As the dog days of summer come to an end, it's time for last-minute barbeques and beach trips before the frenetic fall calendar of investor and scientific meetings commences. It's been a week filled with news--though not necessarily of the biobucks variety.
BMS/PDL: PDL BioPharma is a biotech that has been dogged by troubles, but the company announced a bit of good news this week: the company partnered its Phase I antibody for multiple myeloma, elotuzumab (formerly known by the tongue-tripping moniker HuLuc63), to BMS in a deal worth a modest $30 million up-front and up to $480 million in additional development and regulatory milestones. The deal also gives BMS an option to expand the collaboration to include PDL241, another antibody still in preclinical trials. The deal is back-end loaded, requiring PDL to complete on-going Phase I studies and provide support for Phase II trials, but does allow for profit-sharing on elotuzumab sales in the US. (Outside the US, PDL will receive undisclosed sales royalties.) Still investors are likely to view the news as positive given the risky nature of elotuzumab, a first-in-class therapeutic that binds to a cell-surface protein called CS-1 that's found selectively on myeloma cells. And the announcement deflects concerns about recent or impending staff departures: Pat Gage, PDL's CEO left in late May and the company's CSO,
TEVA/Cel-Sci: Cel-Sci announced Tuesday that it gave Teva the OK to market and distribute it's head and neck cancer drug Multikine in Israel and Turkey. Precise financial details weren't disclosed but once the drug has been approved, Cel-Sci will make the product, while the Israel giant will be responsible for sales. Teva will also participate in the global Phase III clinical trial and fund a portion of the studies. The stock bounced on the news but sharply retreated on a day generally associated with market turmoil. The steep drop prompted Geert Kersten, Cel-Sci's CEO to issue a letter to shareholders, saying:
You asked, "How is it possible that the stock can be down after such a good announcement?" As the company's largest shareholder...I am as puzzled andas disappointed as you.
We've noted before that licensing deals don't always give company stock prices a much needed bump. But in this case, Kersten and others believe something nefarious may be afoot as short sellers "painted the tape," illegally dumping large volumes of the stock just before the close of business August 19 in order to make the stock look weak and unattractive. Kersten implores his shareholders to contact their congressional representatives to convince regulators to delve into the trading records of the last several weeks to resolve the issue. Meantime The IN VIVO Blog will continue to follow the situation and update you with any further news.
Lilly/Monsanto: Lilly continues to pursue a diversified business strategy, announcing late Wednesday that it would pay $300 million for rights to Monsanto's synthetic milk-producing hormone, Posilac, which is better known as recombinant bovine somatotropin (rBST). In addition to global sales rights, Lilly also obtains the Georgia-based manufacturing plant as part of the deal. The announcement comes at at time of growing consumer opposition to the use of hormones, particularly in dairy and meat products. Still, for many pharmaceutical companies, the looming threats of patent expiries and increased regulatory scrutiny make diversified business models built on generics or consumer products-a la Novartis's stake in Alcon and Daiichi's purchase of a controlling interest in Ranbaxy--more attractive. And Lilly has showed in other ways its interest in mitigating risk. Earlier this summer, it partnered its Phase III Alzheimer's drug with private-equity play TPG-Axon and Quintile's NovaQuest unit and off-loaded its R&D risk by teaming up with Covance. For its own part, Monsanto's decision to sell-off Posilac is in keeping with a stated mission to divest of smaller animal units in order to concentrate efforts on popular crop-agriculture product lines, including the herbicide Roundup.
King/Alpharma: Latebreaker! King Pharmaceuticals takes top dog in biobucks this week with its $1.4 billion unsolicited bid to acquire Alpharma. The Tennessee-based specialty pharma is behaving more like a dog with a bone, threatening to turn hostile if Alpharma's board refuses to accept the bid, which it apparently presented to the company in early August. Alpharma execs weren't available for comment--of course--but Reuters reports that the company appears to have rejected the bid. King's offer of $33 a share represents a 37% premium over the $24.04 closing price of Alpharma's stock on August 21. Not too surprisingly, Alpharma shares surged 41% premarket to $34, while King fell 1% to $11.12. By disclosing the rejected bid, King appears to be putting pressure on Alpharma in hopes of completing a friendly deal. That King is willing to go to extreme measures shows its desperation. Earlier this month, King reported that its second-quarter net income tumbled 34% as sales of its blood-pressure drug Altace stalled thanks to competition from generics. After losing a patent case last year, King has sought to refocus its portfolio with an emphasis on pain therapeutics. With its extended release morphine product Kadian and the NSAID containing Flector patch, Alpharma would give King several branded products in this arena.
(Photo courtesy of Flickr user NinJA999 courtesy of a creative commons license.)