DOTW isn't superstitious. Nah, it takes more than yet another freak Washington DC-area thunderstorm and a power outage on deadline day to instill paraskevidekatriaphobia in this hardy crew. Then again, we did go out of our way not to walk under any ladders or cross paths with black cats. And thank G-d the main office only has 6 floors.More sensitive souls should take heart. After a paranoia-inducing 2009 in which there were nine Friday the 13ths, today's combination of Friday and 13 is the only one of the year. (Turns out the number depends on the vagaries of the Gregorian calendar.)
Numbers figured more prominently in the biopharma news than in the actual deals that went down. Perhaps triskaidekaphobia is the reason financials went undisclosed in roughly half of deals outlined in this week's edition.
Back to the news. For Genzyme, 4 could be the crucial number, or the years it will take to right its troubled Allston Landing plant. News that Genzyme was taking a $6.5 million charge and a loss for the second quarter surfaced as industry wags and Vegas are still trying to figure out the odds of a Sanofi-Genzyme tie-up. Unnamed sources revealed to major news outlets that the French pharma had made an offer in the $67 to $70 dollar-a-share range.
Genzyme execs reportedly believe the company is worth around $80-a-share, which would drive up the deal's price tag by more than $2 billion to around $20.4 billion. According to Bloomberg, there's a high-stakes game of chicken being played, leading IN VIVO Blog to wonder if the lure of $23 million -- CEO Henri Termeer's golden parachute if a merger transpires -- might lead to some rapid eye movements.
Don't blink. You might miss hedge fund Ramius' sweetened offer for Cypress. Last month Ramius offered to buy 90% of Cypress it doesn't already own for $4-a-share, but the company rejected the offer as too low. Blasting Cypress' strategy, Ramius apparently might raise its offer if fruitful takeover talks occur and the division of Cowen Group has the ability to do diligence.
Another number to keep in mind: 100, or if you prefer, $100 million. That's the amount of sales Leerink Swann analyst Seamus Fernandez reckons Lilly will lose this year thanks to an August 12 court ruling invalidating a patent on its ADHD best-seller Strattera. With generic competition imminent, the drum beat for a deal grows ever louder. So much for the company's smaller efforts to buy time with investors.
IVB's favorite number? Try 20, as in this year is the 20th anniversary of our Pharmaceuticals Strategic Alliances conference. (You're going to be there, right?) As the countdown to PSA's uber-networking begins, rest assured IVB's got the available numbers and the analysis all wrapped up in another edition of...
Merck/Alectos: As we note in the July/August issue of START-UP, developing Alzheimer’s drugs ain’t for the faint of heart. Big Pharma is far from opting out the space, but given the difficulties and the very high profile failures we reckon pricey deals a la Pfizer’s tie-up with Medivation for Dimebon will be the exception going forward. Case in point: Merck’s deal this week with Alectos of Vancouver, BC. The two groups will identify new drugs that modulate O-linked N-acetylglucsaminidase (O-GlcNAcase), an enzyme implicated in the development of Alzheimer’s. Alectos, which spun out of David Vocadlo’s lab at Simon Fraser University, could receive up to $289 million, including an undisclosed upfront payment. The majority of the money is biobucks based on downstream research, development, and regulatory milestones. (There are also tiered royalty payments on sales of any products that result from the collaboration—when or if that happens.) Compare those deal terms, especially the undisclosed upfront, with what Medivation garnered in 2008 for Dimebon: $225 million just to seal the deal and another $500 million in milestone payments in a co-development, co-promotion arrangement that had Pfizer and Medivation sharing costs 60/40. Medivation’s drug was much further along at the time of partnering: Phase II versus Alectos’ preclinical molecules. But with the high failure rate of late-stage Alzheimer’s assets, it seems pharma has realized it’s no less risky and much cheaper to partner early and retain 100% of the development rights. Moreover, it’s easier to shrug off an undisclosed upfront than an eye-popping $250 million down payment if development doesn’t exactly go as planned. -- EL
Emergent BioSolutions/Trubion: Emergent said late Thursday, Aug. 12 it would buy the struggling Seattle biotech for nearly $97 million in cash and stock immediately with up to $39 million in possible milestones. The move gives the biodefense specialist, best known for its BioThrax anthrax vaccine, access to Trubion's clinical autoimmune and oncology programs, as well as its alternative protein platforms. The deal comes after a couple years of turbulence for Trubion, whose lead program TRU-015 stumbled in Phase II rheumatoid arthritis trials in 2007. The compound was left deeper in limbo by Pfizer's acquisition of Trubion's development partner Wyeth in early 2009. Pfizer dropped the program this June, but Trubion had since identified another promising candidate, TRU-016, for chronic lymphocytic leukemia. Trubion partnered it with Facet Biotech, which was later acquired by Abbott Laboratories, in August 2009 for $20 million upfront. Adding the the upheaval, Trubion's chairman, president and CEO Peter Thompson resigned in November with one of its investors, Steven Gillis of ARCH Venture Partners, taking the helm. For each Trubion share, Emergent will pay $1.365 in cash and 0.1641 shares of Emergent common stock, which comes to $4.55 a share or $96.8 million. Emergent will pay up to $39 million in cash if TRU-016 or other programs reach various milestones, such as the start of the first Phase II trial for TRU-016. The milestones expire after 36 months. -- Alex Lash
