Biotech and Pharma Deals in 2020

Biotech and pharma deals in 2020 soared to an all-time high of 1,154 signed deals with $146.3 billion in total value, defying expectations that the global Covid-19 pandemic would hamper dealmaking. Global healthcare and life sciences R&D partnership activity was up 23 percent over 2019 and total deal values rose 31 percent from the previous year, driven in part by advances in technological and molecular understandings of disease pathways, and a drive toward targeted precision medicines.

We tapped the DealForma database to look at biopharma partnering activity in 2020 in more detail.

Biopharma Deals in 2020:

• Big Pharma and Big Biotech continued to dominate the top dealmakers lists, but several mid-stage players joined the top 20 lists, including Incyte, CSL Behring, and Daiichi Sankyo for total upfront payouts, Neurocrine for total value, and Sarepta for total number of deals.
• Total upfront cash & equity was up 16.8 percent, but average upfront cash and equity fell slightly, down 3 percent compared to 2019.
• With 276 R&D partnerships focused on Covid-19, the number of infectious disease partnerships skyrocketed 572 percent over 2019, but total values of these deals fell 40 percent, even as the total paid in upfront cash and equity soared 130 percent compared to 2019.
• Biopharma mergers and acquisitions were active as well. Check out our analysis of 2020 biotech and pharma M&A here.

Biotech and Pharma Deal Terms

Biopharma R&D partnering median upfront cash and equity paid at signing soared 50 percent in 2020 compared to 2019, but average deal values dropped 3 percent during the same period.

Deals Go Earlier and Larger

Total upfront cash and equity, at $17.4 billion, rose 17 percent for biotech and pharma deals in 2020 compared to 2019. While this looks good on the surface, the money paid at signing accounted for only 11.9 percent of total potential deal values in 2020, compared to 13.4 percent of total potential deal values in 2019. So, while the numbers and potential values were strong, deals were more back-loaded with total potential deal values contingent on the achievement of milestones as licensees made riskier bets on novel platforms where they have more say on targets of interest, and early stage assets where the licensees have more control on development.

It is interesting to note that median upfront cash and equity for platform deals jumped 95 percent in 2020 compared to 2019, while it fell 33 percent for preclinical assets. Mid- and late-stage assets also commanded a premium with median upfront cash and equity up 50 percent for mid-stage asset and late-stage deals, compared to 2019.

Cancer Remains Leading Deal Target

Biotech and pharma deals in 2020 saw 379 partnerships for cancer as the top therapeutic target for dealmaking, accounting for 38.9 percent of all deals, 55 percent of total deal values, and 57.1 percent of total upfront cash and equity. We have covered this before in detail, and DealForma database users can quickly grab the latest numbers.

Neurology / CNS Deals

Indeed, 8 out of the top 12 deals in 2020 by total deal value focused on cancer as the primary therapeutic area, while 3 focused on neurologic conditions, a fast growing area of unmet need. Total deal values of neurologic partnerships made up 18.7 percent of total deal values in 2020, up 119 percent compared to 2019, with total upfront cash and equity also up 147 percent compared to 2019, in an area that has had its share of failures but that is beginning to hold promise for success with recent advances in technological innovation.

Top Biopharma Deals in 2020 by Upfront Cash & Equity