For Second Consecutive Year, Mintz, Mergermarket Publish Life Sciences M&A Report
For the second consecutive year, Mintz, in partnership with Mergermarket, has produced a comprehensive report on recent M&A activity in the life sciences industry. The new report, entitled, “United Notions: Corporate and Cultural Convergence in Life Sciences M&A 2021,” offers a look at the health of the industry and an insightful view of current trends as compared to a year ago, and during the COVID-19 pandemic, with an emphasis on post-deal integration and critical factors influencing merger success.
In order to generate the report, Mintz collaborated with Mergermarket to design and implement a targeted survey of 100 senior-level executives at companies spanning the life sciences industry, including pharmaceutical, biotechnology, medical device, and diagnostic companies, on their most recent M&A experience in the sector. Conducted in the first quarter of 2021, survey responses represent both buy-side and sell-side transactions. The report also presents data on deal volume and valuation of life sciences mergers from 2016 through Q1 2021, and has a significant foreign component through its data on cross-border transactions.
“We are pleased to have again partnered with Mergermarket to produce this report and share key findings on dealmaking trends in life sciences, particularly in response to COVID-19,” said Mintz Member and Co-chair of the firm’s Life Sciences Practice Bill Whelan. “With a strong M&A outlook for the remainder of 2021, clients and industry stakeholders may utilize the extensive data and executive sentiment showcased in this report to inform their approach to getting deals done and managing a successful post-merger integration.”
“We are excited to share this latest report on life sciences dealmaking which highlights some very interesting trends as we emerge from the pandemic,” said Mintz Member Joshua Fox. “As with last year’s report, we hope ‘United Notions’ is of interest and beneficial for our readers, including clients and colleagues, as they engage in transactions of all sizes.”
Key findings from the report include:
- Deal drivers:
- Over half (60%) of respondents believe that the Biden-Harris administration will be favorable for life sciences dealmaking, including 35% who say it will be very favorable.
- This year, the top rationale for buyers’ most recent M&A transaction is to add to or improve their R&D pipeline, rather than a concern over patent expirations.
- Over half (60%) of respondents believe that the Biden-Harris administration will be favorable for life sciences dealmaking, including 35% who say it will be very favorable.
- Targets, pricing, and structure:
- Reflective of the intensity of competition around life sciences assets in today’s market, and a significant increase from last year, nearly two-thirds of sellers (64%) received more than their targeted sales price for their business, including 18% that received over 20% more than expected.
- Respondents eyed alternatives including the special purpose acquisition company (SPAC) market for opportunities.
- Reflective of the intensity of competition around life sciences assets in today’s market, and a significant increase from last year, nearly two-thirds of sellers (64%) received more than their targeted sales price for their business, including 18% that received over 20% more than expected.
- Post-merger integration:
- 48% of respondents say that complete integration into the buyer’s business was the strategy chosen for the deal. This is up significantly from last year, when just 25% said this.
- There is evidence that retention of employees should be a higher priority: 57% of respondents said that post-merger leadership departures were for preventable reasons.
- 48% of respondents say that complete integration into the buyer’s business was the strategy chosen for the deal. This is up significantly from last year, when just 25% said this.
Mintz is a leading life sciences law firm with more than 200 professionals representing therapeutics, vaccine, medical device and systems, research tools and diagnostics companies, as well as investment banks, venture capital firms, and other investors. The firm’s work for these clients encompasses transactional, health care regulatory, intellectual property, litigation, employment, tax, real estate, and other matters. Mintz attorneys are embedded in the global life sciences ecosystem and provide industry leaders with practical solutions to business-critical challenges, helping them achieve their strategic and business goals. Learn more about Mintz’s Life Sciences Practice here.
For additional life sciences M&A insights from recent activity, please click here to access Mintz and Mergermarket’s report, “United Notions: Corporate and Cultural Convergence in Life Sciences M&A 2021.”