2020 Deal-Making Roundup WHITEPAPER Maureen Riordan, Senior Deals Analyst, Biomedtracker Deanna Kamienski, Senior Deals Analyst, Biomedtracker Introduction Against a backdrop of unprecedented disruption, medtech market also showed a strong pandemic the biopharma and medtech industries reached influence in overall deal-making activity, in incredible heights for deal-making activity during particular featuring in vitro diagnostics for SARS- 2020. This was partly necessitated by the acute CoV-2 and companies in the digital health space. need to advance COVID-19 therapeutics and diagnostics as quickly as possible, requiring large This report provides an overview of alliance, amounts of capital and shared expertise. The merger and acquisition, and financing deal activity other driving factor was the buoyancy of capital across the worldwide biopharma, medical device, markets, as investors actively sought drug- and and in vitro diagnostics industries during 2020 as device-maker opportunities, previously thought of reported by Biomedtracker. The overall data are as defensive holdings. presented across deal types, therapy areas, and payment or financing structures. The top deals In total, biopharma companies signed over 1,000 by dollar value in each space are closely detailed. alliances in 2020, with one in five related to Note that potential deal value (PDV) is defined COVID-19 assets. $130bn was exchanged in M&A as the sum of disclosed up-front payment(s) activities in the sector, while overall financing for plus any announced or received pre- or post- the year steadily increased quarter-on-quarter for commercialization milestone payment(s). a total of over $140bn. The comparably smaller 2 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Biopharma Alliances Biopharma alliances for 2020 reached a total to quarter; except for a slight dip during Q3, the potential deal value of $186.7bn from 1,087 aggregate deal value mostly followed the same completed transactions [Figure 1]. Throughout trajectory. Of the 362 deals with disclosed values, the year, deal volume steadily increased quarter 54 topped the billion-dollar mark. Figure 1. 2020 biopharma deal volume and value distributions, by quarter 0 2 0000 2 00 22 0000 20 21 0000 200 0000 10 ea oume 20000 100 10000 0 ota ea aue (Um) 0 0 1 2 Q3 Q4 ea ota ea aue Source: Biomedtracker, February 2021 In the largest alliance of the year, Merck KGaA and commercialization. Artios originally licensed and Artios Pharma partnered in a global three- the DDR IP from Cancer Research Technology in year strategic research collaboration, worth up 2016. The Merck KGaA partnership will support to $6.9bn, to jointly identify multiple synthetic advancement of Artios’s other DDR pipeline lethal targets for up to eight oncology drug projects into the clinic, including lead programs, targets associated with DNA damage response inhibitors of Pol-theta (solid tumors) and ATR (DDR) processes [Table 1]. Artios could also (targeting cancer; in-licensed from MD Anderson see up to $860m in total milestones per target. Cancer Center and ShangPharma in 2019), which Artios has opt-in rights for joint development are specifically excluded from the collaboration. © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 3 Table 1. Top 10 2020 biopharma alliances, by potential deal value Potential Deal Royalty Licensee Licenser Products/Technologies Deal Value Date Range ($m) Artios’s nuclease-targeting discovery platform to jointly identify multiple synthetic lethal targets for precision Artios oncology drug candidates; Merck adds experience and Double- Feb. 27 Merck KGaA 6,910 Pharma resources in the field of DNA Damage Response and digits has the right to opt into exclusive development and commercialization of compounds on up to eight targets Joint development and commercialization of Daiichi’s DS- Daiichi 1062 (in Phase I for non-small cell lung cancer and triple- Jul. 27 AstraZeneca 6,000 NA Sankyo negative breast cancer) globally, excluding Japan where Daiichi retains exclusive rights Global development and commercialization (on a co- Seattle Sep. 14 Merck & Co. exclusive basis) of Seattle Genetics’ ladiratuzumab vedotin, 4,200 NA Genetics which is in Phase II for breast cancer and other solid tumors Silence’s GalNAc-siRNA platform to discover and develop High-single Silence initially five siRNA targets in cardiovascular, renal, metabolic, to low- Mar. 25 AstraZeneca 4,080 Therapeutics and respiratory diseases; AZ has option to extend to double another five targets digits Janssen contributes proprietary antigen-binding domains for up to four tumor-associated antigen targets; Fate will Double- Fate Apr. 2 Janssen Biotech apply its iPSC platform to