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Mintz, Mergermarket Publish Life Sciences M&A Report

In New Report, Dealmakers across the Life Sciences Industry Identify Top Deal Drivers, Successful Integration Strategies, and More

Mintz today announced the publication of a new report, produced in partnership with Mergermarket, entitled “Band Together: Corporate and Cultural Convergence in Life Sciences M&A,” that explores noteworthy trends in M&A dealmaking in the life sciences industry, including top deal drivers and post-closing integration challenges, among other findings.

In order to generate the report, Mintz collaborated with Mergermarket to design and implement a targeted survey of 100 senior-level executives at companies spanning the life sciences industry, including pharmaceutical, biotechnology, medical device, and diagnostic companies, on their most recent M&A experience in the sector. Conducted in the first quarter of 2020, survey responses represent both buy-side and sell-side transactions. While primarily U.S.-focused, the report has a significant foreign component through its data on cross-border transactions.

“We’re excited to share the findings of this important survey,” said Mintz Member and Co-chair of the firm’s Life Sciences Practice Bill Whelan. “We hope that clients and other players in the life sciences industry will leverage the report as a tool for dealmaking and achieving successful post-closing integrations.”

“What distinguishes this report from others in the market is its focus on the post-closing time period,” added Mintz Member Joshua Fox. “Survey responses related to post-closing integration revealed a great deal of sell-side executive departures and frequent disputes that might have been avoided with a greater emphasis on culture, communication, and transparency, both before and during the integration process.“

Additional key findings from the report include:

  • Deal drivers:
    • When asked about the rationale for their most recent deal, the top answer among respondents was patent expirations, followed closely by diversifying/improving product portfolio.
    • Life sciences companies may focus more on acquiring digital health solutions in the future, particularly as business models and operational approaches are being re-evaluated in the context of the COVID-19 crisis.
  • Pricing:
    • A high proportion of seller respondents obtained an acquisition price well in excess of their goal. When asked about the price paid, 28% say the price was 10-20% above target, with 16% reporting that that it was up to 10% more.
  • Structuring:
    • Survey responses indicate that life sciences companies frequently considered alternative strategic transactions, such as initial public offerings and reverse mergers, as part of considering their most recent M&A deal.
  • Post-closing integration:
    • Nearly a third of respondents say the integration process applied in their most recent deal has to date been unsuccessful.

Mintz is a leading life sciences law firm with more than 150 professionals representing therapeutics, vaccine, medical device and systems, research tools and diagnostics companies, as well as investment banks, venture capital firms, and other investors. The firm’s work for these clients encompasses transactional, health care regulatory, intellectual property, litigation, employment, real estate, and other matters. Mintz attorneys are embedded in the global life sciences ecosystem and provide industry leaders with practical solutions to business-critical challenges, helping them achieve their strategic and business goals.

Please click here to read the full report.