In my April 27 discussion, I looked at the pharmaceutical companies that are most likely to pursue acquisitions this year, with activity forecasted to pick up after a down 2020. While the pandemic contributed to the slowdown in merger and acquisitions, licensing arrangements fared far better, coming in relatively flat at a total value of about $40 billion
Licensing is attractive to members of Big Pharma who need to fill gaps in their product line or get into entirely new therapeutic areas, but don't want to buy another company to acquire its assets. It's also usually a more economical way to go. In-licensing can be better for investors given they can speed up corporate development while mitigating risk, according to Pharmaceutical Investing News.
For the second year in a row, AstraZeneca PLC (AZN, Financial) and Daiichi Sankyo Co. (TSE: 5468) collaborated on the biggest deal, with AstraZeneca paying the Japanese company $6 billion--$1 billion upfront--for rights outside of Japan to a promising cancer drug. Last year, AstraZeneca paid nearly $7 billion to obtain another cancer treatment from Daiichi, and that turned out to be a good investment as the medication was approved for patients with breast and gastric cancer.
The AztraZeneca-Daiichi deal continued a trend of Big Pharma going after oncology drugs. FierceBiotech reported that assets in the category accounted for more than half (eight) of the top 15 licensing pacts last year, with four in the more specific cancer immunotherapy area. Companies spent more than half of the $40 billion that changed hands on cancer candidates.
Next to cancer, the most popular field for licensing was central nervous system therapies. Here, Biogen Inc. (BIIB, Financial) was the biggest player, spending about $8 billion in deals with Sage Therapeutics Inc. (SAGE, Financial), Sangamo Therapeutics Inc. (SGMO, Financial) and Denali Therapeutics Inc. (DNLI, Financial).
Biogen specializes in CNS, and its most prominent drug is the Alzheimer's disease candidate aducanumab, which has been steeped in controversy. If aducanumab fails to gain regulatory approval, Biogen and its investors are going to be sorely disappointed. The company is probably stockpiling candidates to cushion any blow it may suffer.
Merck & Co. Inc. (MRK, Financial) and AbbVie Inc.(ABBV, Financial) each struck a pair of cancer deals with values of $7 billion and $5.8 billion.
Below is a complete list of the 15 largest in-licensing deals in 2020, as compiled by FierceBiotech.
| Licensor | Licensee | Amount ($billions) |
| 1 AstraZeneca | Daiichi Sankyo Co | $6.0 |
| 2. Merck | Seagen, Inc. (SGEN, Financial) | $4.5 |
| 3. AbbVie | Genmab (OCSE:GMAB) | $3.9 |
| 4. Biogen | Sage Therapeutics | $3.1 |
| 5. Biogen | Sangamo | $2.72 |
| 6. Sanofi (SNY) | Nurix Therapeutics Inc. (NRIX) | $2.55 |
| 7. Merck | Astex/Tahio | $2.5 |
| 8. Biogen | Denali | $2.15 |
| 9. Innovent Biologics Inc. (HKSE:01801) | Roche (RHHBY) | $2.1 |
| 10. CSL Behring | UniQure (QURE) | $2.05 |
| 11. Neurocrine Biosciences Inc. (NBIX) | Takeda Pharmaceuticals Inc. (TAK) | $2.02 |
| 12. Alnylam Pharmaceuticals Inc. (ALNY) | Blackstone | $2.0 |
| 13. AbbVie | I-MAB (IMAB) | $1.94 |
| 14. Roche | Blueprint Medicines (BPMC) | $1.7 |
| 15. Eli Lilly and Co. (LLY) | Innovent Biologics Inc. (HKSE:01801) | $1.025 |
Disclosure: The author has positions in AbbVie, Neurocine Biosciences, Sanofi and Eli Lilly.
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