Found a report (9th dec 2011) which is for sale. Didn’t buy it but the 2 links offer enough information which I think has big picture relevance to ADO – adds weight to ADO possibly being on the M&A radar of some the big players – ie: Roche
Below is the summary (sales pitch) blurb of the report.
DIAGNOSTICS 2011: M&A SURGES, COMPANION DIAGNOSTICS ACCELERATE, AND EARLY DETECTION 0FFERS NEW PROSPECTS
PwC’s Diagnostics 2011 provides an overview of M&A deal activity during the past two years and the factors driving it, the development of new prospects for early detection testing and a review of significant events for the development of personalised medicine. The report also includes an in-depth discussion about trends in companion diagnostics and business model considerations for pharmaceutical companies.
PwC’s report highlights how multi billion dollar IVD (in vitro diagnostics) deals in the first seven months of 2011 more than tripled M&A deal value from 2010 to over $15 billion.
According to PwC’s review of the IVD sector, investor interest in the global IVD market is expected to grow in 2012-2014 following a surge in M&A deal values, an acceleration of companion diagnostics partnerships, and the emergence of new prospects for early detection testing. Interest in the IVD market is coming not only from existing players, but also new entrants such as financial investors, life sciences research groups, clinical laboratories and medical technology players.
PwC expects the IVD competitive landscape will be redefined by new market leaders and larger deals as players bulk up on market share, but sustained momentum of companion diagnostics partnerships with pharmaceutical companies will depend on actions by governments, regulators, payers and industry to support diagnostics innovation.
THE REPORT COVERS THE FOLLOWING THEMES THAT WILL LIKELY SHAPE FUTURE M&A ACTIVITY IN THE IVD SECTOR TO 2015:
* New entrants continue to add IVD businesses: For some newer IVD entrants, recent deal activity may represent only a beginning. Look for these companies to pursue additional acquisitions to maintain the momentum required to achieve critical mass quickly.
* Historical majors responding in kind: If current industry leaders do not respond with significant acquisitions, they may lose market share in key segments. Deals might be challenging because of increasing competition for the most compelling new technologies.
* Private equity houses search for opportunities: An increase in bigger private-equity-backed deals are likely to crystallise — provided capital markets do not slump.
* Major pharmaceutical companies buying molecular or tissue diagnostics businesses: Though this kind of deal activity has been slow in recent years, some major pharmaceutical companies will be increasingly motivated by the confirmation of the drug-diagnostic co-development model. Those not part of a company with a significant IVD division have started building business development teams with diagnostics expertise to support better licensing decisions, and some of these companies will consider buying a diagnostics business to deepen their expertise, increase technology options, and provide direct commercial access.
* A significant player moving into early detection: Several companies are driving the development of a wave of new tests for early detection of major cancers. Only time will tell whether the market adopts the concept of using non-invasive in vitro diagnostics for early detection. If it does, a major diagnostics or pharmaceutical company could move to acquire one or several of the promising new ventures in this field.
ADO Price at posting:
7.4¢ Sentiment: Hold Disclosure: Held
