BioMeter shows re-emergence of late-stage biotech deals

Law firm Morrison & Foerster (MoFo) has released its Q3 edition of BioMeter. The quarterly report measures the health of the biotech industry by averaging up-front payments in licensing, collaboration and development agreements between biotech firms and companies that pay for commercialisation rights.

The report reveals a big jump in the number of deals and average payments for Phase 3 and approved products - the strongest numbers MoFo has seen since it created the BioMeter Index. BioMeter notes seven Phase 3 transactions with an average up-front payment of $83.3 million and five approved-product transactions with an average value of $86.7 million, for the third quarter.

In Q3, the average BioMeter Index value for all transactions was $45.4 million - an increase over Q3 2013, as well as over Q2 2014 if the second quarter’s two blockbuster deals ($1 billion Merck/Bayer and $710 million Celgene/Nogra) are excluded. Meanwhile, after an exceptionally high-value Q2, pre-clinical/discovery-stage transactions returned to more characteristic territory ($10.9 million average across four transactions). Phase 1 and 2 values in Q3 were weak despite the same number of Phase 2 deals as in Q2 - a period in which their average value ($33.1 million) was more than 250% higher than in Q3. 

The robust performance is said to reflect ‘selective pipeline filling’ as pharma companies switch from the focus on early-stage assets to pursuing products ready or almost ready for commercialisation.