It was the best of times (Vacation!). It was the worst of times (Market turmoil, London's riots, and unemployment; the Middle East.) It was the age of wisdom (Drug reprofiling! Warren Buffett. A new Muppets album); it was the age of foolishness (2012 Presidential election! Phone hacking scandals!).
We had everything before us -- with the waning of summer, the impending season of investor meetings ought to mean renewed opportunities for deal making, after all. Or maybe not. Big Pharma's aversion to take risk could well mean that for biotechs of a certain ilk, we had nothing before us.
Meantime, if regulators weren't exactly channeling a tale of two drugs this week, news of the extension of Eylea's PDUFA and the months-earlier than expected approval of Zelboraf, announced within 18 hours of each other, sure set up an interesting comparison. (The Friday announcement of an early nod for Seattle Genetics and Takeda's Adcetris means we could have written a tale of three drugs. Alas, it messes with my metaphor.)
On the one hand you have Eylea, a VEGF-inhibitor developed by Regeneron to treat the wet form of age-related macular degeneration, whose primary commercial advantage isn't improved efficacy but a more patient-friendly dosing regimen. Its new PDUFA data has been delayed three months from August 20 until mid-November. On the other hand, you have the small molecule BRAF inhibitor Zelboraf, a targeted therapy that is being co-launched with a companion diagnostic and becomes just the second new drug in decades to treat deadly metastatic melanoma. It's original regulatory action date was October 28.
Two different medicines both treating areas of high unmet medical need. But one is first-in-class and one is a essentially a convenience play, albeit an important one given the importance of sight and the potential to avoid onerous monthly eye injections. Still, it's tempting to wonder if stealth comparative effectiveness is at work by U.S. regulators.
That seems unlikely. No new safety or efficacy concerns are behind Eylea's regulatory extension; in a call with investors Wednesday August 17, the biotech's execs emphasized questions tied to the chemistry, manufacturing and controls portion of the drug's biologics license application were responsible for the postponement of the drug's approval. And if the recent advisory committee meeting vote is any guide -- the committee voted 10-0 in favor of the drug's approval -- there's no reason to think the drug won't make it to market later this year.
Still for Regeneron, which is leaning heavily on Eylea to catapult itself into the realm of commercially-focused biotechs, the news undoubtedly came as a psychic blow. The biotech is now in hurry-up-and-wait mode, having lined up a commercial team approximately 70-people strong to launch the product, according to this story in "The Pink Sheet" DAILY. On the August 17 conference call, the biotech revealed it will take a third quarter SG&A charge in part because of the estimated $70 million to $80 million associated with Eylea's launch. Unsurprisingly, investors reacted negatively, sending the company's stock price down about 8% as of the market's close August 18. (Though it could have been worse given the general market turmoil and the massive sell-off late in the week.)
Plexxikon, the biotech which originated Zelboraf, is in a completely different position entirely. Having exercised an option to co-promote the drug in the US, the VC-backed start-up was snatched up by Daiichi, which like so many other pharmas, is looking to double down in oncology. Roche's Genentech is leading the commercial efforts, and as our colleagues at "The Pink Sheet" DAILY report, has identified a crafty plan that puts the targeted therapy's value front-and center. At an estimated $60k for a course of therapy, the drug, which can only be prescribed for patients with a specific mutation, is significantly cheaper than Bristol-Myers Squibb's competitor Yervoy.
