients; our ability to comply with all applicable laws as well as our ability to successfully adapt to any changes in applicable laws on a timely and cost effective basis; our ability to recruit, motivate and retain qualified personnel; the impact of impairment of goodwill and intangible assets and the factors leading to such impairments; consolidation in the pharmaceutical industry; changes in trends in the healthcare and pharmaceutical industries or in pharmaceutical outsourcing, including initiatives by our clients to perform services we offer internally; our ability to convert backlog into revenue; the potential liability associated with injury to clinical trial participants; the impact of the adoption of certain accounting standards; and our ability to maintain technological advantages in a variety of functional areas, including sales force automation, electronic claims surveillance and patient compliance. Holders of our debt instruments are referred to reports provided to investors from time to time and the offering memoranda provided in connection with the issuance of our notes for further discussion of these risks and other factors.
SOURCE inVentiv Health, Inc.
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