Oncolytics Biotech Inc T.ONC

Get ready for more merger mania in the pharma sector

[Noteable]

August 10, 2022 - Morningstar - Get ready for more merger mania in the pharma sector for the rest of the year

Pfizer's $5.4 billion acquisition of Global Blood Therapeutics is the latest sign that cash-flush drug makers are ready to make some deals.

Pfizer Inc.'s (PFE)$5.4 billion acquisition of Global Blood Therapeutics Inc. (GBT) is the latest sign that cash-flush drug makers are ready to jump back into dealmaking.

"We see strong underlying reasons to expect a big increase in deal activity. Whether or not prospective big deals like Merck's rumored acquisition of Seagen close, we have already seen certain Big Pharma players returning to M&A in the second quarter of 2022," Subin Baral, EY's global life sciences deals leader, said in an email. "We anticipate that this trend will continue."

These deals hint at an action-packed second half. 

"2022 will be a year of bolt-on transactions in the $5 [billion] to $15 billion range," the PwC authors wrote. "However, don't rule out the potential for larger deals -- consolidation is good for the health ecosystem and drives broader efficiency."

https://www.morningstar.com/news/marketwatch/20220810210/get-ready-for-more-merger-mania-in-the-pharma-sector-for-the-rest-of-the-year

[Noteable]

The biggest deal so far this year is Pfizer's $11.6 billion acquisition of Biohaven Pharmaceutical Holding Co. Ltd. (BHVN) in cash. That deal is expected to add $6 billion in peak sales to the business. Pfizer, which has generated billions of dollars of sales of its COVID-19 antiviral and the vaccine it developed with BioNTech SE (BNTX), had about $2.4 billion in cash on hand, as of April 3

[Buckhenry]

all this merger mania is great but its has not done anything for oncy the last 3 years.

[Noteable]

Aug 12, 2022 | 10:04 AM By Amruta Khandekar and Leroy Leo (Reuters) – Plunging valuations have made biotech companies tempting acquisition targets for cash-rich Big Pharma and a flurry of deals is just what the battered sector needs to turn a corner. Pfizer’s $5.4 billion acquisition of Global Blood Therapeutics, which was announced on Monday, is the fourth deal in the sector since

[Noteable]

This simple observation requires further emphasis - “Pfizer’s move put boards across big pharma on notice that if you’re not in the market buying these companies while they’re cheap, your competitors will,” Thomas Hayes, chairman and managing member of Great Hill Capital in New York, said.

[Noteable]

The expected merger mania in the pharma sector does not warrant any partnership or licensing deals. Anyone knowledgeable in biotech business development understands that partnering or licensing deals are not the kind of commercialization pathways that are optimal at a time, particularly when Big Pharma needs to replenish their product portfolio pipelines which are threatened by a looming patent

[Noteable]

Should read  ".... partnering or licensing deals are not the kind of commercialization pathways that are optimal at this time ...."

[fox7mf]

I have to agree with Noteable...they're selling, not partnering. I think they are avoiding overt talk of a buyout to kinda 'under promise, over deliver'', as they should. Onc has leverage through the continuous positive results, and can afford to make BP sweat until the appropriate offer is made. BP can make a competitive offer by Sept/Oct, or they can expect to cue up for a

[westcoast1000]

Here is another perspective on strategy. While I would love to sell my shares to some big pharma for, say, $90 per share, which is about $5 bill in a buyout, we need to acknowledge the share price is now $1.70 Cdn. Even if the world accepts the true (subjective) npv is over $90 a share, a mechanism would be needed for the share price to rise wildly to get to $90. Perhaps the partnering approach

[Noteable]

We are entering a time where M&A's are a "different animal" and are no longer based on share price as we are seeing with the USD$ 2 Billion acquisitions of start-up companies and USD$5 Billion acquistions of pre-clinical companies. The time where partnership & licensing agreements led up to a company's acquistion are a thing of the past given that Big Pharma is faced

[Capitalista]

If a buyout is contemplated, existing share price means nothing.  If ONC's board votes to bring a BP offer to shareholders, the sale price per share will be the BP purchase price divided by the outstanding shares (plus exercised options and warrants).  There would be no need to find a mechanism to ramp up the existing market share price.  The above is a "friendly takeover

[westcoast1000]

Thumbs up to the posts from Capitalista and Notable just below. If it goes as you suggest it could I am all for it. I just reflect on how a corporate board has to justify the spending of multiple billions on a company with a tiny market cap. Hence my reasoning. I knew that a early phase company got bought for a couple billion, but I thought its share price was relatively high compared to ours

[Capitalista]

WC1000, it might be helpful to look at how the mining industry works.  ONC and small mining development companies have some similarities.  Both are time-bound (the mining companies by life of mine; small pharma companies by patent expiry).  Both have a variety of development risks. Valuation in mining companies is usually done by a time-bound cost-benefit analysis - the valuation

[Noteable]

"Existing share price, whatever it is, does not figure into the cost-benefit analysis as it is neither cost nor benefit. It's only a reflection of public sentiment in the moment." - "share prices cannot be realistically relied upon to calculate the actual company value" - Exactly !  The value of a mid-to late stage biotech company like ONCY is in pelareorep's

[Noteable]

Furthermore, ONCY's pelareorep is not "time-bound" since the UDFDA has provided 12 years of marketing exclusivity for a biologic like ONCY's pelareorep, beginning at the time of marketing approval for each indication in which a BLA has been submitted, and this exclusivity is over and above a patent and it expiry date. This also means that if another agent nearing its patent

[Capitalista]

With all due respect, Notable, I'm not following your logic.  To my mind, having 12 years' marketing exclusivity is the very definition of timebound.  However, each separate combo of pela with another agent would start a separate 12-year exclusivity period; is this what you mean?  In that sense it is similar to a mining company discovering a new ore body (which they all try

[Noteable]

It means that with each new approval, another 12 years is added to the life of the drug, for an indefinte period of time. Consequently, the only way the product could be "time-bound" is when no futher new indications are approved ... and that could be several decades from now. 

[Noteable]

Recent M&A activity by Big Pharma suggests that the sector is getting primed for accelerated period of M&A activity over the rest of the year and onward as per: August 09, 2022 -  Big Pharma deal-making primed for acceleration Subin Baral, Global Deals Leader, Life Sciences, Ernst & Young LLP, offers his predictions for M&A activity within industry as we head into the later