The dichotomy between the forces now steering Regeneron and the insulation Plexxikon now enjoys as a division of Daiichi show that for biotechs, the more things change, the more they stay the same. Or in the words of Charles Dickens,
General Dynamics/Vangent: Government contractor General Dynamics shored up its health care information technology division this week with the $960 million cash purchase of Vangent. The deal brings an exit to private equity fund operator Veritas Capital, which owned 90% of publicly traded Vangent prior to the sale. Veritas acquired Vangent’s predecessor, Pearson Government Solutions, for $600 million in 2007; Vangent has since expanded by acquiring two other companies, FDA and Medicare contractor Buccaneer Computer Systems and Service ($65 million) and the health care IT unit of Aptiv Technology Partners ($4 million). Vangent derives about 90% of its business from U.S. government agencies, including the Departments of Health & Human Services, Defense, State, Education and Labor. It provides IT services including electronic health records to military personnel and Federal employees, as well as informing Medicare recipients of health care options. Vangent will be integrated with Falls Church, Va.-based General Dynamics’ information technology division, which also recently grew by acquiring cloud computing company Network Connectivity Solutions. Arlington, Va.-based Vangent posted net income of $40 million on revenues of $762 million during 2010, and had $27 million in cash and equivalents at the end of the year. The deal comes as many government agencies seek to cut costs in anticipation of reduced budgets and buy-out firms as well as traditional venture groups see opportunity in the relatively nascent healthcare IT space. – Paul Bonanos
Paladin/Labopharm: Canadian drug formulator Labopharm had sought a suitor pour longtemps, and finally found one in acquisitive specialty pharma Paladin Labs. This week Montreal-based Paladin agreed to buy struggling Labopharm for CN 28.57 cents per share in cash, valuing the company at about CN$20 million ($20.4 million). Paladin, which markets a variety of drugs including pain relievers, contraceptives and injectable emergency treatments for hypoglycemia and allergic reactions, is already attempting to acquire cold remedy developer Afexa Life Sciences of Edmonton in a hostile bid. The offer for Labopharm is friendlier, however, and has already been accepted by its board. Labopharm, which brought in new management in March as part of a restructuring, develops drugs using its controlled-release and nano-delivery systems; in its earnings report earlier this month, Labopharm said its expenses and obligations would likely exceed its revenue and cash reserves in the coming months, and its ability to survive as a going concern was in question. While the deal seems likely to close without incident by the fall, Paladin has cause for concern elsewhere: Hours after the acquisition was announced on Aug. 17, Paladin CEO Jonathan Goodman was in a bicycle accident, and is currently hospitalized with what the company calls “serious injuries.”--PB
Bayer Healthcare/Pathway Medical: In the midst of the increased chatter about reviving the question of whether drug companies should also be in the medical device business, fueled by Endo Pharma’s recent $2.6 billion acquisition of American Medical Systems, at least one pharma company that is already in the device space appears to be quietly expanding its presence there. As reported by Xconomy, Bayer Healthcare’s Medrad device unit has reportedly reached an agreement to acquire atherectomy company Pathway Medical Technologies for $125 million, although the deal is not yet final.
Due to an editing error, the Anjojet device was inapprorpiately refered to as a drug eluting balloon. The post has been updated as of August 22, 9am ET.
Plexxikon, the biotech which originated Zelboraf, is in a completely different position entirely. Having exercised an option to co-promote the drug in the US, the VC-backed start-up was snatched up by Daiichi, which like so many other pharmas, is looking to double down in oncology. Roche's Genentech is leading the commercial efforts, and as our colleagues at "The Pink Sheet" DAILY report, has identified a crafty plan that puts the targeted therapy's value front-and center. At an estimated $60k for a course of therapy, the drug, which can only be prescribed for patients with a specific mutation, is significantly cheaper than Bristol-Myers Squibb's competitor Yervoy.
The dichotomy between the forces now steering Regeneron and the insulation Plexxikon now enjoys as a division of Daiichi show that for biotechs, the more things change, the more they stay the same. Or in the words of Charles Dickens,
in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.On one of the last Fridays of summer, perhaps it is a far, far better thing that I bring you another edition of...
