10 pictures tell you the threat of M & A of Biopharmaceutical Enterprises

[market analysis of China Pharmaceutical network] biotechnology is expensive in cancer treatment The rapid clinical development and attractive commercial returns have driven the interest of the whole industry In the first half of 2017, the total transaction volume and total transaction amount of M & A in biotechnology fell to the low level since 2013 The biopharmaceutical companies in China are not short of funds, but they all seem to be on the sidelines Towards the end of the summer of 2017, Gilead Sciences Inc purchased kite pharma and its car-t technology for us $11.9 billion, opening the window for M & A in the field of biotechnology A day later, rival Novartis' car-t therapy, kymriah (tisagenlecleucel), was approved by the US FDA as a landmark listing This acquisition and listing approval led to a sharp rise in biotechnology stocks However, the M & A activity of the whole industry is relatively quiet Except for Johnson & Johnson's US $30 billion acquisition of Swiss biotechnology actelion Co., Ltd., there are no other major transactions M & A events of biotechnology major enterprises around 2017 (billion) source: ned pagliarulo / biopharma dive according to the data of evaluate Pharma, in the first half of 2017, the total number and amount of M & A transactions in the field of biotechnology fell to the low level since 2013 The biopharmaceutical companies in China are not short of funds, but they all seem to be on the sidelines Geely's acquisition of kites may consume a lot of cash reserves, while many companies with considerable cash holdings are still standing still Cash holdings of large biopharmaceutical companies are potential M & a power * do not reflect Geely's transactions with kites (cash and short-term investment amount, billion) source: ned pagliarulo / biopharma dive, company information Delays in new drug pricing may be one of the reasons why more new deals in the industry are being prevented, as government payers become more active in demanding higher rebates and drug discounts Lower than expected profit margin may weaken the willingness of large companies to pay premium Perhaps more importantly, biotechnology is becoming more and more expensive in the area of treatment that attracts more attention Biotechnology is expensive in cancer treatment The rapid development of clinical and attractive commercial returns have driven the interest of the whole industry In 2016-2017, the transaction premium of major biopharmaceutical acquisition events exceeded US $1 billion [the transaction price exceeded the closing price (premium)%] source: ned pagliarulo / biopharma dive, market data for example, Takeda pharmaceutical company of Japan purchased ariad in January with us $24 per share Pharmaceuticals, Inc and its cancer drugs cost 75% more than the company's share price the day before "It's really hard to prove that the valuation is correct," Elias Zerhouni, Sanofi's head of research and development, said in a discussion on business development in July In 2016, Sanofi tried to acquire medivation, an expert in cancer field, and lost the open bidding war to Pfizer Pfizer bought Medivation for $81.50 a share, more than two times the price at which the takeover rumors surfaced More broadly, the NASDAQ index has risen more than 23% since the start of the year, reflecting gains in industry stocks Since January 2017, NBI has maintained an upward trend, but it is still lower than the high value (closing price per share) source in summer 2015: ned pagliarulo / biopharma dive In addition to market data, another obstacle of M & A is the concern of enterprises about the continuous uncertainty of tax reform prospect, which is a key issue for industries with tens of billions of US dollars market value "Now I believe we need to understand market value through tax reform or not," Pfizer executive Ian read said in a phone call with analysts in August In the era of immunotherapy, the industry is more interested in cancer than in immunooncology The rapid commercial success of Bristol Myers Squibb opdivo (nivolumab) and Merck keytruda (pembrolizumab) has rapidly transformed both drugs into heavyweight products Keytruda sales revenue fast catching up with opdivo (product sales, million $) source: ned pagliarulo / biopharma dive, company data In addition, three tumor immunocheckpoint inhibitors, tecentriq (atezolizumab), bavencio (avelumab) of Pfizer and Merck, and imfinzi (durvalumab) of AstraZeneca, have also joined the market competition of opdivo and keytruda Every pharmaceutical company is rapidly expanding the market share of drugs, especially in lung cancer, which has great business opportunities Merck's clinical success in the first-line treatment of lung cancer has helped keytruda quickly catch up with opdivo's overall sales Distribution of keytruda sales in non cancer categories as of Q2 2017 source: ned pagliarulo / biopharma dive, company data At the end of July, the importance of developing leading checkpoint inhibitors is gradually emerging, with AstraZeneca's imfinzi losing more than $10 billion in market value due to its failure to get the initiative through mystic research The market value of AstraZeneca has evaporated by hundreds of millions of dollars (price per share, $) due to the failure of mystic test Source: ned pagliarulo / biopharma dive Market data: cancer immunotherapy is going beyond the limit of checkpoint inhibitors to explore a wider space At present, there are hundreds of ongoing drug combination research and testing of new drug matching products Geely's acquisition of kites and kymriah's approval show the commercial development of T-cell therapy Biosimilars are beginning to threaten biological agents Although cancer treatment may be a hot field in the biopharmaceutical industry, the top drugs in the world are still a few biological agents for chronic inflammatory diseases In 2016, the sales of Humira (adamumumab), Enbrel (etanercept) and remciade (infliximab) jointly developed by Johnson and MSD in the United States exceeded $5 billion However, as each drug begins to approach its expiration date, the competition for biosimilars will quickly split the franchise for blockbuster drugs For example, Merck's REMICADE sales revenue in Europe has been weakened by several bio generics Sales of Biomimetic Drugs in Europe (million, $) source: ned pagliarulo / biopharma dive, company data as more biomimetic products are approved and listed, biopharmaceutical companies may feel frustrated But with higher development costs and greater barriers to market entry, the discounts on biologicals may look smaller than those on chemical generics In October 2016, Pfizer launched REMICADE's infleximab dyyb, which is a 15% discount on REMICADE's wholesale purchase cost (WAC) Pharmaceutical manufacturers emphasized that rebate and discount payment means that the actual price paid is lower REMICADE biopharmaceuticals are cheaper, but Johnson & Johnson has not been shaken (the price of 100mg drugs, ASP vs WAC) source: ned pagliarulo / biopharma dive, company data * renflex has no ASP available Average selling price (ASP) refers to the price reported by pharmaceutical companies to medical insurance and Medicaid service centers after deduction of kickbacks, which changes dynamically In this situation, Merck began to sell REMICADE bio generic renfelis, which it cooperated with Samsung bio Epis, at a substantial discount of 35%, further increasing the competitive threat to REMICADE's original research drug However, these lower prices may not soon translate into market share J & J expects to gradually move to cheaper products and sign contracts with payers to exclude bio generics Pfizer said in a statement on the IPO of infractra: "despite the recent price increase of Johnson & Johnson, in the field of commercial insurance, our lower priced infractra has not obtained equal rights and interests with REMICADE and is still at a disadvantage." Infractra's offer is now closer to the 20% discount on REMICADE's price Although Johnson & Johnson is a brand that breaks through the competition of many biological generic drugs, compared with other enterprises in the industry, the risk faced by Johnson & Johnson is relatively low More than half of the company's total revenue from biopharmaceuticals is threatened by bio generic drugs Roche's range of biological drugs is also about to be threatened Biopharmaceutical competition threatens the revenue of Biopharmaceutical Enterprises (risk% of the threat of biopharmaceuticals to the company's revenue) data for approved or submitted biopharmaceuticals, source: ned pagliarulo / biopharma dive Ref: industry pulse: 10 charts on M & A, I / O and biosimilar threads: original title: 10 pictures let you understand the threat of biopharmaceutical enterprise merger and acquisition, I / O and bio generic drugs Author: Kerr seizes the opportunity of pharmaceutical machinery equipment industry, please download app (Pharma, Android version)!