| Foreign | Local News | march , 2021 | The Health
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Boom times for pharma M & A
Global mergers and acquisitions ( M & A ) activity last year was expected to decline from 2019 levels , mainly due to the Covid-19 pandemic and resulting uncertainty around the global economy , trade tensions between the US and China , and the presidential election in the US .
However , James Baillieu from Bird & Bird reveals that this was not the case in pharma . Here , he shares the biggest deal trends in the sector and what is on the horizon for the coming year .
The life sciences industry has been instrumental in the response to the Covid-19 pandemic , with key industry players including Pfizer / BioNTech , AstraZeneca / Oxford University and Moderna racing to develop vaccines , and others developing antibody tests and other treatments .
Given the severe impact of the pandemic , you would be forgiven for thinking that M & A activity in the sector may have ground to a halt in 2020 . However , while deal activity temporarily slowed as the pandemic took hold , there was a swift and robust resumption of M & A activity after dealmakers became confident working remotely . This is perhaps not as surprising as it first seems because the drivers behind pharma M & A still apply . Long-term demand for healthcare continues to rise , driven by ageing populations and chronic disease in the West , as well as increasing demand resulting from higher incomes in the East .
Against this backdrop of increasing demand and rapid technological innovation , biopharma companies must continually replenish their R & D pipelines as patents on their most profitable products expire and generic competition impacts revenues .
If you dig behind the headlines , it is easy to spot a few key trends in the sector .
Disruption and the rise of tech
For years now , there has been a proliferation of “ healthtech ” companies and big pharma has grappled with the disruption caused by big tech and data . This has led to a blurring of industry lines , with pharma companies buying tech companies to digitalise their offerings and big tech companies breaking into the healthcare market .
AI and machine learning are disrupting traditional drug development by accelerating tasks such as drug discovery , clinical trials and data analysis . Improved software and apps , as well as improvements in internet speed and connectivity , have enabled the delivery of medical care from home and the development of services that ‘ wrap around ’ the care being provided to patients .
The next round of mega mergers Mega mergers enable big pharma to bolster their portfolios and diversify into more profitable and higher growth areas ( such as rare diseases ) while driving economies of scale and reducing costs . The pharma sector has seen its fair share of mega mergers over the years : think Merck / Schering Plough , Pfizer / Wyeth or Glaxo Wellcome / Smithkline Beecham in years gone by and more recently Bristol-Myers Squibb / Celgene and AbbVie / Allergan , to name just a few .
The post-pandemic wave of mega mergers has perhaps already kicked off with AstraZeneca ’ s announcement in mid-December that it will acquire US rare disease specialist Alexion for $ 39 billion .
Bolt-ons and divestitures
Mega mergers enable big pharma to bolster their portfolios and diversify into more profitable and higher growth areas ( such as rare diseases ) while driving economies of scale and reducing costs ”. Big pharma continues to make ‘ bolt-on ’ acquisitions , especially in attractive areas like cell and gene therapy , oncology and nextgeneration biologics . These relatively modest acquisitions help big pharma replenish their drug pipelines while allowing early-stage R & D to be undertaken off balance sheet . In recent years , competition between big pharma companies for the hottest emerging companies has pushed up valuations .
Increased regulatory scrutiny of deals
While deals continue apace , executing them is becoming more complex . Several countries have long-standing investment screening regimes , such as the Committee on Foreign Investment in the United States ( CFIUS ), which has been in place since 1975 . There has been a general trend over the last few years towards strengthening controls over foreign investments and acquisitions , which following the Covid-19 pandemic has also come to include companies operating in the life sciences and healthcare sectors .
The increased scrutiny of deals around the world – including those in life sciences and related sectors – will make foreign investment rules an increasingly important consideration for acquirors and investors undertaking crossborder deals .
Outlook
The arrival of Covid-19 vaccines in late 2020 shows that there is light at the end of the pandemic tunnel , although it will inevitably take some time for populations to be vaccinated and some sense of normality to return . That said , with confidence returning and pharma companies still needing to replenish their drug pipelines while dealing with the digitalisation of healthcare , one thing is certain : 2021 will be a busy year for pharma dealmakers .
Briefs
Ava gets FDA Clearance for fertility tracker
Ava , a digital healthcare company focused on women ’ s reproductive health said it has received FDA clearance for its Ava Fertility Tracker , making it the first and only FDA-cleared fertility tracking wearable .
A fertility tracking sensor bracelet and accompanying app , Ava Fertility Tracker is already the first and only wearable , machine learning device to aid women in ovulation prediction and facilitation of conception . The device was successfully certified under the new European Device Regulation ( MDR ). Now , backed by the FDA clearance of its 501 ( k ) application , Ava can also point to the efficacy of the Ava Fertility Tracker as comparable to time-trusted methods .
“ The FDA clearance validates Ava ’ s efficacy as comparable or superior to standard products found in every pharmacy ,” explains Ava Chief Medical Officer Maureen Cronin .
Global fight against antibiotic resistance
SuperTrans Medical ( STM ), a biopharmaceutical company developing novel antibiotics that target difficult-to-treat , multi-drug resistant bacteria , has published First-In-Class , successful pre-clinical results and announced plans to begin clinical trials in Australia later this year for its lead candidate STM- 001 .
Offering new hope in the plight against antimicrobial resistance ( AMR ), STM has applied its patented permeator technology to the widely used antibiotic vancomycin through a process of “ intelligent repurposing ”.
“ Antibiotic-resistant infections are a serious threat to global health and with only four new classes of antibiotics introduced since the early 1960s , clinicians just don ’ t have enough to work with . With the highly promising safety and efficacy results we ’ ve seen with our approach to date , we believe that STM-001 , as a repurposed antibiotic could bring a much-needed new option forward to combat these urgent threats ,” said Dr Lewis Neville , CEO , SuperTrans Medical .
Solution preventing leg amputations
Osteopore International , a Singapore homegrown company that specialises in 3D printed bioresorbable implants , in collaboration with Maastricht University Medical Centre ( UMC +), has successfully developed a bioresorbable 3D printed cage that prevents leg amputations in patients with severe lower leg fractures . The 3D printed cage helps a patient regenerate new bone cells and has been successfully designed and implanted in its first patient in the Netherlands .
Manufactured in Singapore , and developed with Osteopore ’ s proprietary 3D printing and materials technology , the 3D printed cage is made of biodegradable material and is customised based upon a computed tomography ( CT ) scan of the patient ’ s lower leg . This 3D printed cage stimulates the patient ’ s new bone cells to grow within it , eventually breaks down into water and carbon dioxide and is replaced by the patient ’ s own regrown bone tissue
Orpha Labs initiates compassionate use programme
Orpha Labs AG announced its compassionate use program to make ORL-101 available to physicians providing care for Leukocyte Adhesion Deficiency Type II ( LAD-II ) patients . ORL-101 is a novel formulation of an ultra-pure L-fucose currently in development for the treatment of LAD II patients .
Orpha Labs ’ Founder and Chief Executive Officer Alp Bugra Basat , MD , said , “ We are proud to announce this development . ORL-101 is the first product authorized for compassionate use in a program for LAD-II patients , an important step in our work to bring products into clinical development to help patients with ultra-rare disorders .”