It's that time of year. Time for making merry with wassail, carbohydrates, and Tiny Tim-isms. In the spirit of inclusion, it's tempting to spit "Bah, Humbug," but Joe Lieberman beat us to it.
Perhaps three ghosts will haunt the Connecticut Senator in the coming days to convince him the public option and Medicare buy-in are causes worth supporting. If not, there's always Al Franken, who doused Lieberman's discourse with a well executed bang of the gavel on Thursday.
Health care reform isn't quite dead as a doornail, but it's been a week of few real accomplishments for the legislative branch of our government. That's not the case for our industry's deal-makers, who heeded last week's post and embarked upon some holiday shopping. Indeed, by our count there were more than 18 biopharma M&A and licensing deals announced between Monday and Friday morning, a new record here at IN VIVO Blog.
Finally, a biotech economic stimulus plan! Or is this simply a desire -- made more enjoyable by a signed term sheet -- to get out of Dodge for a couple of weeks? Either way, we commend them for avoiding the last minute holiday shopping frenzy and the extra costs of overnight shipping.
It's the twelve days of Christmas plus eight crazy Hannukah nights all in one ecumenical package waiting to be unwrapped under the cozy glow of a Kwanzaa candelabra. (If you need more light, feel free to fire up the menorah and plug in the ol' Tannenbaum.)
Without further ado, we bring you another naughty-yet-nice edition of ...
Johnson & Johnson/Acclarent: On the first day of Chrismahanukwanzakah, my true love gave to me not a partridge in a pear tree (potentially messy, and what to do with all that fruit?) but $785 million. J&J strikes again, with its Ethicon division taking out privately-held Acclarent in an all-cash offer to boost its presence in a hot market: ear, nose and throat treatments. Acclarent makes a balloon-catheter system that is gradually inflated to treat blocked nasal passages for use in sinus surgery, and the start-up's Balloon Sinuplasty technology and Relieva product portfolio have been approved for use by FDA since 2005. Once again J&J is acting opportunistically to acquire businesses where it sees growth, such as in Alzheimer's, via its Elan deal (a DOTY candidate), and vaccines, provided by its 18% purchase of Crucell. By establishing Ethicon in the large emerging ENT space, the diversified pharma is hoping to reverse a biz which has declined largely as the result of Cordis' loss of market share in drug-eluting stents. The deal also validates the involvement of corporate venture. JJDC, J&J's venture arm, began investing in Acclarent about a year ago as part of a broader strategy to be more strategic in its venturing. -- EFL
Merck/Avecia & Merck/Pfenex: On the second day of Chrismahanukwanzakah, Merck's business team brought home not two French hens, which would have been nice, but two deals to kickstart the firm's biologics manufacturing capacity. A year after shaking up the marketplace with the announcement that it was building a unit dedicated to me-better and follow-on biologics, Merck this week started to bring home the goods. On Monday the big pharma signed a $52 million licensing deal with Pfenex, which only recently spun out of Dow Chemical, to access the biotech's Pseudomonas-derived protein expression technology to develop an undisclosed vaccine. On Thursday, Merck announced it was buying a contract manufacturing organization, Avecia Biologics, for an undisclosed amount, gaining a fully operational facility with four manufacturing streams and 500 employees. Add these plants to the facility Merck bought in February, when it paid Insmed $130 million for its 50,000 square-foot biologics plant staffed by 70 workers . (That deal also included four follow-on biologics.) Merck is wise to grab capacity from the start; bringing biologics plants on-line is costly and time-consuming, and the company has ambitious goals, including the launch of at least six biologic drugs six between 2012 and 2017. -- EFL
Hospira/Orchid Pharmaceuticals: On the third day of Chrismahanukwanzakah, we took a break and instead celebrated Diwali a bit late. It's the thought that counts. Hospira joined us and swooped up Chennai, India-based Orchid Chemicals & Pharmaceuticals' generic injectable drug business for $400 million on Dec. 15, gaining a much-wanted hospital-based medicines business. The move is part of Hospira's effort to broaden its therapeutic coverage. The deal gives Hospira Orchid's beta-lactam antibiotics portfolio and pipeline and facilities, including both manufacturing and R&D operations, and roughly 450 staff. Orchid's product range includes injectable cephalosporins and penems and so far has chalked up sales of around $90 million this year, along with earnings before tax of $35 to 40 million. Hospira already sells seven of Orchid's antibiotics products on a profit-sharing basis in the U.S. and Europe, with a profit margin of nearly 30%. Thus this week's acquisition is the next step in the evolution of an already successful partnership. --Vikas Dandekar and Daniel Poppy
