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Research Outline

Prepared for Michael B. | Delivered December 31, 2019

Oncology Market - Mergers & Acquisitions

Goals

To find 5-7 mergers and acquisitions (M&As) that have occurred in the oncology market within the last five years. Provide the following details for each M&A: 1) who was involved, 2) what was the purpose of the merger (specifically what were the combined companies expected to bring to the oncology space), and 3) any available cost information.

Early Findings

During this hour of research we were able to examine three M&As in the oncology market that occurred within the last five years: BMS-Flexus Bioscience, Merck-ArQule, and AstraZeneca-AcertaPharma. Our findings indicate that the primary motivation behind these mergers was obtaining full rights to new cancer treatment therapies.

M&A #1: BMS and Flexus Biosciences

  • Flexus Biosciences is a biotechnology and pharmaceutical company headquartered in San Carlos, California that develops "novel anti-cancer therapeutics through an innovative application of unexploited insights in immunology." It reports $3 million in annual revenue.
  • Flexus Biosciences was acquired by BMS in February 2015 for $1.3 billion.
  • The main reason for the merger was to obtain rights to a new "immunotherapy treatment for cancer that [had] yet to undergo clinical trials."
  • According to a 2015 press release, the merger gave BMS "full rights to F001287, Flexus’ lead preclinical, small-molecule IDO1-inhibitor" and "an IDO/TDO discovery program that includes its IDO-selective, IDO/TDO dual, and TDO-selective compound libraries."
  • Another 2015 press release indicates that the merger led to a 31% increase in BMS's research and development expenses.

M&A #2: Merck and ArQule

  • ArQule is a biotechnology company headquartered in Woburn, Massachusetts that uses innovative technologies to research and develop new cancer therapies. It reports $6.8 million in annual revenue.
  • ArQule was acquired by Merck in December 2019 for $2.7 billion.
  • Merck is a pharmaceutical company headquartered in Kenilworth, New Jersey that develops "medicines and vaccines for various diseases." It reports $46 billion in annual revenue.
  • Merck's main motivation for the merger was obtaining rights for ARQ 531, ArQule's "oral Bruton’s tyrosine kinase (BTK) inhibitor currently in a Phase 2 dose expansion study for the treatment of B-cell malignancies."

M&A #3: AstraZeneca and AcertaPharma

  • AcertaPharma is a pharmaceutical company headquartered in San Francisco, California that develops treatments for cancer and autoimmune diseases.
  • It was acquired by AstraZeneca in December 2015 for $4 billion.
  • AstraZeneca is a pharmaceutical company headquartered in Cambridge, Massachusetts that researches and develops prescription medications. It reports $21.9 billion in annual revenue.
  • The primary motivation behind the merger was securing the rights to ACP 196, AcertaPharma's BTK inhibitor that was in "Phase 3 development for B-cell blood cancers and in Phase 1/2 clinical trials [for] multiple solid tumors."