Вы находитесь на странице: 1из 1

Number of deals



DEAL WATCHNumber of deals NEWS & ANALYSIS BIOBUSINESS BRIEFS Is deal-making becoming more difficult? There has been

Is deal-making becoming more difficult?

There has been much speculation on the


perception gap between negotiating parties

impact of economic volatility and financial


that 55% of BDEs from biotechnology

stress on deal-making over the past few years. To investigate perceived and actual trends, we conducted a survey involving more than 180 business development executives (BDEs) that covered deal-making activities between 2006 and 2010, and we compared the results with data on deal-making during this period. Given that many biotechnology companies have struggled with financial problems, it might be expected that deal values would drop; indeed, the most popular response

companies who responded felt that upfront payments have dropped (compared to 31% who thought they had risen), whereas BDEs from pharmaceutical companies again largely held the opposite view; 51% felt that upfront payments had risen and 32% thought they had dropped. However, the data do not strongly support either of these perceptions. In the context of an overall collaborative deal volume that shows a slight fall between 2006 and 2010, the mean upfront deal value at the end of the

from BDEs at biotechnology companies (36% of respondents) was that licensees

5-year period is at ~95% of its 2006 starting point (FIG. 1b).We conclude that deal-making

have greater power in driving deal terms as


strongly affected by issues other than the

a result of the current environment (FIG. 1a). However, the most popular response from BDEs at pharmaceutical companies (44% of respondents) was the opposite: they felt that the current environment has increased the negotiating power of biotechnology companies in deal-making. A further sign of

recent, persisting pressures in the financial environment — in particular, it is affected by the long-standing failure of the research and development model of licensee pharmaceutical companies to produce sufficient late-stage assets, even through deal-making. Thus, on the pharmaceutical side of deal-making,












Licensor Licensee Both equally Don’t know 50 40 30 20 10 0 2006 (Q2–4) 2007
Both equally
Don’t know
2006 (Q2–4)
2007 (Q1–4)
2008 (Q1–4)
2009 (Q1–4)
2010 (Q1–4) Q1 2011

Figure 1 | Perceptions and data on deal-making. a | The percentage of responses to the four options shown in the chart for the statement:

“The current market for deals favours…” in a survey involving business development executives from pharmaceutical companies (69 responses) and biotechnology companies (59 responses), conducted to support the PharmaDeals 2011 Royalty Rate Report from PharmaVentures. b | Licensing deal numbers and mean upfront values between 2006 and 2010. Source: PharmaDeals v4, PharmaVentures’ analysis.

404 | JUNE 2011 | VOLUME 10

© 2011 Macmillan Publishers Limited. All rights reserved

major pressure to generate near-term revenue to compensate for declining sales of blockbuster drugs that have lost patent protection could lead to competition between pharmaceutical companies for high-quality assets from biotechnology companies. This could counteract weaknesses in the negotiating position of biotechnology companies owing to the recent financial environment, leading to the trends observed in the underlying data, which indicate that average upfront deal values and deal volumes have remained steady in recent years. Nevertheless, the perception gap between BDEs from the biotechnology companies and pharmaceutical companies identified in the survey suggests that deal-makers could be working harder just to stand still.

Nigel Borshell is a Director and Tibor Papp is Head of Corporate Advisory at PharmaVentures Limited, Florey House, Oxford Science Park, Oxford OX4 4GP, UK. Correspondence to N.B. e‑mail: nigel.borshell@pharmaventures.com

The authors declare no competing financial interests.