Euro technology RANKED: Here are the best and worst pharma deals of the past decade, and why they tanked or triumphed

Euro technology

euro technology Johnson & Johnson CEO Alex Gorsky

Johnson & Johnson CEO Alex Gorsky.
Astrid Stawiarz / CNBC

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  • Over the past 10 years, major acquisitions have reshaped the healthcare industry.
  • Analysts from SVB Leerink rounded up the five best and the five worst pharma deals of the past decade. 
  • One of the best deals was Merck acquiring Schering-Plough for $41 billion in 2009, and one of the worst deals was Johnson & Johnson’s $30 billion acquisition of Actelion in 2017, according to the Leerink analysts.
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Over the past 10 years, dealmaking has reshaped the pharmaceutical industry. 

Facing generic competition for once blockbuster drugs and new pricing threats, many a deal got done to fill in key gaps in a company’s portfolio — some more successfully than others.

Analysts at SVB Leerink rounded up the five best and the five worst acquisitions of the past decade. The list of best and worst deals is based on an analysis of all the transactions over the past decade, along with the input of the SVB Leerink therapeutics research team, and it shines some light on the often binary nature of biotech dealmaking. 

The analysts found overall that deals with a transaction value of $1 billion to $5 billion had the highest success rate, compared with lower success rates for larger transactions. The analysts note that deals within the oncology space had two times the success rate as deals in other therapeutic areas.

The best deal was Merck acquiring Schering-Plough for $41 billion in 2009, and the worst was Johnson & Johnson’s $30 billion acquisition of Actelion in 2017. The gains made by the top deals towered far over the losses of the bottom five, according to Leerink’s estimates.

euro technology Screen Shot 2src19 1src 23 at 5.11.1src PM

SVB Leerink

Read on to find out what contributed to the best and worst pharmaceutical acquisitions of the past decade. 

Euro technology THE BEST: 1. Merck’s $41 billion acquisition of Schering-Plough in 2009

euro technology FILE - This May 1, 2src18 file photo shows Merck corporate headquarters in Kenilworth, N.J. Merck & Co. reports earnings Friday, Feb. 1, 2src19. Merck & Co., Inc. reports financial results on Tuesday, July 3src, 2src19. (AP Photo/Seth Wenig, File)

Associated Press

In 2009, the pharmaceutical company Merck agreed to pay $41 billion for Schering-Plough, a US-based drug company. 

At the time, the deal was seen as a good opportunity for Merck to freshen up its drug portfolio. The merger gave it access to successful brand-name Schering products, like the prescription allergy spray Nasonex, The New York Times reported at the time of the acquisition. 

Schering also provided Merck with consumer brands like Dr. Scholl’s. The German pharmaceutical company Bayer later acquired Merck’s consumer-care business for $14 billion, taking over Dr. Scholl’s and other brands. 

Merck’s drug Keytruda, which is an oncology treatment, is the company’s top-selling drug, with $7 billion in sales worldwide in 2018.

Euro technology 2. Bristol-Myers Squibb’s $2.1 billion acquisition of Medarex in 2009

euro technology Bristol-Myers Squibb CEO Giovanni Caforio

Bristol-Myers Squibb CEO Giovanni Caforio.
AP Photo/Pablo Martinez Monsivais

In 2009, the pharma giant Bristol-Myers Squibb bought Medarex to add more drugs to its pipeline.

At the time, Medarex was developing human antibodies to be used in a wide variety of therapeutic areas, including immunology and oncology, which are now in marketed therapies.

“Medarex’s technology platform, people and pipeline provide a strong complement to our company’s biologics strategy, specifically in immuno-oncology,” James M. Cornelius, then-CEO and the current chairman at Bristol-Myers Squibb, said at the time.

In particular, the acquisition brought in-house a now blockbuster cancer-immunotherapy drug for BMS: Opdivo. The drug made BMS $6.7 billion in revenue in 2018. 

