Life sciences dealmaking in the first quarter saw considerable declines despite two high profile licensing deals, according to an analysis from law firm Morrison & Foerster.
The firm’s quarterly MoFo BioMeter newsletter reports just 16 first quarter transactions reporting upfront payments. That total is down nearly 50 percent compared to the first quarter of 2012 and it’s the lowest number in any quarter since Morrison & Foerster started tracking the deals in 2006.
Besides seeing fewer deals, Morrison & Foerster found that the deals that are getting done for less up front money. The average value for all biotech licensing transactions in the first quarter was $60 million, which is an increase compared to first quarter 2012 results.
But Morrison & Foerster attributes that increase to two outsize deals: Reckitt Benckiser’s $482 million deal to license some of Bristol-Myers Squibb’s Latin American over the counter products; and AstraZeneca’s deal to pay $240 million up front to license Cambridge, Mass. biotech Moderna Therapeutics’ drug discovery technology.
Setting aside the two largest biotech deals of the first quarter, the average value of life sciences deals for the first quarter was just $16.3 million per transaction, a slight decline compared to the same quarter a year ago. And the value of deals for compounds in phase II clinical trials fell sharply to $7.4 million, down from nearly $40 million in the first quarter of 2012.
Stephen Thau, a Morrison & Foerster life sciences partner based in Palo Alto, Calif. and editor of the MoFo BioMeter, attributes the declines to the effects of industry consolidation and tightening R&D budgets.
