Morrison & Foerster is pleased to introduce the MoFo BioMeter™, an index developed to measure the health of the biotechnology industry. BioMeter takes the pulse of the industry by looking at a key measure of deal value—up-front payments—for deals in all stages of development. We also offer insight on the data and the potential impacts on deal-making and financing.
In our first report, we analyze more than 1,000 biotechnology transactions between 2006 and 2011, and the first three quarters of 2012. The numbers show the average up-front payment in licensing, collaboration, and development agreements was $35.5 million for all stages of development from 2006 through 2011. The numbers also show that figure moved significantly higher in 2011 and the first quarter of 2012 as the biotech market shifted toward transactions for approved products.
Additional findings from the BioMeter include:
In 2011 and Q1 2012 the highest percentage of biotech deals were for approved products (46% in 2012), demonstrating a willingness on the part of buyers to wait for removal of regulatory risk.
Pre-clinical asset transactions have hovered consistently around one-third of total deals over the last five years. While the total number of transactions decreased during this period from 201 in 2006 to 119 in 2011, BioMeter values stayed relatively constant through the first quarter of 2012, showing that pre-clinical assets remained valuable to the right buyers but that finding the right buyers was becoming more challenging.
While it’s too soon to announce a new trend, the course of 2012 after Q1 saw a marked decline in approved-product deals; 61% of Q3 transactions, meanwhile, involved therapeutics in the pre-clinical stages.
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