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Biologic platform deals out of Europe take the lead in 2017

Posted by on 17 November 2017
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Guest Blog Post By David Thomas, CFA, Senior Director, Industry Research & Analysis, Biotechnology Innovation Organization (BIO, Washington, D.C.)

With two months yet to go in 2017, R&D-stage dealmaking is looking to finish in line with 2016 levels, both in number and in total upfront dollars, remaining below peak levels seen in 2014 and 2015.

David Thomas

Breaking down this year's list of announced deals by development phase shows a strong demand for preclinical alliances. Last year we were surprised to see an impressive spike in preclinical blockbuster deals— those with over USD 1 billion in potential value. Looking at 2017, we see this trend continuing, with 12 preclinical deals already this year. There were 15 of these blockbuster preclinical deals last year. This is quite amazing when you consider that throughout biotech’s history this number never exceed four in any year prior to 2015. In fact, when we look at all the top R&D-stage deals so far this year by potential value, the majority are preclinical, and none of them are late-stage.

A list of this year’s top R&D-stage deals shows other interesting takeaways. The first of these is the European presence. We have seen a strong representation from technologies discovered in Germany, Belgium, and Austria. Most of the companies on the list are familiar biotech names for those who have attended BIO-Europe events in recent years, perhaps pointing to some ROI from a conference perspective.

Perhaps not surprising is that over half of these deals surround immuno-oncology (I/O). What may be surprising, however, is that all of these projects involve large molecule assets, ranging from antibody and antibody-like scaffolds to RNA-based drugs such as antisense and RNAi. This is a wide range of biologic modalities, but interestingly the list excludes cell and gene therapies, which are having their own success this year on the clinical and regulatory front.

Perhaps due to the early-stage platform nature of these deals, most of the terms include multiple compounds in the overall deal structure.  However, even if we look at the deals on a per-molecule basis, these are still highly attractive deals with a median potential deal amount USD 100 million per molecule higher than the average preclinical deal seen in the last five years. This indicates that for innovative biologics, it continues to be a seller’s market.

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