DOTW: Fireworks

Ahead of the U.S.’s birthday celebration and the required playing of Stars and Stripes Forever and the 1812 Overture, biopharma dealmakers this week set off some fireworks of their own.
The biggest confirmed acquisition of the week was Celgene’s $2.9 billion take-out of Abraxis Biosciences, the developer of a novel nanoparticle-formulation of paclitaxel called Abraxane (see below).

Not to be outdone, Sanofi-Aventis may be getting ready for its own light show. On the eve of a long holiday weekend, Bloomberg reported the French drug maker was in discussions to acquire an unnamed U.S.biopharma company for $20 billion. Perhaps a Bastille Day announcement awaits? (Or maybe Viehbacher wants to ruin the holiday weekend for us hardworking stateside journos…)

IN VIVO Blog’s Magic 8-Ball rattled off a number of potential candidates, but none of them are perfect. Biogen Idec? Come on, why would Icahn Partners have gone to all that trouble to find a CEO it could work with? Vertex? Sanofi doesn’t have much of a presence in antivirals, but we suppose the Vertex offerings could be combined with the vaccines biz.

What about Allergan? Hmm...an intriguing possibility. It would bolster the company’s interest in ophthalmology and diversify Sanofi into devices. But with Allergan's $18 billion market cap, deal terms would need to be richer. It's unlikely to be Celgene for the same reason, though it would be a coup for Sanofi's recently created oncology business unit. Cephalon might be a fit but $20 billion or more would be an extremely generous premium. On the private side, what about Purdue Pharma, which has recently been presenting at investor conferences, perhaps as a prelude to an IPO or a sale?

With Sanofi’s aggressive diversification there are a host of consumer and generics players that could fetch a $15 billion to $20 billion price tag. And it’s not out of the realm of possibility that the drug maker is considering a diabetes device outfit, given its desire to become an end-to-end solutions provider.

We've all run enough things up the flagpole for today. Now it’s time to enjoy the stars and stripes with BBQs, fireworks, and IVB’s favorite beverage of choice, a cool Anchor Steam. As you enjoy the weekend’s pyrotechnics, here’s a review of this week’s firecrackers, sparklers, and rockets.


AstraZeneca/Medicines for Malaria Venture: Following recent Big Pharma deals with Pfizer and Merck to develop malaria vaccines, Medicines for Malaria Venture announced a tie-up with AstraZeneca June 28 under which the non-profit will get no-charge screening access to about 500,000 AZ proprietary compounds to see if they have potential as anti-malarials. The collaboration involves no upfront financials, but if MMV researchers identify compounds with promise, the two parties will negotiate terms for co-development, an AstraZeneca spokesman told "The Pink Sheet" DAILY. Not only does it want to help find therapies for malaria, but AstraZeneca also considers its work with MMV as a way to see compounds it has already discovered have potential outside of the clinical areas in which the pharma specializes, which is an echo of AZ's July 2009 tie-up with Alcon in ophthalmology. --Joseph Haas

Sanofi-Aventis/TargeGen: Sanofi has purchased privately-held TargeGen for $75 million upfront and another $485 million in milestones to gain access to the biotech’s Phase III myelofibrosis drug, TG101348. The upfront alone won’t provide an exit to TargeGen’s 10 venture capital backers, who invested a total of $110 million over four funding rounds. However, TargeGen CEO Peter Ulrich stressed in an interview with "The Pink Sheet" DAILY that none of the biobucks are pegged to post-approval achievements. For Sanofi, the June 30 transaction adds another promising asset to its oncology portfolio, which includes a Phase III PARP inhibitor for triple negative breast cancer developed by BiPar and the recently approved prostate cancer therapy Jevtana. In early January, the French pharma created an oncology business unit to streamline operations and allow the company to react more flexibly. It’s a move reminiscent of operational shifts undertaken by Pfizer, Novartis, and others. --JH

Arena/Eisai: Arena Pharmaceuticals won an early race against Vivus and Orexigen Therapeutics to find a commercial partner for its obesity drug candidate lorcaserin. All three companies are vying to bring the first new obesity drugs to the market in over a decade, with FDA action dates for the three drugs scheduled between October and January. Given uncertainties that range from benefit/risk balance to reimbursement challenges, Arena's ability to secure a partner ahead of its Oct. 22 PDUFA date is a coup. San Diego-based Arena announced a U.S. marketing and supply agreement with the Japanese pharma Eisai July 1, including an upfront payment of $50 million. Arena stands to earn another $90 million upon regulatory approval and the delivery of finished product for launch. In lieu of royalties, much of Arena’s potential downstream earnings from lorcaserin stem from supplying the drug to Eisai for a purchase price that will begin at 31.5% of annual net sales. In addition, Arena could receive a one-time purchase price adjustment of up to $1.16 billion based on annual net sales. The adjustment would kick in when sales reach $250 million and top out if revenues climb to $2.5 billion. -- JH