Euro technology 3. Gilead’s $11 billion acquisition of Pharmasset in 2011

euro technology John C. Martin CEO of Gilead

Former Gilead CEO John C. Martin.
REUTERS/Brendan McDermid

In 2011, the big pharmaceutical company Gilead bought Pharmasset, a clinical-stage drug company known for its antiviral drugs for HIV and hepatitis B and C. The development of various drugs allowed for Gilead to have a more diverse and expanding pipeline, and some of those treatments are now key elements of its portfolio.

“The acquisition of Pharmasset represents an important and exciting opportunity to accelerate Gilead’s effort to change the treatment paradigm for HCV-infected patients by developing all-oral regimens for the treatment of the disease regardless of viral genotypes,” John C. Martin, then the CEO of Gilead, said at the time of the acquisition

Euro technology 4. Sanofi’s $20 billion acquisition of Genzyme in 2011

euro technology Paul Hudson, Chief Executive Officer of Sanofi, poses before a meeting in Paris, France, October 1, 2src19. REUTERS/Benoit Tessier

Paul Hudson, the CEO of Sanofi.

The French drugmaker Sanofi bought the biotech Genzyme with a $20 billion cash offer. 

At the time, it was the second-biggest deal ever to happen in biotech.

Around the time of the Genzyme deal, Sanofi was losing sales of its oncology drugs to generic rivals. With the acquisition of Genzyme’s biotech drugs that treat rare disease, it was seen as a means to help fill Sanofi’s revenue gap, The Wall Street Journal reported.

Euro technology 5. AstraZeneca’s $4 billion acquisition of Acerta in 2015

euro technology AstraZeneca CEO Pascal Soriot

AstraZeneca CEO Pascal Soriot.
AP Photo/Pablo Martinez Monsivais

In 2015, the UK drugmaker AstraZeneca acquired a majority stake in Acerta Pharma, a cancer-drug developer, for $4 billion.

“The investment is consistent with our focus on long-term growth and reflects the role targeted business development plays in our business model,” AstraZeneca CEO Pascal Soriot said in a news release at the time.

Under the terms of the deal, AstraZeneca would acquire a 55 % stake in Acerta for an initial payment of $2.5 billion. It would then pay $1.5 billion when acalabrutinib, Acerta’s treatment for blood cancer, had regulatory approval in the US.

The drug was approved by the Food and Drug Administration in 2017.

Euro technology 3. Alexion’s $8.4 billion acquisition of Synageva in 2015

euro technology Alexion CEO Ludwig Hantson

Alexion CEO Ludwig Hantson.
Reuters/Lucas Jackson

Alexion bought Synageva for $8.4 billion with the hope of diversifying Alexion’s revenue with the addition of the rare-disease drugs Kanuma and Strensiq. At the time, executives at Alexion thought Kanuma in particular had the potential to be a billion-dollar drug.

Two years later, the drug had made $29 million in sales, The Street reported at the time. In 2018, the drug generated $92 million in sales — still far from the billion-dollar threshold. 

In the acquisition, Alexion touted the potential of one of Synageva’s experimental drugs, SBC-103. In 2017, Alexion decided not to keep developing the drug, putting an $85 million write-off on its fourth-quarter earnings release.

Euro technology 1. Johnson & Johnson’s $30 billion acquisition of Actelion in 2017

euro technology Alex Gorsky

Jonathan Ernst/Reuters

After weeks of deal talk, Johnson & Johnson scooped up the Swiss drugmaker Actelion in early 2017 for $30 billion. It was the largest deal in J&J’s history. 

As part of the deal, J&J picked up Actelion’s rare-disease treatments on the market and in late-stage development, opting to spin out the company’s drug-discovery operations.

In 2018, J&J halted development of an experimental antibiotic picked up in the deal

Actelion in 2018 also paid out a $360 million settlement to the US government related to allegations that it used copay-assistance programs to pay Medicare patients for taking some of its drugs.


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