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BIA City and Finance Update January 2018
The year started with a bang with the BIA launching its Best Practice Communications guide, the annual finance report and three events on the Gala Dinner day. The turn of the year saw a resurgence in deal-making and fundraising. January ended with major global M&A transactions with large players looking to boost pipelines with Biotech acquisitions: Celgene’s US$9bn acquisition of Juno Therapeutics and Sanofi's US$11.6bn for haemophilia drugmaker Bioverativ.
Best practice – Communications Guide
Launched early 2018, the BIA produced a new best practice guide on communicating R&D Progress for bioscience companies. The new guide addresses recent changes in the way we communicate and sets out broad best practice principles that companies should follow and provides practical advice on how to put those principles into action. The BIA will be hosting a webinar with communications experts and investors sharing their tips for promoting your company to investors on 9th March. To sign up, please click here.
Storming start for Global Bio Financing and M&A
The end of 2017 and start of 2018 saw the resurgence of financing and deal-making across the life sciences. With the continuing pressure from patent expiry and generic competition, this trend should continue. The UK is expecting to participate in this positive financing too. As highlighted by Panmure Gordon contribution to the BIA’s annual finance report, “2018 is set to be a very busy year for UK life science companies. In biopharma there are a number of important readouts, many of them late-stage, that could potentially transform valuations in UK healthcare.”
2017 ended with a ‘big bio bang’: Gilead acquired Kite Pharma for US$11.9bn, Mereo BioPharma announced its plans to IPO on NASDAQ, Fusion Antibodies delivered a £5.5m AIM IPO, and Autifony (an IP Group portfolio company) signed a potential €627.5m deal with Boehringer Ingelheim for its Kv3.1/3.2 positive modulator platform. Slightly further afield but important nonetheless, healthcare company CVS agreed to buy American insurer Aetna for US$69bn.
2018 continued the trend, with Celgene Corporation acquiring Impact Biomedicines for US$1.1bn upfront and up to US$1.25bn in contingent payments based on regulatory approval, and then following with US$9bn acquisition of Juno Therapeutics for its Car-T therapies on 22nd January. Meanwhile, in the UK, Immupharma raised £10m, Deltex £1.75m, and veterinary health business Dechra acquired AST Farma and Le Vet for a total of €340m paying for this through a combination of a £100m fundraise of existing resources and shares.
The month ended with the largest deal so far: Sanofi’s 22nd January US$11.6bn buyout of haemophilia company Bioverativ causing BioVerativ’s stock to jump 60%. Continuing its spending spree the following week, with the acquisition of Belgian biotech Ablynx for €3.9bn. Alongside this were four US IPOs in two days raising a total of US$415m: Menlo Therapeutics raised US$119m, Solid Bio US$125m, resTORbio US$85m and Armo US$86m.
What does this mean for UK biotech?
Generic expiry, data readouts in H1 and an active M&A environment means that the community should expect to see more M&A involving UK companies. At the same time, both private and public fundraisings are expected to become more active in 2018.
Jargon of the Month: Prefs
Prefs, the shorthand for preference shares, are shares that are paid out to shareholders before the common shareholders are paid.
This holds for both bankruptcy, where the preference shareholders have rights to any returns from the assets before the common shareholders, and around dividends which are often at a fixed rate and are paid to the pref holders first.
Introducing the Investor: Arix Biosciences
Unlike a number of the other investors profiled to date, like IP Group, Arix Bioscience (a new BIA member) sources, finances and builds world-class healthcare and life science businesses addressing medical innovation at all stages of development.
It has extensive experience in academic science, clinical and commercial strategy, company operations, mergers and acquisitions, venture capital and corporate finance. In addition, Arix has privileged agreements with certain universities in the UK, Europe and Australia along with a broad range of research projects from US academic institutions.
Arix invests from its resources including the £100m it raised at its 2017 IPO on the LSE Main Market. Along with Arthurian Life Sciences Ltd (ALS), it’s wholly-owned subsidiary that operates as the regulated investment manager of the Group. ALS is also the Manager of The Wales Life Sciences Investment Fund (WLSIF) and is authorised and regulated by the Financial Conduct Authority. Arix has two strategic agreements: one with to UCB and the other with Takeda.
This communication should not be regarded as investment research or marketing materials and does not constitute any recommendations to buy or sell shares.