GlaxoSmithKline/Genmab: There are plenty of reasons for smaller biotech partners to keep co-development rights for their drug candidates, but saving cash in the near term just ain’t one of them. Genmab this week joined the list of biotechs that in retrospect -- and in the wake of clinical setbacks, management turmoil and restructuring -- bit off a bit more than they could contractually chew. On July 1, the biotech amended its co-development and commercialization deal with GSK around the anti-CD20 ofatumumab (Arzerra), an antibody in development for both autoimmune and oncology indications. GSK now takes over development and associated costs in autoimmune diseases, and Genmab will forfeit development milestones and its first two sales milestones in this therapeutic area. The two companies continue to plough ahead together in oncology, and the new deal terms call for GSK to pay £90 million up-front. Genmab’s financial contribution to the mAb’s oncology program will be capped at £145 million in total and £17 million per year for six years, starting in 2010. Considering the drug is being studied in upwards of 20 Phase II and Phase III trials, that cap is pretty low. As such, milestones due to Genmab on the candidate’s progress in oncology will be halved. The upshot: Genmab is sacrificing long-term upside for short-term financial considerations.--Chris Morrison

IBM/Roche’s 454 Life Sciences: The so-called third generation sequencers are getting their deal-making ducks in a row. Two weeks ago, Gen-Probe aligned with Pacific Biosciences, with the former paying $50 million in exchange for equity and an exclusive development collaboration. [In the original post, we incorrectly named PacBio's partner as being Life Technologies -- MR]]] Now IBM is handing off its nanopore-based real-time single molecule sequencing platform to Roche Applied Science’s 454 Life Sciences, which will fund continued development of the technology within IBM and add its own sequencing resources. Roche will develop and market all products based on the “DNA Transistor” technology, designed to pass a single molecule of DNA through a nanopore and read the sequence as it’s going through without the need for any chemical synthesis for analysis. The move is in keeping with 454’s goal of moving its own technology from research into clinical applications, as it and other developers validate their technologies and continue to drive down sequencing costs. We’ll be tackling the when and how the impact of sequencing will be felt in clinical practice in the July/August issue of IN VIVO.--Mark Ratner

Celgene/Abraxis: Celgene is acquiring Abraxane developer Abraxis Biosciences and planning an aggressive development and marketing push for the novel nanoparticle formulation of paclitaxel, with the aim of driving the drug's sales to $1 billion by 2015. The $2.9 billion cash and stock deal could be sweetened by milestone payments based on future Abraxane approvals in new indications. The acquisition certainly isn't a steal for Celgene. The company is paying a 17% premium over Abraxis' closing share price June 29. And Abraxane, approved for second-line treatment of metastatic breast cancer, is Abraxis' only marketed drug, generating just $314.5 million in 2009. Celgene sees significant future potential in Abraxane, and plans to re-energize the marketing strategy around the drug in breast cancer, while expanding into additional indications like first-line breast cancer, lung cancer and pancreatic cancer. In addition, Abraxis has five other drugs in development based on its proprietary nanoparticle albumin-bound technology platform. Celgene has been building its portfolio in an effort to expand beyond the multiple myeloma blockbuster Revlimid as part of its transition to a diversified biotech. (Remember that alliance with Agios?) If the Abraxis deal is finalized, it will be the company's third large acquisition in the past three years, coming on the heels of its purchases of Pharmion for $2.6 billion in cash and stock and Gloucester Pharma for up to $640 million in upfront cash and earn-outs.--Jessica Merrill

Sanofi-Aventis/Juvenile Diabetes Research Foundation: AZ wasn’t the only Big Pharma to team up with a non-traditional partner this week. On July 1, Sanofi announced an early stage collaboration with JDRF to fund novel approaches to combat Type 1 diabetes. JDRF will tap its network of researchers to help identify exciting science developed at universities and non-profits, and Sanofi will add its drug development skills to speed up the translation into real therapies. Financial terms of the three-year commitment were not disclosed, but the two parties have created a joint steering committee that will allocate grants in a streamlined fashion, according to Sanofi’s head of External Innovations and Partnering Sridaran Natesan. The arrangement is proof again that Sanofi takes diabetes seriously. Until early January, when the French drug maker created its diabetes unit, efforts were largely confined to marketing its long-acting basal insulin Lantus. Since January, however, the company has inked partnerships with glucose-monitoring company AgaMatrix and beta-cell regenerative biotech CureDM, as well as revised the terms of its alliance with Zealand Pharma in order to create a combination GLP-1/Lantus combo.--EL

Eli Lilly/Marcadia: Eli Lilly broadened its diabetes portfolio by licensing an injectable glucagon pen technology from Carmel, Ind.-based Marcadia Biotech, a startup whose founding management team includes several Lilly veterans. Glucagon can be injected to stave off hypoglycemic episodes and is typically included in emergency kits carried by diabetics. Current kits require several preparation steps, including mixing a powdered form of glucagon with a diluent, but Marcadia’s kits keep the glucagon in liquid solution at room temperature for easier delivery, similar to the epinephrine pens carried by people with severe allergies to prevent anaphylactic shock. Financial terms of the June 25 alliance weren’t announced, but Marcadia said it retained U.S. development rights to its technology, which is still preclinical. Lilly will develop the products outside the U.S. and retain rights to worldwide commercialization. Lilly currently leads the U.S. market in glucagon kits, while Novo Nordisk dominates elsewhere. We're watching to see if the Marcadia deal sparks interest in Marcadia competitor, Enject, which is working on a pen in which the powder and diluent are mixed just before injection.--Paul Bonanos