Biotech PE, VC deal activity continues to rise amid impressive year-on-year dollars jump

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Private equity and venture capital dealmaking activity in the biotech sector continued to rise in July amid an uptick in dollars invested, new research shows.

PE and VC capital investment targeting the global biotech sector improved to 56 deals worth an aggregate $719m last month, an eight per cent rise in volume from June and up 24 per cent year-on-year.

The data from Moody’s subsidiary Bureau van Dijk also showed promise for dollars invested year-on-year, with the result up 45 per cent from the $497m committed by the asset classes in July 2018.

It said overall improvement in PE and VC activity in the biotech sector could be attributed to 18 of the top 20 deals by value being worth $10m or more, with the top deal passing $100m.

US targets featured in 13 of the top 20 deals by value last month, the largest of which saw Kronos Bio raise $105m.

That was followed by France’s Aliza Pharma III securing $75m from Life Sciences Partners, Novo Holdings, Kuma Partners and OrbiMed Advisors.

The remaining top five deals involved three other US-based biotech firms raising cash, including Frequency Therapeutics ($62m), Kumquat Biosciences ($47m) and Bolt Biotherapeutics ($40m).

Together, the top five deals accounted for 46 per cent of total PE and VC value in July, BvD’s research showed.

Of the remaining top 20 by value, only one took the form of an institutional buyout. This was the sixth-largest deal and involved Medicxi Ventures, Taiho Ventures and Evotec buying a majority stake in Breakpoint Therapeutics for $34m.

While companies in the US were the most frequently targeted, France featured in three deals, China in two and Germany and South Korea in one deal each.

BPIFrance was the only investor to take part in two of the largest deals in July, including the aforementioned $75m cash call by Aliza Pharma, as well as France-based Microphyt raising $32m.

The US was the highest-valued target country in the month under review with $481m, compared to $342m in June and $282m in July 2018.

France was second by value with $116m, representing a significant improvement on $5m month-on-month.

Third-placed was China ($55m), followed by Germany ($34m), South Korea ($29m), Canada ($3m) and Australia ($1m).

In wider biotech dealmaking, the value of mergers and acquisitions targeting the sector globally improved slightly year-on-year, despite declining over the four weeks from the third-highest record month of the last 12 under review.

BvD said there were 105 deals worth about $5.6bn in July, comparable with the $5.5bn from July last year, but well down on the 181 deals worth $18.2bn from June this year.

In total, six of the top 20 M&A deals by value were worth over $100m, although it was the largest deal that significantly supported total value in July, as Exact Sciences agreed to acquire US-based Genomic Health for $2.8bn.

That deal represented half of total M&A value in the four-week period. The second-largest transaction involved Zambon Group buying Dutch respiratory disease therapy group Breath Therapeutics for $557m, while Amarin of the UK raised $460m via a public offering of American depositary shares in the third-biggest deal.

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