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1、 1 Key Findings: In Vitro Diagnostics M Roche, 2011 SCRIP INSIGHTS 8 The 10 leading IVD companies account for almost 80% of global IVD sales The IVD industry is polarized between a handful of global, multi-technology companies with sales of over $1bn, and around 250 smaller players that tend to focu
2、s on developing new technologies or producing diagnostics for a specific market segment. In fact, the 10 leading IVD companies accounted for almost 80% of global IVD sales in 2010. Table 1: Leading IVD players, 2010 Rank Company Headquarters 2010 IVD sales ($m) 1 Roche Diagnostics Switzerland 9,996
3、2 Siemens Healthcare Germany 4,865 3 Abbott Laboratories US 3,794 4 Beckman Coulter US 3,663 5 Thermo Fisher US 2,374 6 Becton Dickinson US 2,319 7 Johnson & Johnson (Ortho-Clinical Diagnostics) US 2,053 8 bioMrieux France 1,800 9 Alere US 1,536 10 Sysmex Japan 1,422 11 Bio-Rad US 1,265 12 Olympus M
4、edical Japan 1,149 13 Qiagen Netherlands 1,087 14 Hologic US 549 15 Gen-Probe US 523 Source: Clinica 100, 2011 SCRIP INSIGHTS 9 M&A activity remains a key driver of IVD company growth and shows little sign of slowing During January 2009 to April 2012, a total of 125 M&A deals were identified, with t
5、he number of M&As in 2011 up 29% compared with the previous year, reflecting the continuing consolidation among the leading players. With M&A deals both driving sales expansion through accessing and expanding into new geographic and technology markets, as well as creating cost-cutting opportunities,
6、 this trend is expected to continue unabated. Figure 3: Number of IVD M&As per year, 200912 0 5 10 15 20 25 30 35 40 45 50 200920102011Jan-Apr 2012 Number of M&A deals Source: Clinica, 2012 SCRIP INSIGHTS 10 Technology-focused companies are the primary IVD M&A targets Analysis of M&A deals according
7、 to the primary focus of the acquisition target reveals that buyers are heavily targeting technology-focused companies. These accounted for 37% of the 125 M&As during 200912, followed by point-of-care-focused companies (10%). In terms of disease areas, cancer diagnostic companies were targeted the m
8、ost frequently, reflecting the high level of pharmaceutical activity in developing targeted cancer therapies that require diagnostics to stratify patient populations. The second most popular diagnostic target was infectious disease, an area in which molecular technologies are contributing to advance
9、s in the diagnosis and management of viral and bacterial infections such as HIV, hepatitis, human papillomavirus (HPV), and hospital-acquired infections. Figure 4: Number of M&A deals according to primary IVD target company focus, 200912 0 5 10 15 20 25 30 35 40 45 50 Technology Oncology Point-of-ca
10、re test Infectious disease Multiple therapy areas CNS Diabetes/glucose monitoring Autoimmune Blood Cardiovascular Drug abuse Fertility Gastroenterology Renal Other Number of deals by focus Source: Clinica, 2012 SCRIP INSIGHTS 11 The US and EU remain the focus for IVD M&As, but emerging markets will
11、see intense deal-making activity going forward With the majority of IVD companies based in the US and Europe, it is not surprising that most M&A activity took place in these regions. Interestingly, the BRICT countries (Brazil, Russia, India, China, and Turkey) were collectively ranked third both in
12、terms of target and acquirer locations. With emerging markets projected to grow at a CAGR of 10% during 201015, increased M&A activity can be expected within the BRICT countries. China has become a top priority to enter or expand a presence in, tapping into the rapidly growing Chinese IVD market, wh
13、ich is projected to grow by 17% from RMB8.5bn ($1.3bn) to RMB18bn ($2.8bn) between 2010 and 2015 (Roche, 2011). The major IVD players have already established strong footholds in China, led by Roche, Beckman Coulter/Danaher, Abbott, Siemens, and Sysmex. Figure 5: IVD M&A deals, by geography, 200912
14、0 10 20 30 40 50 60 70 US EUBRICTCanadaAustraliaIsraelJapanKorea Target geography M&A deals by acquirer geography US EUBRICTJapanSouth Korea Source: Clinica, 2012 SCRIP INSIGHTS 12 IVD acquisitions values have more than tripled since 2010 The average value of acquisition deals for which financial de
15、tails were disclosed has grown more than threefold, from approximately $190m in 2009 and 2010 to $679m during the first 4 months of 2012. The escalating trend in deal values reflects the growing number of high-value deals (of more than $1bn) and underlines a confidence in the potential return on inv
