Syneos Health Consulting Releases 10th Annual Biopharmaceutical Dealmakers Survey – Predicts M&A Landscape to Continue Bull...
June 05 2018 - 3:00PM
The tenth annual Dealmakers’ Intentions Study from Syneos Health
Consulting, an industry-leading consulting firm specializing in the
biopharmaceutical industry, concludes that the dealmaking
environment will continue to accelerate with buyers becoming more
selective in ensuring they have the most appropriate assets and
corresponding deals in place.
The study, which was released during a Super
Session at the BIO International Convention in Boston,
Massachusetts, provides a review of biopharmaceutical dealmakers’
intentions around licensing and acquisitions for the next twelve
months and identifies areas of greatest opportunity for buyers and
sellers. The 10th edition of the study also follows persistent
trends that have shaped the past decade of dealmaking. Download the
full 2018 Dealmakers' Intentions Study.
“Large-cap consolidations may still be in the
offering, but the distinguishing trend of the last decade is the
growth in emerging companies and the new financing options
available to them,” said Neel Patel, Managing Director, Commercial
Strategy & Planning at Syneos Health Consulting (previously INC
Research/inVentiv Health Consulting). “We predict 2018 will follow
suit, with emerging companies having many cards to play as long as
they focus on clearly demonstrating value-based product
differentiation while avoiding common dealmaking pitfalls.”
Key findings include:
M&A Landscape Continues Bullish Run…
- M&A-driven dealmaking is on track to be the second highest
of the decade, but will still represent only about 60 percent of
the record levels seen in 2015.
- While IPO volume activity is expected to be moderate to low,
significantly below the trends of the last five years, venture
financing is witnessing a bull market run that started in
2014.
- Accelerated dealmaking is an indication not just of money
flooding the system, but as a result of tax reform in the U.S. and
the expected repatriation of significant funds from overseas. It
also reflects a thirst for innovation as companies seek to
replenish depleted pipelines, strengthen their positions in
targeted therapeutic areas and race to stay ahead of the technology
curve.
….While Buyers Seem to Become a Bit More Risk
Averse
- Buyers are expecting an increase in licensing/partnering deals,
despite strong cash positions which indicates they are expecting
sellers to offset some of the risk.
- The dealmaking environment is becoming increasingly
competitive. Buyers are continuing to show a strong interest in
late stage assets, while sellers seem more invested in seeing
pre-clinical assets through to Phase I and II before making a
deal.
- The overall deal conversion rate for 2017, at 1.9 percent, was
much lower than previous years due to an increase in the number of
screened assets, an increase in the number of buyers and lower
conversion rates at later stages of a deal.
Robust Investor Appetite Fuels New Company
Formation
- Based on Q1 2018 numbers, 2018 venture financing is on pace to
reach $10-11 billion, putting it just behind the unprecedented ~$12
billion peak in 2017.
- In particular, Series A financing stands out and is expected to
see over 80 percent growth in 2018.
- A large increase in Series D+ indicates that many companies are
opting to stay private longer to avoid an IPO and to deliver their
pipeline to more meaningful value inflection points, or
commercialize assets themselves.
Supply and Demand Imbalance Indicate Areas for
Assessment
- Oncology has become a much more attractive, opportunistic
market for buyers since 2017, suggesting that premiums in the
oncology space could start seeing a potential decline in the coming
year for products that are not highly differentiated.
- Other areas with a supply surplus include infectious disease
(both antiviral and antibiotic) and the CNS/psychiatric space.
- Therapeutic areas showing a demand surplus include hematology,
respiratory, pulmonology and renal.
- CART –T cell therapy and CRISPR/Cas9 continue to be among the
hottest areas for licensing, but interest in immuno-oncology and
microbiomes has increased considerably since 2017.
Learn more:
- Submit a request to have a Syneos Health Consulting team member
present survey results and implications for your business.
- Review a decade of biopharmaceutical dealmaking with the
authors: Subscribe to the Syneos Health podcast where the authors
behind the 2018 study will share insights and trends from the last
ten years of the annual Dealmakers’ Intentions Surveys. Discussions
include peaks and valleys in dealmaking activity, the therapeutic
areas that have fallen in and out of favor along with pace of
innovation and the next “hot spot” with commercial value.
About Syneos Health
ConsultingSyneos Health Consulting is an industry-leading
consulting firm specializing in the biopharmaceutical industry and
part of Syneos Health, the only fully integrated biopharmaceutical
solutions organization. We provide services across a comprehensive
range of key areas, including commercial strategy and planning,
medical affairs, risk and program management and pricing and market
access. Recognized by Forbes magazine as one of America’s Best
Management Consulting Firms for three years running, our industry
focus and depth of functional expertise, combined with strong
scientific and market knowledge, uniquely position us to tackle
highly complex business and market challenges to develop actionable
strategies for our clients. For more information, please visit
syneoshealth.com/solutions/consulting.
Contact: Investor Relations
Contact:
Press/Media Contact: Ronnie
Speight
Danielle DeForgeVice
President, Investor Relations
Senior Director, External Communications +1
919 745 2745
+1 202 210
5992Investor.Relations@syneoshealth.com
danielle.deforge@syneoshealth.com
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