Trillium buyout keeps premiums keen

When reading the chart above it is worth bearing in mind that the distinction between commercial and R&D-stage companies is not as clear as it might first seem. A developer that has only just undertaken its first launch is technically commercial, but if its product still has a long development path ahead a buyout can be struck at the sort of level more typically seen with R&D-stage deals.

One such example is Menarini’s acquisition of Stemline – struck at a 130% premium – shortly after Stemline launched Elzonris. The drug was approved for a very rare type of leukaemia but the value of the deal reflected a much larger potential market.

Overall, these data suggest that buyers remain prepared to pay up for research-stage companies, which continue to attract some punchy premiums. And while the average for commercial-stage developers is lower there is some evidence of price inflation here: some of the biggest premiums in this cohort have emerged in the last couple of years, the table below shows.

It is also worth noting that reading premiums is far from straightforward, as a triple-digit number does not necessarily mean that competition for the target was high. Buyouts of developers that have recently suffered a setback or a period of disappointing share price performance can also see big upticks on the recent share price. Merck’s move on Immune Design, at a 247% premium, falls into this camp.

Some investors had argued that Trillium was undervalued before Pfizer’s move, given its presence in the anti-CD47 space, a hot oncology target that has prompted other large deals. Presumably Trillium's backers are happy with the 170% premium that emerged, however: that figure ranks seventh largest, after the top five deals highlighted below.