16、estment offered by the growing IVD market, especially in emerging countries and in the molecular and tissue-based testing segments. Figure 6: Average deal values of IVD acquisitions, by year, 200912 0 100 200 300 400 500 600 700 800 200920102011Jan-Apr 2012 Average M&A deal value ($m) n = 19 n = 21
17、n = 28 n = 6 Source: Clinica, 2012 SCRIP INSIGHTS 13 IVD partnership activity slowed in 2011 in response to continued M&A activity IVD partnership deals activity is an established feature of the industry, with 1,008 such deals having been made during the period of January 2009 to April 2012. While t
18、he number of IVD partnership deals grew by 16% during 200910, it fell by 10% in 201011, although the number of deals in 2011 exceeded those in 2009, which may reflect the increased focus from many companies on M&A during 2011, rather than entering into partnership deals. Figure 7: Number of IVD part
19、nership deals per year, 200912 0 50 100 150 200 250 300 350 200920102011Jan-Apr 2012 Number of deals Source: Datamonitor, adapted from MedTRACK Deals and Alliances, May 2012 SCRIP INSIGHTS 14 Marketing, promotion, and distribution deals are the most popular IVD deal type In terms of IVD partnerships
20、, marketing, promotion, and distribution deals were the most frequent deal type entered into, responsible for one third of all partnership deals made during 200912. Such deals allow licensors to expand their sales geographically, while providing licensees with access to new IVD products that can be
21、sold in markets for which they have specific local knowledge and expertise. Going forward, as companies seek to penetrate emerging markets and respond to demands for new diagnostic tools that guide therapeutic choices, this trend can be expected to continue beyond 2012. Figure 8: Number of IVD partn
22、ership deals, by deal type, 200912 0 50 100 150 200 250 300 350 400 Market / promotion / distribution Tech license Research Collaboration / co-development Personalized therapy collaboration Manufacture / supply Asset acquisition Joint venture Grant Deal type Number of deals Deals involving a Top 50
23、pharmaceutical companyOther IVD collaborations Source: Datamonitor, adapted from MedTRACK Deals and Alliances, May 2012 SCRIP INSIGHTS 15 Companion diagnostic partnership deals gather momentum Analysis of technology deals indicates that IVD companies are keen to enhance their competitive position in
24、 the marketplace by improving their diagnostic offerings and capabilities through tech licensing agreements. As an alternative to in-house development or acquisition of technology, entering into such licensing agreements is a less costly means to augment, or fill gaps in a companys technology portfo
25、lio. During the 200912 period, there was significant collaboration between IVD and top 50 pharmaceutical companies focused on personalized therapy with the aim of developing companion diagnostics. Furthermore, with 12 personalized therapy deals entered into by the end of April, 2012 could be a bumpe
26、r year for such partnerships, reflecting the growing trend towards early collaboration between pharmaceutical and IVD players to produce a diagnostic that can be used during the clinical trial process, and which can later be commercialized in conjunction with a targeted pharmaceutical therapy. A key
27、 driver of Rx/Dx partnerships is the regulatory environment, particularly initiatives in the US that are leading the way in stimulating co-development of drugs and companion diagnostics, with the US Food and Drug Administration (FDA) encouraging pharmaceutical companies to incorporate pharmacogenomi
28、c studies in their drug discovery and development programs. In draft guidance issued in July 2011 for the regulation of companion IVDs, the FDA states that, with certain exceptions, if safe and effective use of a therapeutic product depends on the use of a companion IVD, an approved or cleared compa
29、nion device should be available for use once the therapeutic product is approved. 16 Figure 9: Number of IVD personalized therapy collaborations, by company type, 200912 0 5 10 15 20 25 30 35 40 200920102011Jan-Apr 2012 Number of deals IVD-pharma collaborationsIVD-pharma personalized therapy collabo
30、rations Source: Datamonitor, adapted from MedTRACK Deals and Alliances, May 2012 SCRIP INSIGHTS Analysis of deals for which financial details were disclosed reveals that the average value of personalized therapy collaborations (average of $105m across five deals) far exceeded any other type of deal.
