Top Partnership Deal Terminations

Aug. 31, 2011 - PRLog -- GBI Research found that changes in strategy by the major pharma companies has been the leading cause of termination for top deals in the period of January 2010 to June 2011, accounting for 60% of the total deals terminated in that period. Other causes of deal terminations were negative results in safety or efficacy testing, delays in drug development, and disagreements between licensor and licensee, accounting for 25%, 10% and 5% of the total deals terminated. Mergers and acquisitions, and review of pipeline products by big pharma companies lead to changes in their strategies and sometimes to decisions to terminate licensing agreements. Additionally, delays in drug development caused by the rejection of Marketing Authorization Applications (MAAs) or New Drug Applications (NDAs) by regulatory authorities lead to increases in the development costs of drug candidates, as sponsors are asked to conduct additional studies to determine the safety and efficacy of the drug, and this may lead to the termination of licensing agreements for those drug candidates.

Among the therapeutic areas of the top terminated deals for the period of January 2010 to June 2011, both Central Nervous System (CNS) and Infectious Disease dominated the list of therapeutic areas with the top terminated deals. Each of them represented 25% of the total terminated deals. Oncology was placed in third position, representing 15% of the total terminated deals, followed by Dermatology, Metabolic Disorders, Respiratory, and Musculoskeletal therapeutic areas representing 10%, 10%, 10%, and 5% of the total terminated deals respectively. In nearly all the therapeutic areas, change in a company’s strategy was the cause of termination for most deals.

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GBI Research found that most of the terminated deals in the period of January 2010 to June 2011 had deal values in the range of $400m to $600m, with 40% of the terminated deals having deal values in this range. Some 30% of the terminated deals had deal values in the range of $200m to $400m, 30% of the terminated deals had deal values in the range of $200m to $400m, 15% of the terminated deals had deal values in the range of $0m to $200m, 10% of the terminated deals had deal values in the range of more than $1,000m, and 5% of the terminated deals had deal values in the range of $800m to $1,000m. There was no terminated deal in the range of $600m to $800m between January 2010 and June 2011.

GBI Research, the leading business intelligence provider, has released its latest report, “Top Partnership Deal Terminations” which provides key data, information and analysis of the major deals terminated in the pharma industry in the period January 2010, to June 2011. The report provides a comprehensive insight into the partner companies involved in the deal, the licensed product and their clinical trial data, the terms and conditions of the deal and deal value, and the reasons for the deal termination. The report discusses the most common reasons for the termination of deals in the pharma industry. The report also provides an analysis of the therapeutic areas and range of deal values of the terminated deals.

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