Cubist/Calixa: Cubist Pharmaceuticals, the marketer of Cubicin, fulfilled the holiday wishes of investors -- oh, those pesky calling birds -- and made good on a promise to acquire a late-stage asset to enhance its pipeline. On Monday, Dec. 14, the biotech agreed to pay $92.5 million in upfront cash to acquire privately held Calixa Therapeutics and its Phase II antibiotic CXA-101. The transaction shows how companies are pushing forward with the development of new antibiotics, despite no formal FDA guidance for clinical trials of anti-bacterial medicines in certain key indications. There's been much focus on Calixa's CXA-101, but the key to this deal, which could deliver up to $310 million in milestones to Calixa's venture backers, is actually Phase I candidate CXA-201. This compound combines CXA-101, a novel cephalosporin, with tazobactam, a beta-lactamase inhibitor that is a component of Pfizer/Wyeth's antibiotic Zosyn. While '101 currently is in Phase II studies as treatment for complex urinary tract infections, Cubist thinks the drug's greatest potential is the '201 formulation in drug-resistant, gram-negative infections, especially those involving the pathogen Pseudomonas aeruginosa. -- Joseph Haas
GlaxoSmithKline/NanoBio: Five golden rings for privately-held NanoBio this week! The biotech, which has spent the last decade developing a novel nano-emulsion drug delivery technology, announced its first deal: an exclusive license with Glaxo to develop an OTC version of its proprietary, Phase III-ready cold sore medicine, NB-001, in the U.S. and Canada. The deal isn't noteworthy for its terms; the upfront is a hardly staggering $14.5 million (which could increase to $55.5 million based on undisclosed development milestones). And NanoBio continues to shoulder the cost and risk of the Phase III development program. More interesting is the commercial strategy NanoBio intends for NB-001: skipping the prescription market and aiming straight for OTC distribution with GSK's help. According to NanoBio CEO James Baker it's the most logical approach given the current market for therapeutics for cold sores, aesthetic nuisances that don't warrant the time and expense of a doctor's visit. And NanoBio couldn't have picked a better partner than Glaxo, which already markets the number one OTC medicine for cold sores, Abreva. The deal fits nicely with Glaxo's determined push to invest more R&D dollars in its consumer health business, and continues to show the drug marker's renewed interest in dermatology, once considered a therapeutic backwater. -- EFL
Takeda (Millennium)/Seattle Genetics: Just days after Roche/Genentech abandoned Seattle Genetics under the mistletoe, unimpressed by the biotech's dacetuzumab, a CD40 antibody in development for lymphomas and multiple myeloma, the cash-rich Seattle-based biotech shook off the rejection and reapplied its lipstick. Lo and behold, who should appear but another angel of deal-making, Takeda's Millennium oncology unit. Takeda, which has bet heavily on oncology as one of its future areas of growth, didn't take Rochentech's leftovers, however. Millennium was more interested in brentuximab vedotin (SGN-35), a next-generation antibody-drug conjugate in Phase II/III development for lymphomas. And Millennium was feeling generous (ah, the fabled Chrismahanukwanzakah spirit!) giving Seattle Genetics $60 million upfront for exclusive rights outside the U.S. and Canada plus up to $230 million in additional progress- and sales-based milestones. The companies will split the cost of developing B vedotin 50/50, with Takeda expected to contribute at least $75 million over the first three years. Takeda will also be solely responsible for developing the drug in Japan. Until its 2008 acquisition by Takeda, Millennium was a U.S.-only biotech. But as it has become Takeda's center of oncology expertise, it has also sought to build its commercial infrastructure abroad via transactions like the May acquisition of IDM Pharma to access Mepact, an osteosarcoma treatment approved in Europe but not yet available in the U.S. -- Jessica Merrill & EFL
Amgen/Array: Lords a'leapin'! You want proof deal values are on the rise? Look no further than Array BioPharma's tie-up with Amgen this week. The Big Biotech ponied up serious upfront cash, $60 million, for Array's Phase I glucokinase activator, ARRY-403, being developed to treat Type 2 diabetes. Beyond '403, Amgen and Array are teaming up to identify and advance second-generation glucokinase activators in a two-year research deal that requires Amgen to foot the bill. In addition, Array stands to realize up to $666 million in clinical and commercial milestones, although some are pegged to at least one backup compound reaching market in addition to '403. Finally, if '403 does reach the market, Array will receive double-digit royalties on sales and retains a U.S. co-promote option. At first blush, Amgen as a diabetes developer might be a head-scratcher, but the biotech has made an effort to diversify its pipeline away from its historical focus of oncology to include other primary care areas such as osteoporosis (denosumab, anyone?). The disconcerting surge in Type 2 diabetes in the U.S. makes the metabolic disease arena another area of interest, despite potential regulatory hurdles. Indeed, Amgen has two oral molecules of its own -- AMG 221 and AMG222 -- in early to middle clinical trials for Type 2 diabetes. -- JH