31、 While the data reflect only a sample of deals, they nevertheless indicate the potential value of companion diagnostics and personalized therapies to IVD and pharma companies, and explain why diagnostic firms are keen to develop and invest in such technologies. 17 Figure 10: Average size of IVD part
32、nership deals, by deal type, 200912 0 20 40 60 80 100 120 Personalized therapy collaboration Tech license Asset acquisition Market / promotion / distribution Manufacture / supply Joint venture Collaboration / co-development Research Grant Deal type Average deal size ($m) Source: Datamonitor, adapted
33、 from MedTRACK Deals and Alliances, May 2012 SCRIP INSIGHTS Strategies for successful deals Strategic partnerships are as much part of IVD companies growth strategies as M&As. Key factors influencing deals are the need to access and expand technology and menus, as well as to grow geographically. Abo
34、ve all, acquisitions and partnerships must be a good strategic fit and provide value. Finding the right partner Among questions to be considered when assessing acquisition targets are: ? Is the target company a good fit with the existing business, offering complementary technologies and products or
35、new market opportunities? ? Will the acquisition positively impact financial performance in a short timeframe? ? Are there potential cross-selling opportunities? 18 ? Can the integration of the new business be easily managed? Hologic and Gen-Probe a good strategic fit The merger between Hologic and
36、Gen-Probe appears to answer the first three questions, but how the integration is managed remains to be seen. A year after Novartis pulled out of the bidding race for Gen- Probe, the diagnostics leader in the sexually transmitted disease (STD) market found a partner in Hologic. The merger is set to
37、enable Gen-Probe to grow its international business, while complementing and broadening Hologics offerings in womens health in diagnostics, and providing significant cross-selling opportunities. Hologics $3.7bn acquisition of Gen-Probe, which is expected to be completed during the second half of 201
38、2, will create a combined business with pro forma revenues of $2.5bn and a strong (86%) focus on womens health (Hologic, 2012). Figure 11: Hologic and Gen-Probe combined revenues, 2011 0 500 1,000 1,500 2,000 2,500 3,000 GEN-PROBEHOLOGICHOLOGIC + GEN-PROBE Revenue ($bn) DiagnosticsBlood screeningBre
39、ast (Womens) healthSurgicalSkeletalOther Source: Hologic, 2012 SCRIP INSIGHTS 19 Strategic benefits of the merger are that: ? Hologic gains access to Gen-Probes tests for STDs in addition to expanding its offerings through Gen- Probes other tests focused on womens health, as well as instruments, blo
40、od screening, and prostate oncology. The combined cervical cancer screening offerings will cater for both high-volume (regional reference labs) and low-volume (hospital and cytology labs) sectors. ? Cross-selling opportunities are envisaged within the diagnostics franchise courtesy of Hologics exten
41、sive channel coverage and the addition of Gen-Probes best-in-class assays. Hologics physician sales team will also help to grow test utilization. ? Gen-Probe will gain expanded access to the global market, benefiting from Hologics European direct sales and marketing structure, and investment in Chin
42、a, where Hologic has 500 staff. Not only is the merger a good strategic fit, but Hologic expects the transaction to accelerate top and bottom- line growth rates. Cost synergies of around $75m are anticipated within 3 years of the close of the transaction, with $40m coming in the first year. The comb
43、ination is expected to be $0.20 accretive to Hologics adjusted earnings per share in the first fiscal year of the merger. Future acquisition targets Given the fragmented nature of the IVD industry, there is plenty of scope for future consolidation as IVD companies look to pursue acquisition strategi
44、es to gain market share: ? Molecular diagnostics The interest shown in Gen-Probe indicates the potentially attractive nature of molecular diagnostics to major players. Some seven potential buyers were reportedly interested in Gen-Probe before the deal with Hologic was finalized. Given the level of i
45、nterest in this area, companies specializing in molecular diagnostics such as Qiagen and Cepheid could be future targets for acquisition. ? Companion diagnostics Qiagens leading position in the companion diagnostics field also makes it an attractive potential takeover target. 20 ? Cancer diagnostics
46、 Another company with a strong focus on companion diagnostics, Genomic Health, has been cited by analysts as a viable M&A target. The company is a pioneer of cancer diagnostics, with its Oncotype DX tests for breast and colon cancers. ? Diabetes The dynamics of the diabetes testing market could sign
47、ificantly change if reports are true that Bayer is considering exiting the sector. The German companys diabetes business unit generates sales of over $1bn, with a leading position in the global glucose monitoring market. 21 Bibliography Publications and online articles Abbott press release (2012) Ab
48、botts PLEX-ID Molecular System and Tests for Broad Microbial Identification Obtain CE Marking. Available from Available from March 30, 2012 Agendia press release (2012) Agendia raises $65 million in a private round of equity financing. Available from Available from May 31, 2012 Alere (2012) Alere Fo
49、rm 10K related to the period to December 31, 2011. Available from Available from February 29, 2012 bioMrieux press release (2012) bioMrieux 2011 business review. Available from Available from January 24, 2012 Bloomberg (2012) Gen-Probe attracted wide interest a year before $3.8bn sale to Hologic was finalized. Available from Available from May 22, 2012 Casper, M (2012) Thermo Fisher Scientifics CEO Discusses Q1 2012 Results - Earnings Call Transcript. Available from Available from April 25, 2012 Clinica (201