research and preclinically develop 3,916 digits to Therapeutics new chimeric antigen receptor (CAR) NK and CAR T-cell mid-teens cancer immunotherapies Joint global development and commercialization of Genmab’s DuoBody-CD3xCD20 (epcoritamab; GEN3013), DuoHexaBody-CD37 (GEN3009), and DuoBody-CD3x5T4 (GEN1044); discovery collaboration Jun. 10 AbbVie Genmab combining Genmab’s DuoBody technology and 3,900 22–26% AbbVie’s payload and antibody-drug conjugate platform for up to four additional differentiated next- generation antibody candidates, potentially across both solid tumors and hematological malignancies Undisclosed firm gets global rights to develop and Top 10 commercialize multiple products in combination with undisclosed Jun. 24 Alteogen Alteogen’s recombinant human hyaluronidase enzyme 3,881 NA pharma ALT-B4, derived using its Hybrozyme protein engineering company technology Sage’s zuranolone (SAGE-217) for major depressive disorder, postpartum depression and other psychiatric disorders, and SAGE-324 for essential tremor and other neurological High-teens Sage Nov. 24 Biogen disorders; in the US, both firms will jointly develop and 3,125 to low- Therapeutics commercialize, while Biogen gets exclusive rights to develop twenties and commercialize the compounds outside the US, except in Japan, Taiwan, and South Korea Repare’s CRISPR-enabled genome-wide synthetic lethal Bristol Myers Repare target discovery platform, SNIPRx, to jointly identify May 26 3,065 Undisclosed Squibb Therapeutics multiple synthetic lethal precision oncology targets for drug candidates IDEAYA’s synthetic lethality programs MAT2A (IDE397), Pol High-single IDEAYA Theta (POLQ), and Werner Helicase (WRN), which have to sub-teen Jun. 16 GlaxoSmithKline 3,030 Biosciences potential applicability in lung, prostate, breast, colorectal, double- and ovarian cancer digits Source: Biomedtracker, February 2021 4 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) For 2020 overall, alliances including an announced alliance to globally develop and commercialize milestone component dominated over up-front (on a co-exclusive basis) Seattle Genetics’ payments in deal structures. This portion of ladiratuzumab vedotin, an investigational partnerships accounted for 75% of the aggregate antibody-drug conjugate (ADC) targeting LIV- deal value in those 362 deals with disclosed PDVs 1, in Phase II for breast cancer and other solid [Figure 2]. There were 41 deals in all with potential tumors. SG gets up front $600m and a $1bn future payments of more than a billion dollars, equity investment through Merck’s purchase of SG led by Merck KGaA’s December 2020 partnership common stock at $200 per share (a 32% premium) with Artios. US-headquartered Merck & Co (not to and could also see up to $2.6bn in milestone be confused with German Merck KGaA) paid the payments ($850m development, $1.75bn sales). highest up-front payment of 2020 in a September Figure 2. 2020 biopharma alliance deal breakdown, by payment type 0000 0000 0000 20000 2 12 10000 1 22 ota ea aue (Um) 000 1 4,754 7,665 5,384 0 1 2 Q3 Q4 Upfront ietone Source: Biomedtracker, February 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 5 Oncology was the most active therapeutic infectious disease (with 273 deals making up 25% area for partnering during 2020, with 386 of all of the total), and neurology/psychiatry, with 120 partnerships (36%) having at least one cancer alliances or 11% of the aggregate. asset [Figure 3]. Oncology was followed by Figure 3. 2020 biopharma alliances across therapy area, by deal volume Oncology 386 (36%) Infectious disease 273 (25%) Neurology/Psychiatry 120 (11%) Other* 100 (9%) Autoimmune/immunology 75 (7%) Not Specified 70 (6%) Ophthalmology 45 (4%) Cardiovascular 40 (4%) Endocrine 35 (3%) Metabolic 32 (3%) 0 50 100 150 200 250 300 350 400 450 Number of alliance deals (% of total) Note: Deals involving more than one asset or therapy area may be counted multiple times; cumulative percentages will therefore exceed 100%. *Includes allergy, dermatology, ENT/dental, gastroenterology, hematology, obstetrics/gynecology, orthopedics, renal, rheumatology, and urology. Source: Biomedtracker, February 2021 6 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Not surprisingly, oncology deals also made up in depression and movement disorders. Biogen the greatest percentage (49%) of aggregate also did large neuro-focused deals with Sangamo potential 2020 deal value, with $91.6bn [Figure Therapeutics ($2.7bn) for up to 12 CNS programs, 4]. Next was neurology/psychiatry, which fetched and Denali Therapeutics ($2.2bn) for Parkinson’s $36.4bn in aggregate PDV (20% of the 2020 and other neurodegenerative diseases. Deals for total). The top deal