Endo/Penwest: In a deal that will bring it full control over its second-biggest seller, Opana, Endo Pharmaceuticals will buy drug delivery technology partner Penwest Pharmaceuticals for $5 a share, for a total of about $168 million. Endo also announced the filing of an NDA for a new crush-proof formulation of the extended-release version of Opana on Aug. 9. The specialty pharma’s acquisition apparently was driven largely by the opportunity to maximize the company's interest in Opana and Opana ER, indicated for relief of moderate to severe pain in patients who require continuous, around-the-clock opioid treatment for an extended period. The announcement came weeks after a settlement with generics challenger Impax Laboratories over the key patent protecting Opana ER. As a result, Opana ER won't face generic competition until January 2013, enough of a window for Endo to commit more resources to it. While its purchases in the past two years of Indevus and HealthTronics helped the company expand into the area of pelvic health, the acquisition of Penwest indicates Endo also recognizes the need to support its area of greatest success, pain therapeutics (See this recent IN VIVO feature for more.) -- Joseph Haas
PregLem/Merck Serono: This week’s tie-up between privately-held PregLem and Merck Serono for the mid-sized pharma’s Phase II-ready Jun kinase inhibitor bentamapimod shows companies are still willing to walk the outlicensing talk. PregLem’s priority these days is its Phase-III selective progesterone receptor modulator Esmya, in development to treat systemic uterine fibroids. But it turns out several of PregLem's 23 employees had at one time worked at Serono and been involved in the discovery and early development of bentamapimod. Their knowledge helped catalyze the deal, said PregLem’s CEO Ernest Loumaye in an interview with “The Pink Sheet” DAILY. Bentamapimod will move into proof-of-concept trials next year in prevention of post-surgical adhesions. The companies did not disclose financial terms when they announced the deal on Aug. 11. Founded in 2006 and backed through two venture rounds totaling $64.4 million by Sofinnova Ventures, Sofinnova Partners, MVM Life Science Partners and NeoMed Management, PregLem prefers to in-license clinical compounds that focus on women's reproductive health. -- JH
Topcon/Optimedica: As venture firms struggle to fill their own coffers, execs at private companies have been sharpening their pencils and streamlining their portfolios. The most recent example? OptiMedica, a privately-held biotech developing ophthalmic devices and best known for the development of the PASCAL laser technology for the surgical treatment of cataracts. This week the company announced it had partnered its glaucoma and retina assets to Topcon, a Japanese manufacturer of ophthalmic, optometric, GPS and positioning control devices. Terms of the deal were not disclosed but it is apparently the largest acquisition to date for Topcon’s medical division. OptiMedica, which has pulled in close to $55 million in funding from the likes of Kleiner Perkins Caufield & Byers and Alloy Ventures since its 2005 founding, will use the money to support the global launch of its laser cataract surgery system and sharpen its R&D efforts in the same space. Earlier this year the firm revealed the development of a proprietary femtosecond laser designed to improve cataract surgery by automating the most technically demanding steps. -- EL
Epitomics/Apexigen: With the follow-on biologics pathway still murky, many VCs and private biotech execs are pinning their hopes on developing bio-betters, large molecules that hit well validated targets but offer an improvement in efficacy, dosing, or route of administration than existing therapies and don't infringe on existing IP. (This despite the obvious travails of companies such as Trubion [outlined above] and AstraZeneca's MedImmune, whose Synagis follow-on has suffered a set-back with regulators .) On August 12, privately-held Epitomics, which has a proprietary rabbit monoclonal technology, announced it was spinning out to existing shareholders a new biotech company, Apexigen, which aims to develop and commercialize mABs for treatment of cancer and immuno-disorders. The move seems to leave Epitomics, a Chinese/U.S. biotech hybrid backed by Sycamore Ventures, Amkey Ventures, and Kenson Ventures, largely a discovery/fee-for service play, with Apexigen taking on the riskier, more expensive development work. According to the company, Apexigen inherits bio-better programs already initiated by Epitomics, including mABs against VEGF and TNF. No word whether Epitomics or its investors have pitched in with cash to get Apexigen off the ground. -- EL
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