Acquirer:

US Mid-cap pharmaceutical company

Acquired:

US small-cap private pharmaceutical company

Product:

Small molecule clinical phase III-ready in Western markets + different program towards similar target in different indications, R&D capabilities

Therap. Area:

Oncology/Hematology

Situation:

The US mid-cap pharmaceutical company was looking for a company transforming licensing/BD&L transaction in order to complement its one launched product “pipeline”.

Objectives:

Find a clinical late stage program that fits with the company’s strategy, therapeutic area expertise and capabilities.

Activities:

The whole clinical landscape of oncology/hematology programs (1,400+) were analyzed and prioritized. Several late stage clinical and launched programs were evaluated as for their business potential and availability for partnering. A shortlist of 10 was reduced to a hot list of five, of which programs have been subjected to Due Diligence. What started as a product licensing attempt was quickly transformed into a whole company acquisition initially driven by the sell side. An in depth DD of electronic data and a one week onsite Diligence of source data and capabilities was conducted. A well structured (payouts to the owners based on defined success milestones) M&A deal was negotiated and fully executed within three months’ time.

Results:

• A structured M&A deal was executed. The acquired party accepted well defined performance clauses and milestones for payout driven by identified risks and mitigation strategies.
• The integration of the acquired company was conducted as planned and finalized within 9 months.
• Acquiring company .out-licensed Japanese rights to the late stage program for non-dilutive financing.
• The late stage program has been approved by the US-FDA, the EMEA and is generating sales as projected.
• Following the acquisition The licensor company has appreciated by more than 4x and got acquired by a big biotech company at a >45% premium despite the fact that the meanwhile launched lead program was encumbered with 3rd party royalties and obligations (Japanese rights).