While some dealmaking records were broken in H1 2018, overall deal volumes in the life sciences sector were depressed relative to H1 2017. While the number of M&A deals fell from H1 2017 to H1 2018, the aggregate, mean and median total deal values for these deals increased over this period, although this was much to do with Takeda Pharmaceutical’s pending £46 B (US$62.3 B) acquisition of Shire.

M&A is now a less attractive option for early-stage companies who are able to access large funding rounds and which are seeing valuations climb higher thanks in part to an increasingly robust IPO market. Some major biopharmaceutical

companies returned to M&A in H1 2018, with Novartis, Sanofi and Celgene signing multibillion-dollar deals.

Despite overall deal activity being constrained, the volume of licensing deals in H1 2018 was broadly similar to the level seen in H1 2017, but with a significant rise in aggregate, mean and median deal values. The mean upfront payment for licensing deals fell in H1 2018, however, perhaps suggestive of a shift to earlystage dealmaking and some risk aversion on the part of licensees. Johnson & Johnson (J&J) retained the title of the most prolific dealmaker, although Roche and AstraZeneca climbed up the rankings.

Oncology continued to be the most popular therapy area for dealmaking, with two of the top 3 partnering deals as ranked by upfront payment being co-development and co- ommercialisation collaborations centered on key immuno-oncology assets. Oncology and rare diseases also dominated the M&A landscape.

Gene therapy deals rose in prominence in H1 2018, featuring in both the top 10 M&A and partnering deals lists. Appetite for collaborative R&D alliances was reduced in H1 2018, with a variety of deal structures being used for early-stage assets and both principal and partnering companies being able to demonstrate selectivity in the deals they chose to pursue, albeit for quite different reasons. Nevertheless, Biogen’s April 2018 collaboration with Ionis Pharmaceuticals to develop antisense therapeutics for neurological diseases ranks as the largest collaborative R&D on record in terms of upfront consideration if both its US$375 M upfront payment and US$625 M equity investment are taken into account.