DotW: The Heat Is On

The temperature has been hot--and so has the deal-making. We counted at least 273 deals in the past five days. Not really. We actually stopped counting on Tuesday because there were already too many to keep track of. And that was before the week's biggest deals: the Ranbaxy/ Daiichi Sankyo and Invitrogen/ Applied Biosystems tie-ups (see below).

It's an odd week for heavy deal flow, coming so quickly on the heels of the ASCO and ADA meetings and in advance of next week's shin-dig in San Diego. But perhaps the soaring temperatures provided various biz dev teams no incentive to leave their nicely air-conditioned offices. And maybe this was a way for Invitrogen execs to ensure that the masses came to their tacos and beer party next week. (BIO Nebraska's Omaha steak fete and Positively Minnesota's raffle for a universal electronic charger offer stiff competition, after all.) Alternatively, it's possible staffers were simply jonesing to play BioRad's shoot-em-in gene transfer video game.

Other news hot off the computer screen? AstraZeneca is burning up the competition when it comes to market share in China, according to this Wall Street Journal article. And employees at Jazz Pharmaceuticals, Schering Plough, Mylan, GlaxoSmithKline, and Sanofi-Aventis are on the hot seat: all firms announced lay-offs this week. Perhaps the job cuts include the people responsible for the name of Sanofi-Aventis's new injectable insulin, Apidra. Doug Farrago, MD, a hilarious, disruptive physician, lambasts the company in this YouTube send-up.

Need to cool off? By all means, dive in to another edition of ...

Genentech/Symphogen: Danish polyclonal antibody play Symphogen said on Tuesday that it was collaborating with Genentech in the infectious disease space. The three-undisclosed-target deal has a total potential value of $330 million inclusive of an upfront payment, equity investment and milestones, and grants Genentech worldwide exclusive license to any candidates. This is the first external demonstration of Genentech’s stated commitment to developing large molecules against infectious diseases and Symphogen’s third deal, but by far the biggest validation of its Symplex and Sympress technologies.

Janssen/Astex: Johnson & Johnson’s Janssen Pharmaceutica is taking a license to Astex Therapeutics’ novel fibroblast growth factor receptor (FGFR) inhibitor program and is starting new discovery programs on two additional drug targets. The deal, announced Monday, sees Janssen paying $37 million in upfront, cash and equity payments and research funding to Astex as well as potential milestones and royalties. Janssen’s Ortho Biotech arm is responsible for all preclinical and clinical development on all three programs. Astex retains an option to co-commercialize any FGFR projects in the US. Astex CEO Harren Jhoti, PhD, told IN VIVO’s sister publication “The Pink Sheet” Daily that the lead FGFR program is only at the lead optimization stage but given the strong interest in the program—which, he says, is highly specific and should therefore avoid side effects that have hindered other firms’ efforts—“we were able to command pretty significant financials.”

Daiichi Sankyo/ Ranbaxy: On Wednesday, Daiichi announced it had agreed to buy a 34.8% stake in Ranbaxy from the Indian company's founders, the Singh family. The company will finance the acquisition--priced at a handsome 31% premium to Ranbaxy's closing price Tuesday--with a combination of cash and financing. Analysts reckon the combined company will be worth about $30 billion and called the transaction "bold and entirely out of character." Unlike Japanese brethren Takeda and Eisai, which have inked their own multi-billion dollar transactions in recent months to increase R&D capabilities and a US presence, Daiichi chose to invest in a company focused primarily on generics and geographically situated in a very important emerging market. The deal could also give Daiichi an important leg-up in its home generics business. According to an article published on in-Pharma technologist's website, Alan Thomas, IMS Japan's global account director, compared with the rest of the world, Japan has an extremely high proportion of brands that have come off patent - 41 per cent - but an extremely low generic penetration on the market - at only 3.4 per cent. And Japan's generics industry is expanding at an annual rate of nearly 9%. That may seem like small pills (er, potatoes), but it's currently the fastest growing segment of that country's drug business. Seems like there are now two clear schools of thought in pharma, those pursuing a focused approach (Bristol-Myers Squibb and Takeda have both made important moves in this direction) and those pursuing a diversified strategy – Novartis and now Daiichi. Perhaps Pfizer is interested in jumping on the diversified bandwagon? The Business Standard reported late Thursday that Pfizer may bid for the 65 per cent non-promoter stake in Ranbaxy.

UCB/ Otsuka Pharmaceuticals: Daiichi wasn't the only Japanese pharma gunning for a deal this week. The smaller company Otsuka Pharmaceuticals teamed up with UCB to co-promote the Belgian firm's anti-epileptic drug Keppra and the anti-TNF alpha drug, Cimzia for the treatment of Crohn's Disease. UCB and Otsuka will also co-develop and co-promote both medicines in other indications, while UCB will join Otsuka in co-promoting the anti-platelet agent Pletaal to selected accounts for a limited period. Deal terms were definitely on the small side: UCB receives up-front and milestone payments of up to €113 million, as well as funding for clinical development. Contrast that with Takeda's February deal with Amgen, where the deep-pocketed pharma paid out $300 million up-front, or the company's early April deal with Cell Genesys worth $50 million up-front and likely a great deal more for a Phase III immunotherapy product.

Invitrogen/ Applied Biosystems: Invitrogen offered to acquire Applera Corp.'s Applied Biosystems Group for $6.7 billion, in a move that would unite major players in the life-sciences tools field to create an end-to-end outfit that can tap into the very hot personalized medicine market. Applied Biosystems produces advanced instrumentation, while Invitrogen makes chemical kits that help analyze DNA samples. The companies hope that combining their specialties will better serve their overlapping customer base. Invitrogen CEO Greg Lucier said the complementary product lines would create a company "unrivaled in the world" for the breadth and depth of its life-sciences capabilities, but investors didn't buy the heady language, sending Invitrogen shares down $4.62, or 11%, to $38.73 Thursday. The WSJ reports that Alastair Mackay, of Garp Research & Securities Co. in Baltimore, said it isn't clear how well the merged entity will fend off competition from rivals such as Roche's Molecular Diagnostics division and Illumina. It's an interesting twist in what has been a long and storied history for Applera, which also owns Celera, once hoped to be a premiere pharmaceutical player that has retrenched to focus on diagnostics. The merger of Invitrogen and Applied Bio is consistent with a trend we've been watching for some time--the migration of tools companies into the testing market. (For more, read here.) Still, the new entity won't be competitive with Celera in the short run. Invitrogen/ Applied Bio signed a non-compete agreement with Celera in the specific areas where Celera is on or near market with products. Still executives claimed on the conference call announcing the news that this “won’t constrain the company” in terms of its diagnostic ambitions.

(Photo courtesy of Flikr user Roger Smith via a creative commons license.)