Wednesday, November 21, 2007

Deals of the Week: The Alice's Restaurant Edition [UPDATED]

This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why I called the post Deals of the Week.

You can get anything you want at the IN VIVO Blog.
You can get anything you want at the IN VIVO Blog.
Log right in, it's a click away.
Just a finger tap. You don't have to pay.
You can get anything you want at the IN VIVO Blog.

Now it all started three days ago--it's been three business days since our last DotW posting, but we decided it would be a friendly gesture for us to fill you in before the tryptophan coma sets in.

(News flash: The NY Times reports here on the possible health dangers of the annual holiday feast. Sadly, the palpitations induced by the requisite Thanksgiving toast were not mentioned. Thankfully, humorist Brian Unger has some helpful suggestions in this NPR podcast.)

In honor of the day, we hope you consider joining the IN VIVO Blog Movement. All you've got to do is walk into the office wherever you are, just walk in and say "You can get anything you want at the IN VIVO Blog." And walk out.

You know if one person, just one person does it, they might think he's really sick and they won't take him...And can you, can you imagine fifty people a day, I said fifty people a day (okay, we'd really like 1000) walking in, quoting a line from IN VIVO Blog and walking out?

And friends, they might think its a movement. And that's what it is, the IN VIVO Blog Movement.

Remember Deals of the Week? (This is a post about Deals of the Week.)

Without further ado, we bring you this week's installment: the Alice's Restaurant Edition. (Feel free to sing along in four part harmony. With feeling.)

  • Celgene/Pharmion: As pharma-land speculated on the fates of BiogenIdec and Genzyme, Celgene surprised the Street with its $2.9 billion cash and stock offer for Pharmion (35% cash, 65% equity, at an almost-50% premium to Friday’s close). As colleague Melanie Senior notes in this post, the deal makes exquisite sense, given Pharmion's six year relationship with Celgene for ex-US rights to the controversial cancer treatment thalidomide (Thalomid). While the acquisition certainly gives Celgene heft, it may also make the company even more attractive as a take-over candidate for desperate Big Pharma. One reason (described by Michael McCaughan in more detail here): Celgene's restricted distribution program for Thalomid is routinely cited by FDA as one of the few, clear successes in the industry. And as pharmas move into specialty areas where risk management is critical, having Celgene's in-house expertise could be a boon.
  • BiogenIdec/Neurimmune Therapeutics: As noted here, Neurimmune eschewed VC funding, opting instead for an undisclosed upfront and biodollars that could one day reach $390 million. (Another case of American blind justice?) Interestingly, this marks the third early stage neurodegenerative deal BiogenIdec has inked in the past 15 months. In August 2006, the biotech signed a deal worth up to $25 million with Amorfix, a Canadian theranostic company profiled in this START-UP article, for potential ALS therapeutics. And in September 2007, Biogen teamed up with the Brain Science Institute at Johns Hopkins University to identify and develop therapeutics for MS and Parkinson's and Alzheimer's Disease.
  • Olympus/Gyrus: When you plunk two billion buckaroos on the table, people tend to take notice--even if it isn't a particularly crowded or dynamic space. Tongues were wagging after Olympus announced its decision to acquire UK-based Gyrus, which makes visualization devices for use in minimally invasive surgery. It's interesting that Olympus appears willing to pay a premium—by some estimates up to 60%--for a publicly held company that has had its share of struggles. It's not clear what's driving the big dollar value. Perhaps Olympus's desire to dominate in the endoscopy market--or did they sense someone else was going to play? An FT article speculates that there may have been other suitors. Among the rumored contenders: Johnson & Johnson and Stryker. At the same time, Monday's deal clearly validates Gyrus' 2005 acquisition of ACMI, a merger that (as we wrote here) helped solidify Gyrus's position in a number of urologic and gynecologic categories.
  • Merck/ Nicholas Piramal: Call it the first step to off-shoring proof of concept. With the price of Phase II deals climbing ever higher, Merck took an unusual step this week to get POC compounds on the cheap. It's going to India. (Not China!) The company announced a deal with Nicholas Pirama India to research and develop new oncology drugs against two selected targets. Under the agreement, Nicholas Piramal will develop the targets from the discovery stage up to proof-of-concept and then hand them back to Merck, which will handle late-stage clinical trials and commercialization. For its work, Nicholas Piramal stands to receive milestone payments of up to $175 million per target, as well as royalties on sales of any products resulting from the collaboration. Here's the release.

And remember, you can get anything you want at the IN VIVO Blog.
(Excepting Roger)
Da da da da da da da dum
At the IN VIVO Blog.
(apologies to Arlo Guthrie)

UPDATE: Because excess is de rigueur at Thanksgiving, we give you this bonus deal, just announced: GSK has ponied up $1.65 billion for Reliant Pharmaceuticals, a privately held company focusing on in-licensing and developing late stage cardiovascular drugs. Reliant has four marketed products, including US rights to Lovaza, an omega-three derivative designed to treat high-triglyceride levels. Reliant's certainly had it's ups and downs: in 2005 the company tried to go public and failed and this past August it filed again for a public offering potentially worth $400 million (for our analysis of Reliant, see this IN VIVO article). Reliant's acquisition adds credence to our twin track IPO/M&A thesis: i.e when companies register for IPOs they are effectively putting themselves on the auction block. (Remember Adnexus?) In addition, it's the second spec pharma tie-up this week, coming just days after Celgene's take-out of Pharmion. It seem's likely that other spec pharmas could be acquired near-term. MGI is reportedly for sale, and there could be increased pressure on ProNovo BioPharma, the original developer and manufacturer of Lovaza, which still retains ex-US rights to the product. On a conference call this morning, ProNovo management refused to speculate on that possibility. One final note: ProNovo and Reliant aren't the only ones benefitting from GSK's deep pockets: the Boston Business Journal reports that Alkermes will receive $175 million when it sells its stake in Reliant to GSK. Not a bad Thanksgiving present, eh?

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