Analysing Pharma Deal Data Shows the Importance of Early Partnering

By Lucy Parkinson, VP of Investor Research, LSN

In addition to maintaining the LSN Investor Platform, LSN also provides access to the LSN Business Development platform, which tracks tens of thousands of early stage companies and new life science technologies all over the world.  This platform includes a licensing deals dataset that provides crucial information on valuations, milestones, upfront payments, and everything else you’d need to build valuation comparators for your assets.  By taking a look at all the 2019 data as a whole, we can reveal what’s really happening in pharma dealmaking.

We have recently expanded our deals records and due to the change in the way we compile this data, year-over-year comparisons are difficult.  But here are the key facts that emerge from the 2019 deals data.

Partnering Starts Early

While 2019 saw a good deal of horse-trading of assets that were already on the market (including many deals for regional rights in Asia), we continue to see a lot of early stage companies locking in deals at the Research, Preclinical or Phase I stages.  As you can see by the chart, about a third of 2019’s deals that pertained to a specific therapeutic asset happened prior to Phase II.

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Oncology, Oncology, Oncology

In 2019, dealmakers continued their hunt for new targets and treatments for cancer. Many assets were licensed that did not specify an indication or did not pertain to a specific disease area (this is often true of new drug platforms or delivery technologies), but among those that did, oncology continued to have an outsized presence.  However, we saw an uptick in interest in infectious diseases and in gastroenterology.  In the infectious space, there were several deals for HIV treatments, and in gastroenterology, there was interest in Crohn’s disease, NASH and IBS.  Neurology also remained an active field for deals, with in-licensing efforts related to multiple sclerosis and epilepsy, among other disease areas.

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There are hundreds of potential licensees out there, and they have deep pockets

Every time we take a look into licensing deals data, we find deals being made with a huge variety of organizations all over the world.  From traditional big pharmas and global conglomerates to rising biotechs and even philanthropic foundations that are making co-development deals with startups – there’s no shortage of dealmakers out there, and if you’re looking for a partner for your early stage asset you should spread your net wide.  We captured a total of over 170 organisations that made an in-licensing deal in 2019.  About half of all deals included a stated upfront payment, and over half also stated a milestone payment – sometimes in the billions of dollars.

While not all deals are made public, within our data set the most highly active dealmakers in 2019 were AstraZeneca and Gilead.  We’ll keep our eyes peeled during 2020 for in-licensing activity from these firms and hundreds more.