Friday, August 28, 2009

DotW: Back to school, back to work

It's back to school week in this blogger's neck of the woods, and the smell of freshly sharpened pencils and new notebooks must have prompted some biz dev execs to ink some deals after last week's hiatus. We're glad because it would have taken real work to create a "biz dev exec's day off" post a la Ferris.

But after the Monday flurry of deal-making tapered off, the focus centered yet again on fantasy industry tie-ups. After last week's rumor that Teva is looking hard at Shire (to which we ask, why not Genzyme?) came "news" that Viropharma might be another take-out candidate favored by the Israeli giant. Natch.

And then there's talk that GSK is mulling the advantages of owning HGS, a company that looks far more attractive after the release of positive news associated with its lupus drug, Benlysta. The proposed offer price being floated--$30 a share, or around $4 billion. (That's Manny Ramirez kind of money.)

Fantasy M&A not compelling enough for you? There was plenty of political infighting regarding health care reform, even as the country took a brief breather to mourn the sad passing of the lion of the legislature, Senator Edward Kennedy.

Or you could begin stockpiling hand sanitizer as call the doctor's office to schedule flu shots for the family. Just make sure to include the H1N1 version; new data from the Southern Hemisphere indicates this will be the strain most likely to cause problems this time around.

Did you indulge in a week of wishful thinking? We're here to bring you back to reality with another edition of

Biovail/Santhera: Having struct two separate deals in the last 12 months to gain control of Huntington's chorea treatment Xenazine, Biovail increased its footprint in the central nervous system space through a licensing deal Aug. 24 with Santhera Pharmaceuticals. Under the transaction, Toronto-based Biovail gets North American rights to fipamezole, a Phase II compound for dyskinesia associated with Parkinson’s disease. The Swiss biotech gets $8 million upfront, plus another $4 million contingent on the closure of its planned acquisition of another company, Juvantia, which originally developed the drug. Of course, there's a laundry list of "bio-bucks", too, to drive the deal's price tag into an eye-catching realm. Santhera retains European and Asian rights to fipamezole, as well as an option to co-promote the drug in the U.S. (You see, those co-promotes aren’t going away.) Santhera's CEO Klaus Schollmeier said the biotech hopes to eventually market fipamezole alongside Cantera, its Friedrich’s ataxia drug currently approved in Canada. Biovail, meanwhile, continues to build its CNS franchise around Xenazine, which it markets in Canada under the name Nitoman. The Canadian specialty pharma locked up rights to the drug via a series of deals beginning with its acquisition last year of Prestwick, which had, in turn, out-licensed U.S. commercial rights to the product to Ovation Pharmaceuticals (also purchase earlier this year, by European CNS developer Lundbeck) This spring Biovail plunked down an additional $230 million to purchase tetrabenazine products and intellectual property from the Dublin-based Cambridge Laboratories.—Joseph Haas

Proctor & Gamble/Warner Chilcott: Biovail wasn’t the only biopharmaceutical company outside the U.S. to pull off a significant deal this past week. Ireland’s Warner Chilcott wins this week’s DOTW big spender award—and our gratitude for starting the week on a positive biz dev note--by buying out P&G’s entire pharmaceutical business in a deal worth $3.1 billion. The move means the Cincinnati behemoth, perhaps most famous for creating daytime television shows like “Guiding Light” and “As The World Turns” to showcase its products (haven’t you always wondered why people call them soap operas? Of course, the good clean fun), will redevote itself to the now highly desirable consumer products biz. Warner Chilcott, meanwhile, adds significantly to its sales force while also bolstering its women’s products portfolio through the additional of P&G’s Actonel and Asacol HD. Both of those products could face generic competition by 2014, however, so Warner Chilcott needs to move fast to take full advantage of them. Importantly, the transaction seems to further the Irish spec pharma’s global ambitions, providing a commercial presence in 14 new countries and a 1200-person strong sales force based in Western Europe. While dear, the deal’s price-tag wasn’t shockingly high, representing roughly four times the 2008 net income generated by P&G’s Rx products. – Carlene Olsen

Ligand/Neurogen: Our “Low Money Down, Some Money Later…Maybe” award goes to Ligand, which this week announced plans to buy Neurogen for $11 million plus earn-outs, despite a lack of fit—at least when it comes to therapeutic focus-- between the two companies. The deal comes out to about 16 cents a share, the companies said, six cents below Neurogen’s opening-bell price on Aug. 24, the day the deal was announced. Both companies’ boards have approved the sale, but the transaction still requires the approval of Neurogen’s shareholders. Neurogen shares were still trading above the offer price when the Nasdaq market closed Aug. 27, up 5% on the day to $0.21. If the deal is approved, Neurogen owners will swap each share for .06 of a Ligand share, or approximately 3% ownership in their acquirer. Neurogen shareholders, meanwhile, will also have to hope Ligand can partner the neurology assets it picks up in the sale--at least if they want to see the deal's price tag go up another $7 million. If Ligand oulicenses Neurogen’s preclinical H3 antagonist program shareholders get $4 million – likewise if that program’s intellectual property is sold, Neurogen shareholders get half the proceeds. In addition, if Neurogen’s VR1 antagonist MK2295 – already partnered with Merck – advances to Phase III, its shareholders would get $3 million, or 50% of the proceeds if the related IP is sold off. – Alex Lash

Shire/Santaris Pharma: Even as investors speculated Shire might be the next jewel in Teva's crown, the company sought to become one of the industry's RNA players, inking an R&D agreement with privately-held Santaris to gain access to the biotech's proprietary Locked Nucleic Acid technology. Given Shire's interest in rare diseases via its Human Genetic Therapies division (you know the one that's been in the news for developing a competitor to Genzyme's troubled Gaucher drug Cerezyme), the focus of the Santaris/Shire tie-up is to develop new therapies for a range of rare diseases that are currently impossible to treat with more standard enzyme replacement therapy. As part of the joint research project, Santaris will deisgn, develop, and deliver preclinical RNAs against three preselected Shire targets, with Shire having the right to develop and commercialize these compounds on a world-wide basis. Financial terms of the agreement, which have Shire paying an upfront fee of $6.5 million, some undisclosed discovery funding, and potentially another $13.5 million if initial studies pan out, are in-line with prior R&D agreements Santaris has signed. In 2007, for instance, GSK put Santaris in charge of discovering up to four RNA antagonists for viral diseases and developing them through proof-of-concept in an option-based deal that garnered the biotech an upfront fee of $3 million and a commitment from the Big Pharma to make a $5 million equity investment. In early 2009, just before it announced its acquisition by Pfizer, Wyeth signed a similar deal, paying Santaris $7 million upfront and taking $10 million in equity in exchange for the biotech's expertise developing RNA therapeutics against 10 targets of interest.--Ellen Foster Licking

Image courtesy of flickrer busymommy used with permission through a creative commons license.

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