Ankura is pleased to present the findings of our analysis of the
allocation of the purchase price for transactions involving
Pharmaceutical, Biotechnology, and other Life Sciences companies
from 2021 through 2024 by U.S.-based acquirers. Key takeaways are
as follows:
As noted below, for the period 2021 through 2024, nearly 70% of
the transactions analyzed allocated between 61% and 100% of the
purchase price to In-Process R&D, while 21% of the transactions
allocated between 11% and 60% of the purchase price to In-Process
R&D, and the remaining 9% of the transactions allocated less
than 10% of the purchase price to In-Process R&D. Per
accounting guidance, useful lives of In-Process R&D intangibles
were classified as an indefinite-lived.
For the period 2021 through 2024, where both In-Process R&D
and Developed Technology were identified, nearly 38% of the
transactions analyzed allocated between 61% and 100% of the
purchase price to both assets combined, while 53% of the
transactions allocated between 11% and 60% of the purchase price to
both In-Process R&D and Developed Technology, and the remaining
8% of the transactions allocated less than 10% of the purchase
price to In-Process R&D and Developed Technology combined.
The below chart shows that, for the period 2021 through 2024,
26% of the transactions analyzed allocated between 61% and 100% of
the purchase price to Developed Technology, while 60% of the
transactions allocated between 11% and 60% of the purchase price to
Developed Technology, and the remaining 16% of the transactions
allocated less than 10% of the purchase price to Developed
Technology. Further, useful lives of Developed Technology
intangibles ranged between four and 20 years, with most falling
between 11 and 15 years.
For the period 2021 through 2024, 16% of the transactions
analyzed allocated between 61% and 100% of the purchase price to
Goodwill, while 63% of the transactions allocated between 11% and
60% of the purchase price to Goodwill, and the remaining 22% of the
transactions allocated less than 10% of the purchase price to
Goodwill. Further, the average allocation to Goodwill has declined
from 30% to 4% annually over the period 2021 through 2024.
How Ankura Can Help
The Ankura Life Sciencescapabilities extend across a wide range
of multi-disciplinary specialties. Ankura professionals leverage
the deep expertise across the firm to bring the appropriate
specialized resources to deliver solutions to complex problems. Our
Life Sciences Transaction Advisory Servicesblend in-depth analysis
with unmatched responsiveness and client service to provide our
clients with sound and thoughtful decision support. We have a
unique combination of both industry and transaction advisory
experience that sets us apart in the industry.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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