Business Concentrates INTELLECTUAL PROPERTY
Pharmaceutical dealmaking hit a peak in 2018
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Changes at drug majors include OTC division sales to focus on innovation Mergers and acquisitions in the drug industry last year brought one particularly high price tag: Takeda Pharmaceutical’s $59.0 billion acquisition of Shire. But just as interesting was how 2018’s dealmaking reflected a transformation underway among the largest companies, according to new reports by the investment firms HBM Partners and Kurmann Partners. By HBM’s count, the value of M&A in the sector topped $149 billion, nearly double the value in 2017. The average transaction value rose to $853 million last year from $505 million in 2017, more than recouping the drop from $722 million in 2016. Takeda’s Shire purchase was one of three $10 billion-plus deals last year. The others were GlaxoSmithKline’s $13.0 billion buy of Novartis’s stake in an overthe-counter (OTC) drug joint venture and Sanofi’s $11.6 billion acquisition of Bioverativ. In acquiring Shire, Japan’s Takeda seeks to globalize its business and build a bulwark against the impact of patent expirations. The deal, making Takeda one of the world’s largest drug companies, is fairly typical, as was the run of pipeline deals in 2018. Among them was Celgene’s acquisition of Juno Therapeutics, a specialist in CAR T-cell cancer therapies. The purchase set Celgene up to be bought itself. Analysts see divestitures ahead for Takeda in line with changes now underway at companies like Novartis and GSK that acted in 2018 to minimize complexity
Top ten The largest 2018 acquisitions reflect an industry in transition. BUYER Takeda
TARGET Shire
GlaxoSmith- Novartis-GSK joint Kline venture
DEAL VALUE ($ BILLIONS) $59.0 13.0
Sanofi
Bioverativ
11.6
Celgene
Juno Therapeutics
9.0 8.7
Novartis
AveXis
Sanofi
Ablynx
4.5
Procter & Gamble
Merck KGaA consumer health
4.2
CVC
Recordati (FIMEI’s 51.8% stake)
3.5
Servier
Shire oncology
2.4
Advent Zentiva (Sanofi International generics)
2.4
Source: HBM Pharma/Biotech M&A Report 2019, Kurmann Partners.
after their own acquisitions. These companies are focusing on innovative drugs with the offloading of OTC and generics businesses. GSK was the most active in reengineering last year, merging its OTC business with Pfizer’s in the waning hours of 2018 and then splitting into separate companies focused on innovative drugs and OTC products. The deal was a follow-up to GSK’s acquisition of Novartis’s stake in their OTC joint venture.—RICK MULLIN
BIG DATA
The Centre for Rapid Online Analysis of Reactions, or ROAR, has opened at Imperial College London with about $6 million in funding from the UK government, the university, and industry. Managed by Benjamin Deadman (center), the facility aims to “make the synthesis of any desired molecule as easy as dialing a number.” It will do so by automating chemical processes and accumulating data about the synthesis of new molecules. Collaborating with industry and training PhD students are part of its mandate.
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C&EN | CEN.ACS.ORG | FEBRUARY 11, 2019
Employee stole Lanxess trade secrets A court in Germany will soon begin criminal proceedings against a former Lanxess chemical engineer for stealing trade secrets and emailing them to an associate in China. According to press reports, the two planned to use the stolen plans to build a reactor in China, where they would make an unidentified chemical to compete against an identical Lanxess offering. Lanxess wouldn’t provide details on the stolen information or the employee and accomplice accused in the theft. “A group of people of Chinese origin stole company and trade secrets about an innovative product that had not yet achieved a high turnover and tried to exploit it commercially,” the firm said in a statement. The main perpetrator, according to Lanxess, is a former employee “who abused a position of trust” several years ago. Lanxess said it has not suffered any damage to its business because of the theft. According to the news service Reuters, a German labor court in Dusseldorf convicted the former employee of civil theft charges and two years ago ordered the person to pay Lanxess about $200,000. Other chemical and pharmaceutical firms also have had to confront employee theft of intellectual property. In January, Taiwan police arrested a BASF staffer and five former employees for stealing knowhow to make high-purity electronic chemicals and selling it to a Chinese firm. But Lanxess was victimized on its home turf in Germany, where such occurrences are rare. Past victims include Dow Chemical, DuPont, GlaxoSmithKline, Ineos, and WuXi AppTec.—MARC REISCH
C R E D I T: LA N X ES S ( L A N X ES S B UI LD I N G ) ; TH O MAS A N GU S / I MP E R I A L CO LL EG E LO N DO N (ROAR )
MERGERS & ACQUISITIONS
