It's been a record year for health-care mergers and acquisitions. But the traditional targets—biotech companies—haven't been the main event, as buyers have increasingly looked for overseas acquisitions in tax inversion strategies.
"While health-care M&A deal size year to date has surpassed any year in the last 10 years, multibillion-dollar biotech M&A has been fairly lackluster," Michael Yee, an analyst with RBC Capital Markets, wrote in a research note Sunday.
Roche's $8.3 billion deal for Brisbane, California-based InterMune, announced Sunday, is one of the few this year that returns to the traditional model of big pharma buying smaller biotech. Merck's purchase of hepatitis C drug developer Idenix Pharmaceuticals, for $3.85 billion—more than three times its value—was another.
With InterMune, Roche gets the drug Esbriet for idiopathic pulmonary fibrosis, a fatal lung-scarring disease with an unknown cause. About 100,000 people in the U.S. are estimated to have IPF, and it's typically fatal within three to five years of diagnosis, according to the National Institutes of Health.
Esbriet is approved in Europe and Canada and is expected by analysts to be cleared this year in the U.S. But it's been a rocky path here: the drug was rejected in 2010 and the Food and Drug Administration requested a new clinical trial. That study, called Ascend, was reported in February, and showed the drug reduced the risk of disease progression or death by 43 percent compared with placebo.
"It was this third trial, Ascend, that really made all the difference," Severin Schwan, Roche's chief executive, said in a telephone interview Sunday. It "showed this extremely encouraging data."