PharmSource - M&A in the CMC Services Industry: Implications and Outlook

M&A is reshaping the bio/pharmaceutical contract development services industry. Established CMOs and CROs are pursuing acquisitions to drive scale and broaden their offerings, while private equity are anxious to either gain a presence in the industry or cash in on investments already made. Acquisitions of facilities divested by bio/pharma companies offer an alternative route for entering the industry or increasing capacity.

Scope

According to the latest PharmSource Trend Report, M&A in the CMC Services Industry: Implications and Outlook, in the three-year period 2014-2016 there were 101 acquisitions of CMC services companies, including dose and API manufacturing, packaging, logistics, formulation and analytical services. Only 25% of the targets had revenues greater than $100 million; most targets were small companies. Contrary to the popular impression, little industry consolidation has resulted from M&A.

M&A in the CMC Services Industry: Implications and Outlook analyzes how M&A in the bio/pharma contract services industry is likely to play out over the next two years. It examines which capabilities are likely to be most in demand by acquirers and which companies are most likely to be targets.

Reasons to buy

This report is required reading for:

- CMOs: market trends, strategic planning, competitive intelligence, performance benchmarking

- Bio/Pharma: supplier performance benchmarking, market trends, competitive intelligence

- Private equity and Stock analysts: target identification and analysis, portfolio company performance benchmarking

Table of Contents

1 Executive Summary

3 Objectives and Methodology

4 Overview of M&A Activity

2014-2016

12 Segment Close-Ups of M&A Activity

2014-1026

19 Valuations

22 Facility Acquisitions ...

1 Executive Summary

3 Objectives and Methodology

4 Overview of M&A Activity

2014-2016

12 Segment Close-Ups of M&A Activity

2014-1026

19 Valuations

22 Facility Acquisitions

25 What It Means

28 The Outlook for M&A in CMC

Services

32 Appendix

List of Tables

Table 1 CMC Services Businesses Acquired as Part of Larger Deals

Table 2 Company Acquisitions 2014-2016 by Target Service and Size

Table 3 Company Acquisitions ...

Table 1 CMC Services Businesses Acquired as Part of Larger Deals

Table 2 Company Acquisitions 2014-2016 by Target Service and Size

Table 3 Company Acquisitions 2014-2016 by Target Service and Ownership

Table 4 Company Acquisitions 2014-2016 by Target Market Scope and Size

Table 5 Most Active Acquirers 2014-2016

Table 6 Acquisitions of Dose Manufacturers

Table 7 Acquisitions of Biologics API Manufacturers

Table 8 Acquisitions of Small Molecule API Manufacturers

Table 9 Acquisitions of Analytical Services Providers

Table 10 Acquisitions of Formulation and CTM Providers

Table 11 Acquisitions of Packaging and Logistics Services Providers

Table 12 CMC Services Deals with Known Transaction Value and Multiples

Table 13 Facility Acquisitions by CMOs 2014-2016

Table 14 Number of Deals by Buyer and Target Service Offering

Table 15 Acquisitions by Private Equity Firms 2014-16

Table 16 Service Providers Owned 4+ Years by PE Firms

Table 17 Potential Targets: Biologics API Service Providers

Table 18 Potential Targets: Gene and Cell Therapy Providers

Table 19 CMC Services Acquisitions 2014-2016

List of Figures

Figure 1 Company Acquisitions 2014-2016 by Target Service Offering

Figure 2 Company Acquisitions 2014-2016 by Target Revenues

Figure 3 Company Acquisitions 2014-2016 by Target Ownership ...

Figure 1 Company Acquisitions 2014-2016 by Target Service Offering

Figure 2 Company Acquisitions 2014-2016 by Target Revenues

Figure 3 Company Acquisitions 2014-2016 by Target Ownership

Figure 4 Acquisition Targets by Sophistication of Capabilities

Figure 5 Number of Acquisitions by Buyer Rationale

Figure 6 Number of Acquisitions by Buyer’s Core Business

Figure 7 Number of Acquisitions by Buyer Ownership

Figure 8 Number of Acquisitions by Principal Buyer Motivation

Figure 9 Dose Forms Manufactured by Acquired Dose Manufacturers

Figure 10 Bio/Pharma Facility Acquisitions 2014-2016

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