Life Sciences & Healthcare  Newsletters

Kempen & Co European Life Sciences ECM update 

• Monthly update on Equity Capital Markets of European Life Sciences companies.
• Provides insights on market developments, financing transactions, share price developments and other relevant insights in the field of ECM.
• Example analysis from the April 2020 ECM update below.

Impact of the VIX on ECM deal volume

• Historically, increases in the CBOE Market Volatility Index (VIX) tend to have negative impact on the raw number of ECM transactions in that particular year, worsening with greater duration.
• Short-term spikes have had relatively limited impact on deal flow. In 2015 and 2018 during which the VIX briefly traded above 35 for two trading days deal volumes were 114% and 94%, respectively, of the average level in years were the VIX remained below 35 for the entire year.
• In years in which the VIX increased over 35 for nine or more trading days as it did in 2008-2011, transaction volume stood at c. 76% of the average in years in which it didn't.
• Due to COVID-19, the VIX now traded above 35 for over twenty consecutive trading days. The last time this sustained level of volatility occurred was in 2008 and 2009. In those years, ECM deal volume represented 44% and 85% of the average in years where periods of volatility were shorter.
• While 2020 is the longest sustained period of high volatility since 2008 and 2009,it is still not close to the duration seen then when the VIX traded above 35 for 138 consecutive trading days. Therefore, COVID-19’s ultimate impact on ECM deal flow is yet to be determined.

Source: Dealogic, Bloomberg, Kempen & Co analyses.
VIX data as of 31 Mar 2020, Deal data as of 20 Mar 2020. 
Includes all IPOs, follow on capital raises, convertible bond issues, and rights issues.

Kempen & Co European Life Sciences M&A update

• Bi-monthly update on Mergers & Acquisitions of European Life Sciences companies.
• Provides insights on the current M&A climate, recent developments, transactions and other relevant insights in the field of M&A.
• Example analysis from the March 2020 M&A update below.

The golden age of Biotech 

Median company age at acquisition   

• Overall, the median age of a life science company at acquisition is 14.8 years.
• The relatively quick biotech acquisitions reflect the fast pace of innovation – particularly in the immuno-oncology space. Two of the five youngest targets, less than three years old, were developing IO therapies.
• Unsurprisingly, the median age at acquisition for generics is 19.8 years, closely followed by specialty pharma companies at 18.4 years.

Sources: Company's press releases, Bloomberg, MergerMarket, Thomson Reuters Eikon and Kempen & Co analysis.
Includes all relevant transactions where either target or bidder is headquartered in Europe; between Jan 2016 and Mar 2020, minimal deal value of 25m or undisclosed; N = number of deals.