- within Food, Drugs, Healthcare and Life Sciences topic(s)
- with readers working within the Healthcare industries
Ankura is pleased to present the findings of our analysis of the allocation of the purchase price for transactions involving Pharmaceutical,Biotechnology,andotherLifeSciencescompanies during2021through2025 by U.S. based acquirers. Key takeaways are as follows:
As noted below, for the period 2021 through 2025, nearly 68%of the transactions analyzed allocated between 61% to 100%of the purchase price to In-ProcessR&D, while 23%of the transactions allocated between 11% to 60%of the purchase price to In-ProcessR&D, and the remaining 9%of the transactions allocatedlessthan10%of thepurchasepricetoIn-ProcessR&D.Peraccountingguidance,useful livesof In-Process R&Dintangibleswereclassifiedasanindefinite-lived.
As noted below, for the period 2021 through 2025, where both In-Process R&D and Developed Technologywere identified, nearly40%of the transactionsanalyzedallocatedbetween61%to100%of thepurchasepricetobothassetscombined,while53%of thetransactionsallocatedbetween11%to60%of thepurchasepricetobothIn-ProcessR&DandDevelopedTechnology,andtheremaining7%of the transactions allocatedlessthan10%of thepurchasepricetoIn-ProcessR&DandDevelopedTechnologycombined.
As noted below, for the period 2021 through 2025, 24%of the transactions analyzed allocated between 61% to 100%of thepurchase price toDevelopedTechnology, while61%of the transactions allocatedbetween11%to60%of thepurchaseprice toDevelopedTechnology, and theremaining15%of the transactions allocated less than 10%of the purchase price toDevelopedTechnology. Further, useful lives of DevelopedTechnology intangibles rangedbetween4-20years,withmost fallingbetween11-15years.
For the period 2021 through 2025, 15%of the transactions analyzed allocated between 61% to 100%of thepurchaseprice toGoodwill,while64%of the transactionsallocatedbetween11%to60%of the purchasepricetoGoodwill,andtheremaining21%of thetransactionsallocatedlessthan10%of thepurchasepriceto Goodwill.Further, theaverageallocation toGoodwill has declined from30%to11%annuallyover theperiod 2021through2025.
Ankura also analyzed the transactions for individual fiscal years from 2021 till 2025 and observed results similar to consolidated fiscal years during 2021 through 2025. Below are the key takeaways based on the observed results for analyzed transactions for the individual years 2021, 2022, 2023, 2024, and 2025, respectively.
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.
[View Source]