First quarter 2023 R&D partnerships for biopharma therapeutics and platforms followed very similar trends from 2022 with continued declines in venture investment and dealmaking. One area that did pick up slightly in the total Q1 2023 numbers was biopharma M&A, mainly driven by early January acquisition activity and Pfizer/Seagen. Licensing showed a slight quarterly uptick for the number of deals signed as well.
Throughout 2022, the number of R&D partnerships for biopharma therapeutic and platforms increased, with the highest number in Q4 (136) and the highest deal value in Q4 ($50.9B). In Q1 2023, deal activity decreased slightly from Q4 2022 but remained high at 144, with a lower total deal value of $34.3B. Over five quarters, there were 675 R&D partnerships with a total deal value of $179.5B.
The biopharma therapeutic and platforms subsector had 144 deals in Q1 2023, but the upfront cash and equity decreased to $2.0 billion. The number of deals was relatively stable throughout 2022, with Q1 having the highest number at 147. Upfront cash and equity slightly increased from Q1 to Q2, decreased in Q3, and then increased in Q4 to $2.7 billion. Over five quarters, R&D partnerships raised $11.7 billion in upfront cash and equity, although the total varied significantly between quarters despite the stable number of deals.
Over the last five quarters, the biopharma therapeutic and platforms subsectors saw a consistent number of R&D partnerships, spanning from 118 in Q3 2022 to 147 in Q1 2022. In Q1 of 2023, there were 144 R&D partnerships in these subsectors. Throughout the entirety of the five quarters, the subsectors saw a total of 675 R&D partnership deals.
In Q1 2023, there were only 4 R&D deals in the biopharma therapeutic and platforms subsector with $100 million or more in upfront cash and equity for phase III and earlier assets, totaling $7.7 billion. In contrast, the number and total value of such deals in 2022 varied greatly between quarters. Over the last five quarters, 29 deals with $100 million or more in upfront cash and equity resulted in a total deal value of $71.6 billion.
Most deals in the biopharma therapeutic and platforms subsector fell into the middle category, with 118 deals between $10 million and $100 million. The deals over $100 million were the second highest at 28, while deals below $10 million were the least frequent, with only 33 deals. However, there were some fluctuations in the distribution across deal sizes over time. In Q3 2022, the number of deals in the over $100 million category was the highest at 6; in Q1 2022, the number of deals in the less than or equal to $10 million category was the highest at 4. In Q1 2023, the number of deals in the over $100 million category was only 4.
Our data indicate that while a significant proportion of R&D deals in the biopharma therapeutic and platforms subsector involve large amounts of upfront cash and equity, a substantial number of deals also fall within the $10 million to $100 million range. This suggests that there may be opportunities for companies of various sizes and stages of development to engage in R&D partnerships.
Deals
- In January 2023, Hutchmed granted Takeda exclusive rights (excluding China, Hong Kong, and Macau) to commercialize fruquintinib, an oral tyrosine kinase inhibitor for metastatic colorectal cancer. Takeda will be responsible for worldwide development and commercialization, and Hutchmed will receive an upfront payment of $400 million, up to $730 million in milestones and royalties.
- In February 2023, Pharmanovia was granted exclusive rights by Axsome to develop and commercialize Sunosi for treating excessive daytime sleepiness due to narcolepsy or obstructive sleep apnea in MENA and Europe. Pharmanovia will handle regulatory, clinical activities, and marketing, and Axsome will receive an upfront payment of $66 million, up to $101 million in milestones, and undisclosed royalties.
- In March 2023, Vertex Pharmaceuticals agreed to pay up to $100 million to CRISPR Therapeutics for its gene-editing technology in developing therapies for diabetes. Under the terms of the agreement, Vertex will use CRISPR’s technology to develop up to six therapies for treating type 1 and type 2 diabetes in exchange for an upfront payment of $175 million and additional milestone payments of up to $100 million.
- In March 2023, OncoC4 granted BioNTech exclusive, worldwide rights to co-develop and commercialize ONC-392, an anti-CTLA-4 mAb for treating solid tumors, including NSCLC. OncoC4 and BioNTech will equally share development costs, and OncoC4 will receive $200M upfront, along with potential milestone payments and royalties.
- In March 2023, Gilead partnered with Nurix to develop protein degradation therapies for diseases with unmet medical needs. Nurix will receive $45 million upfront and is eligible for up to $2.3 billion in option fees, milestone payments, and royalties on commercialized products. The collaboration will focus on three initial targets in oncology, inflammation, and virology.
Conclusion
Several notable partnerships were formed in Q1 2023 to develop innovative therapies and platforms, including CRISPR’s technology for diabetes and cancer immunotherapies. Partnerships focused on AI and ML for drug discovery were also formed, which will shape later in 2023. These collaborations are essential for advancing the industry and bringing new treatments to patients faster by efficiently identifying potential drug candidates.