General Dynamics/Vangent: Government contractor General Dynamics shored up its health care information technology division this week with the $960 million cash purchase of Vangent. The deal brings an exit to private equity fund operator Veritas Capital, which owned 90% of publicly traded Vangent prior to the sale. Veritas acquired Vangent’s predecessor, Pearson Government Solutions, for $600 million in 2007; Vangent has since expanded by acquiring two other companies, FDA and Medicare contractor Buccaneer Computer Systems and Service ($65 million) and the health care IT unit of Aptiv Technology Partners ($4 million). Vangent derives about 90% of its business from U.S. government agencies, including the Departments of Health & Human Services, Defense, State, Education and Labor. It provides IT services including electronic health records to military personnel and Federal employees, as well as informing Medicare recipients of health care options. Vangent will be integrated with Falls Church, Va.-based General Dynamics’ information technology division, which also recently grew by acquiring cloud computing company Network Connectivity Solutions. Arlington, Va.-based Vangent posted net income of $40 million on revenues of $762 million during 2010, and had $27 million in cash and equivalents at the end of the year. The deal comes as many government agencies seek to cut costs in anticipation of reduced budgets and buy-out firms as well as traditional venture groups see opportunity in the relatively nascent healthcare IT space. – Paul Bonanos
Paladin/Labopharm: Canadian drug formulator Labopharm had sought a suitor pour longtemps, and finally found one in acquisitive specialty pharma Paladin Labs. This week Montreal-based Paladin agreed to buy struggling Labopharm for CN 28.57 cents per share in cash, valuing the company at about CN$20 million ($20.4 million). Paladin, which markets a variety of drugs including pain relievers, contraceptives and injectable emergency treatments for hypoglycemia and allergic reactions, is already attempting to acquire cold remedy developer Afexa Life Sciences of Edmonton in a hostile bid. The offer for Labopharm is friendlier, however, and has already been accepted by its board. Labopharm, which brought in new management in March as part of a restructuring, develops drugs using its controlled-release and nano-delivery systems; in its earnings report earlier this month, Labopharm said its expenses and obligations would likely exceed its revenue and cash reserves in the coming months, and its ability to survive as a going concern was in question. While the deal seems likely to close without incident by the fall, Paladin has cause for concern elsewhere: Hours after the acquisition was announced on Aug. 17, Paladin CEO Jonathan Goodman was in a bicycle accident, and is currently hospitalized with what the company calls “serious injuries.”--PB
Human Genome Sciences/4-Antibody: Even as HGS's investors wonder what additional late-stage clinical assets the biotech will bring in to continue the revenue upsurge the biotech has enjoyed from the recent launch of its lupus biologic Benlysta, the Maryland-based biotech continues to ink early stage deals to ensure its continued access to innovative products. This week comes news that the firm is teaming up with the Switzerland-based 4-Antibody. Financial details of the tie-up weren't disclosed, but the licensing deal seems like a pretty standard early-stage R&D deal, giving HGS rights to use 4-Antibody's proprietary high through-put antibody discovery platform to produce two novel molecules. The technology is rooted in rapid flow cytometry and is designed to produce fully human antibodies that are "better behaved" (according to official 4-Antibody statements) than molecules produced via alternate methods. It's 4-Antibody's second deal; the start-up inked an alliance in 2010 with Boehringer Ingelheim worth more than $240 million in biobucks. (As with this week's HGS deal, the upfront in that collaboration was not disclosed.) HGS, meanwhile, continues to show its interest in large molecule therapeutics. Just one week after winning approval for Benlysta, it announced it would pay $50 million upfront for rights in the US, EU, and Canada to FivePrime Therapeutics' lead asset, a Phase II oncology medicine, FP1039. --EL
Bayer Healthcare/Pathway Medical: In the midst of the increased chatter about reviving the question of whether drug companies should also be in the medical device business, fueled by Endo Pharma’s recent $2.6 billion acquisition of American Medical Systems, at least one pharma company that is already in the device space appears to be quietly expanding its presence there. As reported by Xconomy, Bayer Healthcare’s Medrad device unit has reportedly reached an agreement to acquire atherectomy company Pathway Medical Technologies for $125 million, although the deal is not yet final.
Earlier this year, Medrad received CE Mark approval of its Cotavance drug-eluting balloon to treat peripheral artery disease and is selling that product in Europe, while also pursuing an IDE on the path to seeking US commercialization. Drug-eluting balloons hold great promise as the next major platform to treat vascular disease, particularly in areas where even drug-eluting stents have proven ineffective, with the peripheral vascular market representing the largest of those opportunities. Pathway’s atherectomy devices are also focused on clearing peripheral vessels. Medrad has long been a secondary player in this market, largely through its Angiojet thrombus removal system, which the company added in 2008 with its acquisition of Possis Medical. By adding atherectomy and drug-eluting balloons to their current product line, Medrad, which is located in the Pittsburgh suburb of Warrendale, PA, appears to be taking its cue from the hometown Pirates baseball team in looking to move up in the standings by assembling an armamentarium of endovascular devices for clinicians in the under-served and growing peripheral vascular market.
Due to an editing error, the Anjojet device was inapprorpiately refered to as a drug eluting balloon. The post has been updated as of August 22, 9am ET.
Nice lede, Licking...
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