Q1 2018 Trends in Biopharma Transactions Report

 

Locust Walk is a global transaction firm serving biopharma and medtech companies in the US, Europe, and Asia.

Each quarter, Locust Walk deal team members compile key statistics and trends on strategic transactions and financings. Our Q1 2018 Trends in Biopharma Transactions report applies the latest data to analyze current activities in the life science deal landscape.

In this quarter’s report you can find an overview and analysis of the following across the US, Europe, Japan, and China:

  • Key performance indicators for the biopharma market
  • IPO and private financing activity and performance
  • Deal activity for strategic partnerships and M&A
   
 Here’s a summary of key findings:
 In the US
  •  2018 public markets were impacted by macro-level volatility as record level private financing continued and suppressed strategic deal volume
  •  Public biopharma market performance mirrored major indices and was negatively impacted by macro volatility; biopharma IPOs consequently underperformed
  •  After a record year for private financing in 2017, this trend has continued, accelerated and has had a noticeable impact on IPO and strategic deal markets
  • Licensing and M&A volume remain low, but ‘mega’ deals have put 2018 aggregate value on pace to quickly surpass previous years
In Europe
  • EU VC investment in 2018 has been fast paced, generating nearly 50% of 2017 aggregate value already, and is on track to surpass total deals seen in 2017
  • 3 IPOs closed, most notably, large German generics player, Dermapharm, raising a total of $466M
  • Despite concerns that EU companies would become less desirable targets compared to US biotechs, due to the recent change in US tax law, EU M&A activity has kept up its torrid pace with Sanofi’s $4.7B acquisition of hematology-focused Ablynx
  • Lack of blockbuster EU licensing deals led to quiet quarter
In Japan
  • Stock prices have been volatile since the beginning of 2018, substantially effected by volatility in the US, as shares of the top 40 Japanese biotech/biopharma companies were up 11.4% in Q1 2018
  • Japanese strategic deals started off 2018 well with 29 licensing/M&A deals announced in Q1

In China

  • China’s top 20 biopharma companies (+6.8%) have outperformed the SSE Composite Index (-5.4%) in Q1
  • IPOs are scarce in 2018 as companies must demonstrate strong and continuous revenue generation ability to obtain approval
  • In-license deal volume continues to grow with 13 completed transactions in Q1
  • Chinese investors continue to actively invest in both foreign and domestic life science companies
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