Thermo Fisher Scientific's $13.6 Billion Acquisition of

SAN FRANCISCO, CA--(Marketwired - May 1, 2013) - Global M&A activity in the life sciences sector continues to lag the pace of 2012, but signs point to activity increasing as the largest pharmaceutical companies continue to sit on large amounts of cash, Burrill & Company said today.

Thermo Fisher Scientific's $13.6 billion planned purchase of Life Technologies marks the largest acquisition to date in 2013 in the life sciences arena, but global M&A activity through the end of April reached $32.9 billion, down from $45.7 billion for the same period in 2012.

The 13 largest pharmaceutical companies ended April with $142.4 billion in cash, up from $136.1 billion at the same time a year ago. Pfizer, with $32.7 billion, is sitting on the largest store of cash among those companies.

"The pace of M&A deals continues to be tepid, but that's likely to change," says G. Steven Burrill, CEO of Burrill & Company, a global financial services firm focused exclusively on the life sciences. "With Big Pharma companies rich with cash and needing to refill their pipelines, it's likely the pace of dealmaking will accelerate. Because much of that cash is outside of the United States, it could lead to more global acquisitions."

M&A activity for the month could have been much bigger. Valeant's attempted merger of equals with the specialty pharmaceutical company Actavis through a reported stock swap valued in excess of $13 billion stalled as the two sides failed to agree on price. Royalty Pharma was also stymied in its $7.3 billion bid of Elan, which rejected its offer as inadequate.

Initial public offerings picked up in April as three life sciences companies completed IPOs on U.S. exchanges to raise a combined total of $188.8 million. Chimerix, a developer of antivirals, raised the largest portion of that amount with a $117.9 million offering. The two other offerings, the specialty pharma Omthera Pharmaceuticals and the personalized medicine company Cancer Genetics, both priced below their target ranges. So far, nine life sciences companies have gone public on U.S. exchanges in 2013 and are up a collective 16.8 percent from their offering price. They have raised a total of $3.1 billion, including the $2.2 billion IPO for Pfizer's animal health spinoff, Zoetis, in January. That compares compared to 7 IPOs in 2012 that raised a total of $520 million.

May is poised to provide some follow through as the contract research manufacturer Quintiles is expected to go public with an initial offering of 19.7 million shares at a target range of $36 to $40 a share. It could raise as much as $788 million, which would make it the third largest IPO of the year across all industries. A strong debut could help generate greater interest among investors in life sciences IPOs.

Investments in PIPEs have slowed in 2013 to a little more than $1 billion through the end of April, a 31.8 percent decline. But follow-ons continue to be a strong source of capital for life sciences companies. Through the end of April, life sciences companies raised a total of $3.7 billion in follow-ons compared to just $2.5 billion for the same period a year ago. That included a $515 million offering of newly listed Hong Kong shares from China-based Sinopharm Group at the beginning of the month. Two therapeutics companies that went public in 2012 also raised capital in follow-on offerings in April: ChemoCentryx raised $69 million through the sale of 5.75 million shares at $12 a share, and Durata Therapeutics raised $57.6 million in an offering of 8.3 million shares at $7 a share.

Global venture capital investment in the life sciences is keeping pace with 2012, with total investments through the end of April reaching almost $4 billion. Precision for Medicine, a provider of personalized medicine services, completed the largest venture financing during April, raising $150 million.

Partnering activity jumped in April with global transactions totaling a potential $2.8 billion compared to $1.9 billion for the same period a year ago. This included Roche's $392 alliance with Isis for a preclinical Huntington's program using antisense technology and three early-stage deals involving AstraZeneca for with a total potential value of $500 million. Nevertheless, global partnering is about 18 percent down year to date compared to levels a year ago.

Scorecard YTD April 30, 2013
		YTD April 30, 2013		YTD April 30, 2012		Change
Global Venture Capital		3,974		3,976		0.0%
U.S. VC		2,919		2,816		3.7%
IPOs (10 in 2013 vs 14 in 2012)		3,081		928		232.1%
U.S. IPOs (9 in 2013 vs 7 in 2012)		3,058		520		488.0%
Global PIPEs		1,052		1,521		-30.8%
U.S. PIPEs		385		561		-31.4%
Global Follow-ons		3,675		2,456		49.6%
U.S. Follow-ons		3,033		2,313		31.1%
Global Other Equity		385		818		-52.9%
U.S. Other Equity		326		745		-56.2%
Global Debt Offerings		9,833		7,373		33.4%
U.S. Debt		7,086		4,512		57.0%
Global Other Debt		4,123		4,793		-14.0%
U.S. Other Debt		1,444		3,522		-59.0%
Total Global Public Financings		22,150		17,888		23.8%
Total U.S. Public Financings		15,332		12,174		25.9%
Global Partnering		9,879		12,040		-17.9%
U.S. Partner/Licenser		7,015		6,753		3.9%
Global M&A		32,892		45,730		-28.1%
M&A, U.S. Target		22,637		35,345		-36.0%

The U.S. Food and Drug Administration's Center for Biologics Evaluation and Research approved CSL Behring's Kcentra for the urgent reversal of vitamin K antagonist anticoagulation in adults with acute major bleeding. But the agency's Center for Drug Evaluation and Research did not approve any new molecular entities in April, leaving it's year-to-date total at nine approvals compared to 10 for the same period in 2012.

The U.S. Supreme Court in April heard oral arguments in the challenge to Myriad's patents on two genetic tests relating to breast and ovarian cancer. The case is being closely watched by the biotechnology industry because it threatens to upend long standing policy about gene-related patents.

"It is not known how the court will rule, but the oral arguments suggest the court is aware of the importance of protecting incentives for innovation," says Burrill. "There's a lot at stake for the biotechnology industry and the decision could alter the landscape for investment in this industry."

BURRILL INDICES
Index		12/31/2012		3/29/2013		4/30/2013		Month Change		Year Change
Burrill Select		607.66		694.44		772.16		11.2%		27.1%
Burrill Large Cap		736.90		855.73		938.35		9.7%		27.3%
Burrill Mid-Cap		309.52		350.34		372.92		6.4%		20.5%
Burrill Small Cap		105.48		132.00		133.09		0.8%		26.2%
Burrill Diagnostics		191.32		207.78		205.41		-1.1%		7.4%
Burrill Personalized Medicine		119.22		131.90		140.28		6.3%		17.7%
Burrill Biogreentech		162.27		182.13		184.61		1.4%		13.8%
NASDAQ		3019.51		3267.52		3328.79		1.9%		10.2%
DJIA		13104.14		14578.54		14839.80		1.8%		13.2%
S&P 500		1426.19		1569.19		1597.57		1.8%		12.0%
Amex Biotech		1547.03		1826.747		1931.57		5.7%		24.9%
Amex Pharmaceutical		369.57		412.613		427.78		3.7%		15.8%
NASDAQ Biotechnology Index		1430.81		1669.28		1798.38		7.7%		25.7%

About Burrill & Company

Founded in 1994, Burrill & Company is a diversified global financial services firm focused on the life sciences industry. With $1.5 billion in assets under management, the firm's businesses include venture capital/private equity, merchant banking, and media. By leveraging the scientific and business networks of its team, Burrill & Company has established unrivaled access and visibility in the life sciences industry. This unique combination of resources and capabilities enables the company to provide life sciences companies with capital, transactional support, management expertise, insight, market intelligence, and analysis through its investments, conferences, and publications. Headquartered in San Francisco, the company oversees a global network of offices throughout the United States, Latin America, Europe, and Asia. For more information visit: www.burrillandco.com .