It’s official – oncology is king in the venture-backed world

Celgene’s acquisition of Delinia for $300m up front is the latest example of a clear trend that has emerged from the healthy stream of private company takeouts in the past five years: oncology has dominated the deal-making activity.

Companies focusing on the sector’s hottest therapy area tend to be sold in bigger deals and for higher returns than those working in other fields, an EP Vantage analysis has also found (see tables below). Delinia is a case in point – it has been established for little more than 12 months and only received one $35m series A injection, making this an impressive return on investment that its venture backers will no doubt be celebrating today.

The analysis above shows just how starkly oncology stands out among the therapy areas. Only companies where funding information is available were included – an article yesterday, which described a surge in total private company takeovers over the past few years, included a wider cohort (Private company takeovers buck bearish sector trend, January 25, 2017).

Only anti-infective companies have attracted close to the sort of deal values as oncology groups, although returns tend to be much smaller and of course there were far fewer transactions from which to draw conclusions.

CNS-focused companies are the second-largest group in terms of the number of deals, although it is clear that in this area backers face the risk of much smaller returns. Given the development problems that this field has faced this is not surprising.

Interestingly, however, oncology companies come around mid-field in terms of time to takeout. This analysis was conducted on a larger group of companies than above, as the established date is more readily available than historical funding. And, again, oncology represents by far the biggest cohort.

Of course this is the average over the past five years, and many will be hoping that these timelines have been shortening more recently. The pursuit of an “asset-centric” model – where companies are explicitly set up around one project to facilitate its eventual sale – should theoretically enable faster progress and timelier takeouts.

The analysis shows that oncology companies took on average almost six years from formation to a deal. This is a time horizon that many venture firms would be happy with. However, deals like Delinia will only serve to raise expectations for faster exits, and the pressure to deliver these could grow in the coming years.

Finally, below is a table of the top 10 returns of the past five years. This highlights a number of the caveats of this analysis, the main one being that private companies are under no obligation to announce how much money they have raised from investors. So, in many cases, these returns are likely to be overstated.

However, with oncology firms once again dominating this analysis, it seems that this therapy area is likely to benefit from a huge influx of funds in the coming years. Given the potential for seemingly improbable returns on investment, venture firms could find themselves unable to justify having no presence in this field.

The biggest returns
Acquiring company Target Therapy focus Multiple Year of deal
AstraZeneca Spirogen Onco & immuno 139 2013
Sumitomo Dainippon Pharma Boston Biomedical Onco & immuno 100 2012
Merck & Co Iomet Pharma Onco & immuno 33 2016
Novartis Selexys Blood 29 2016
Novartis CoStim  Onco & immuno 25 2014
Roche Seragon  Onco & immuno 24 2014
Johnson & Johnson Alios Biopharma Systemic anti-infectives 24 2014
Amgen Dezima Pharma Cardio 23 2015
AbbVie Stemcentrx Onco & immuno 21 2016
Bristol-Myers Squibb Flexus Biosciences Onco & immuno 21 2015


This analysis focuses on full company takeouts of EU or US-based private targets classified by EvaluatePharma as either pharmaceutical or biotech companies between 2012 and 2016.

The data were manually filtered to exclude established companies with marketed products, those not involved in new product R&D, and those not obviously supported by venture financing.

The takeout value for a company was derived from either the up-front portion of an acquisition where this was disclosed or whole value where details of the deal were not given. 

Therapy area was chosen using EvaluatePharma’s classifications of products at the time of acquisition. Selection was made either where a clear focus in a particular category was observed or where a key product was evident.

Venture capital totals are the sum of those rounds that have been disclosed by each company and captured by Evaluate.

To contact the writer of this story email Amy Brown or Edwin Elmhirst in London at or  follow @ByAmyBrown or @EPVantage on Twitter

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