Pharma's top 10 M&A deals of 2013

All things being relative, 2013 was a pretty good year for M&A in pharma. There were 169 deals valued at $76 billion last year, according to the information ninjas who dice the numbers at EvaluatePharma. That was a 15% jump in the number of deals and a 33% increase in the dollars spent compared to 2012. Analysts had expected as much from 2013, however, because 2012 was the low point for M&A in many years.

Even with the upward trend, 2013 pales compared to the halcyon years from 2008 to 2010. Of course, the monster dollars of those years, which you can see in the chart, often came from one or two big deals. Roche ($RHHBY) paid $46 billion for Genentech in 2009. Then in the record year of 2010, Pfizer ($PFE) bought Wyeth for $68 billion, and Merck ($MRK) bought Schering-Plough for $41 billion. Finally, in 2011, Novartis ($NVS) snatched Alcon for $37 billion. By comparison, the biggest deal in 2013 was a third that size, and then it was pulled off by a big biotech. Amgen ($AMGN) bought Onyx for $10.4 billion.

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Big Pharma, in fact, was pretty much absent from the M&A table last year, EvaluatePharma noted in its 2013 review. Big Pharma now seems to prefer collaborative relationships with potential targets over committing a boatload of dollars at one time. Still, the information firm said, "the average deal value reached $708m last year, the highest since pre-crash levels, while the average sales multiple paid climbed for the third year in a row."

Only the Amgen/Onyx deal breached the $10 billion mark, while the next three were at least $8.5 billion. After that the numbers fall off dramatically, with the number 5 deal reaching only $4.325 billion. That was AstraZeneca's ($AZN) buyout of the Bristol-Myers Squibb ($BMY) share of their diabetes partnership. The top 10 list closes out at only $1.150 billion, with another AstraZeneca deal: its buyout of biotech Pearl Therapeutics.

Some of the players whose outlays qualified them in the top 10 were not your usual suspects. Top OTC player Perrigo, with its $8.6 billion deal for Ireland-based Elan ($ELN), was one. Specialty drugmaker Salix Pharmaceuticals, which nabbed Santarus for $2.6 billion, was another. In fact, EvaluatePharma pointed out that, the valuations being what they were for biotechs, specialty drug companies and generics seem to be where much of the action is.

Please read the following report and then drop us a line about any insights it sparked, or better yet, leave a comment so everyone can savor.

-- Eric Palmer (email | Twitter) | Carly Helfand (email | Twitter)


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