Friday, December 21, 2007

Deals of the Week: The Christmas Edition

'Twas four days before Christmas and all through the house, not a creature was stirring except for...the biz dev teams at several major pharmaceutical companies. My, has it been a busy week for those folks.

It's almost as if the Ghost of Christmas Yet to Come paid them a visit, offering a cautionary tale of the industry's fate 20 years hence: A graveyard filled with names like Pfizer, GlaxoSmithKline, and Eli Lilly. Perhaps, not wanting to be boiled in their own puddings or buried with stakes of holly through their hearts, the good folks at Big Pharma decided to spread some Christmas cheer via deal-making. (Or maybe they just needed a little retail therapy.) Without further ado:

Pfizer/CovX: Pfizer announced Tuesday it was buying the privately held next-generation protein play CovX for an undisclosed sum. The La Jolla-based biotech has developed a platform technology that links therapeutic peptides to antibody scaffolds. Already the company has three early stage compounds, one in diabetes and two in oncology. "The deal demonstrates Pfizer's ongoing commitment to build a competitive biotherapeutics enterprise, " said Corey Goodman, PhD, president of Pfizer's Biotherapeutic and Bioinnovation Center, in a press release. The acquisition bolsters Pfizer's large molecule discovery capabilities, but probably doesn't constitute an engine ala Bristol-Myers acquisition of Adnexus. As we wrote here, Pfizer appears to be a big believer in acquiring biologics capabilities through a serial acquisition strategy. Among its recent deals: the acquisitions of PowderMed, Rinat, Biorexis, and Bioren.
Merck-Serono/Idera & Merck-Serono/Flamel: Merck-Serono inked two deals this week. The first with TLR player Idera for two TLR9 compounds in the oncology space worth $40 million up-front and an additional $381 million in milestones. Not too surprisingly, shares of Idera surged on the news. It's the only big deal the biotech has inked in 2007: the company's last deal came about a year ago, when it signed a partnership with the other Merck worth $30 million in upfront payments. Merck-Serono also announced a collaboration with Flamel Technologies, which has developed a polymer drug-delivery technology called Medusa that can extend the activity of therapeutic proteins. Deal terms were small: just $2 million for investigating a protein in Merck-Serono's portfolio, as well as Flamel's R&D costs. This is the fifth deal Flamel has signed in 2007. Three months ago, it agreed to develop a controlled-release version of a protein for Wyeth.
Lilly/Ambrx & Lilly/BioMS & Lilly/Galapagos: Clearly Lilly execs took the Ghost of Christmas Yet to Come's message to heart. This pharma wins the honor for signing the most pre-Christmas deals, inking three this week alone. (And that doesn't count the news that Sidney Taurel, the pharma's pugnacious CEO and chairman, will cede his CEO hat to the friendly giant John Lechleiter, PhD, currently the company's president and COO.) On Monday, the company signed a research collaboration with Ambrx, a protein engineering company, for an undisclosed upfront fee and milestones. The deal builds on an existing collaboration signed by the two companies at the beginning of 2007. And Lilly execs should be quite familier with Ambrx: one of the biotech's co-founders, Richard DiMarchi, now a chemistry professor at Indiana University, spent two decades at Lilly as a VP of Biotechnology. On Tuesday, Lilly signed a rich licensing deal with the Canadian drug company BioMS for its multiple sclerosis therapeutic MBP8298. As part of the deal, Lilly will pay BioMS an $87 million up-front fee plus milestone payments that could reach $410 million. The two companies will share development costs, while Lilly will take over world-wide marketing. Finally, on Wednesday Lilly announced a smaller deal with Galapagos to develop potential new medicines for the treatment of osteoporosis. Galapagos will be responsible for discovering and developing drug candidates through proof-of-concept, at which time Lilly has the option to develop and commercialize them on a world-wide basis. Lilly, of course, has a great deal of expertise in osteoporosis thanks to its experience developing Evista, Forteo, and arzoxifene.
Medtronic/Weigao: On the device side, Medtronic, which has been beset by bad news associated with its defibrillator, announced Monday it was purchasing a 15% equity stake in Shandong Weigao Group Medical Polymer Company (Weigao) for $221 million. In addition, the two companies will form a JV to market therapies in the spine and orthopedic sectors. "China is key to our global strategy as we continue to expand our geographic footprint," said Medtronic president and CEO Bill Hawkins in a press release. Hawkins' comments echo those of many pharma execs. China remains an alluring prospect for both western drugs and devices, in part because of predictions that by 2020 it will vault to second in pharmaceutical market size with a market of $120 billion according to IMS Health. (Look for more on China's fledgling biotech industry in an up-coming START-UP.)

No comments: