Despite Trump price concerns, JP Morgan event anticipates M&A boom

Tablets on dollar bills (treatment, addiction, aging - concept). Vintage effect.

Donald Trump's vow to cut drug prices ended up overshadowing all other news at the JP Morgan Healthcare Conference - but there was nevertheless a flurry of deals, and a juicy biotech stock market launch.

Market watchers have predicted a bonanza year for biotech and pharmaceutical M&A, as a number of large companies seek to replenish their pipelines, or boost sales by buying already-marketed drugs.

Swiss biotech Actelion, which specialises in pulmonary arterial hypertension drugs, is often a major player at the annual event in San Francisco, was conspicuous by its absence.

The reason for this was ongoing discussions with Johnson & Johnson over a merger, after Sanofi dropped out of the bidding. According to press reports J&J and Actelion have agreed a price, although no further details are publicly available.

The price J&J will pay has yet to be confirmed – but Actelion generated sales of more than $2 billion in 2015 and is worth around $25 billion according to today’s valuations on the Swiss stock exchange. The J&J news followed the announcement of Takeda's $5.2 billion purchase of cancer drugs firm Ariad.

Valeant sells Dendreon

Another eye-catching deal was Valeant’s sell-off of biotech Dendreon to Sanpower Group, one of the largest privately owned conglomerates in China.

Valeant bought Dendreon for around $300 million in 2015, and with it came the biotech’s only marketed product, the prostate cancer cellular immunotherapy treatment, Provenge (sipuleucel-T).

Approved by the FDA back in 2010, Dendreon had struggled to market Provenge, which is costly to manufacture and faced competition from newer alernatives – namely Johnson & Johnson’s Zytiga (abiraterone) and Astellas/Medivation’s Xtandi (enzalutamide).

Valeant is struggling to pay off debts accrued thanks to a monster buying spree over the last few years – but at least with the Provenge deal it has managed to make a profit.

Bioverativ IPO

Finally, 2017 has begun with a juicy biotech initial public offering, with Bioverativ’s spin-off from Biogen on the NASDAQ. The new company will focus exclusively on haemophilia products, an area undergoing rapid development thanks to emerging treatments from a number of companies.

Bioverativ has the ticker BIVVV, and shares are up more than 13% after launching last Thursday at $40.