Astellas/Ambit: Ambit Biosciences of San Diego could earn up to $350 million in milestones on top of $40 million upfront from Astellas Pharma to jointly develop and commercialize FLT3 kinase inhibitors in oncology and non-oncology indications. The partnership, announced Dec. 18, includes Ambit's lead investigational drug AC220, which started Phase II trials earlier this month in relapsed/refractory acute myeloid leukemia, and other undisclosed FLT3 kinase inhibitors. It's the third oncology partnership signed by Astellas with a U.S. biotech in as many months. Ambit could receive post-approval milestone payments upon certain sales thresholds, as well as tiered double-digit royalties on net sales. The companies will share equally in U.S. profits and losses, and Ambit will have the option to co-promote in the U.S. -- Carlene Olsen
Forest/Almirall: Forest Laboratories on Thursday hung a few ornaments on Almirall's tree, paying $75 million up-front for U.S. rights to the Phase II, inhaled, once-daily, long-acting beta agonist LAS100977. The drug will be developed in combination with a corticosteroid for asthma and chronic obstructive pulmonary disease (COPD), using Almirall's multi-dose dry-powder inhaler, Genuair. Forest also has agreed to pay undisclosed milestones and sales-based royalties around LAS100977, and will assume the majority of development costs. The agreement -- including its rich up-front -- comes even though the last compound Forest licensed from the mid-sized Spanish group, the long-acting muscarinic antagonist Eklira, disappointed in late-stage COPD trials. The U.S. group is scrambling to expand its respiratory franchise as leading anxiety/depression drug Lexapro faces patent expiry. In August, the U.S. group paid $100 million up front for U.S. rights to Nycomed's phosphodiesterase-4 enzyme inhibitor Daxas (roflumilast) for COPD, for which an NDA was filed in July. Although the tie-up helps Almirall claw back credibility since the set-back to aclidinium (a drug widely perceived as a potential blockbuster that could transform the mid-sized group) it doesn't put the partners first in the once-daily LABA/ICS race. GSK and partner Theravance own that honor, closely followed by Novartis. -- Melanie Senior
Eisai/AkaRx: Not to be left out of the party, Eisai piped, danced and drummed a merry tune this week and exercised its option to acquire AkaRx for $255 million. The fourth largest Japanese drugmaker obtained the right when it acquired MGI Pharma for $3.9 billion in 2007. That same year, long before option-to-acquire deals became popular, MGI Pharma struck its arrangement with privately-held AkaRx, which spun out of another Japanese firm, Astellas Pharma. At the time, MGI paid $45 million to buy the company anytime before Jan. 8, 2010 for the $255 million offer price. The deal provides a very tidy exit for AkaRx's backers -- Astellas Ventures, InterWest, and Sutter Hill -- who invested $11.1 million in 2005. Apparently Eisai, which has made oncology a big part of its growth strategy, wanted exclusive rights to AKR-501, an orally available small molecule to treat thrombocytopenia, a side-effect of chemo. -- EFL
Silence Therapeutics/Intradigm: Santa Claus has his favorite ruminant-enabled aerosol-propelled delivery mechanism, but even he can't deliver short interfering RNA molecules to their targets. With their inherent instability, the promise of siRNAs will only go as far as they can travel in the body without breaking up. That's one reason the folks at Silence and Intradigm are merging. Based in London, Silence is buying Intradigm of Palo Alto, Calif. with nearly 80 million shares. A mix of investors from each side, plus some new ones, will buy £15 million in new shares at 23 pence per. The deal leaves Intradigm investors with 37% of the newco, to be called Silence, and three of eight board seats. Intradigm CEO Phil Haworth, who will keep the same title, says the modus operandi of the deal is to bring two distinct delivery platforms together. Silence works with liposome technology, Intradigm with polymers that bind to siRNA molecules and increase payload. Combined, the technologies might issue what Haworth calls "a whole new set of delivery tools," which will be Silence's main focus next year using the cash it's raised with the merger. -- Alex Lash
Biogen Idec/Facet Biotech: And on the last day of Chrismahanukwanzakah, things got complicated. Its a deal, even two, wrapped inside a No Deal, that might lead to an even bigger deal. Wednesday at midnight Biogen officially ended its $450 million, $17.50-a-share hostile bid for its MS development partner Facet. That's the No-Deal part. But Facet strengthened its defense by giving its top two shareholders permission to boost their holdings above 15% without triggering a poison-pill plan. Facet's board launched the plan in September as a response to Biogen's first hostile bid of $14.50-a-share, or $355 million. There was even more quid for the quo: The investors, Baupost Group and Biotechnology Value Fund, agreed that if they do exceed the 15% limit they will vote any shares above that threshold either in proportion with other Facet shareholders or according to the direction of the Facet board in future voting situations. And they can't go higher than 20%. And the potential bigger deal: Facet has asked its bankers to solicit other bids. Will anyone go higher than $450 million, even with Biogen holding 50% of the rights to Facet's top two drug candidates? Whether third parties jump in or not, Facet officials say Biogen is welcome to rejoin the fray. -- Alex Lash