tag:blogger.com,1999:blog-366341962024-03-13T07:02:44.908-05:00The IN VIVO BlogChris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.comBlogger1950125tag:blogger.com,1999:blog-36634196.post-19853756202618463182015-04-07T14:07:00.002-05:002015-04-07T14:07:46.140-05:00IN VIVO Blog Is No More.The IN-VIVO Blog will no longer be publishing content. For the latest health-care industry news, analysis and much more, be sure to visit <a href="http://www.pharmamedtechbi.com/">www.pharmamedtechbi.com</a>!<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Trudeauhttp://www.blogger.com/profile/05308779637086659421noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-36355579118227199652014-03-07T14:57:00.001-05:002014-03-07T15:00:26.569-05:00Deals of the Week Takes Stock in M&A<div class="separator" style="clear: both; text-align: center;">
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Here at Deals of the Week, we don’t often take note explicitly of buyouts outside the biopharma sphere. But one well-publicized tech deal last month piqued our interest – and it parallels another recent pharma deal in a way we found curious.<br />
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As you may have heard, social networking giant Facebook wowed the tech field with its February takeout of smartphone communications app developer WhatsApp for a jaw-dropping $16 billion plus an additional $3 billion in employee-retention bonuses, reportedly the largest-ever acquisition price for a private, venture-backed company. (We’ll note in passing that one of the deal’s biggest winners, venture firm Sequoia Capital, is also a life sciences investor.)<br />
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Now, $19 billion is a lot of scratch – it’s a bigger pile of cash than the gross domestic product of Jamaica, and it’s in the ballpark of the price Sanofi <a href="http://www.pharmamedtechbi.com/deals/201010108">paid</a> for Genzyme in 2011. But a closer look at the WhatsApp deal’s terms reveals that Facebook paid just $4 billion in cash – a quarter of the deal’s baseline value – and the balance, including the retention bonuses, in its somewhat volatile stock. It’s a common formula in tech, a sector in which speculative value far outpaces revenue in many cases.<br />
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In the biopharma world, such arrangements traditionally are unheard of – but that might be changing. While many pharma mega-deals include both cash and stock components, most feature bigger cash portions than paper value. Just over a third of the $68 billion Pfizer <a href="http://www.pharmamedtechbi.com/deals/200910012">spent</a> to acquire Wyeth in 2009 was in stock, with the rest coming in cash; Johnson & Johnson’s $21.7 billion <a href="http://www.pharmamedtechbi.com/deals/201110064">deal</a> for Synthes in 2011 was in the same league, weighted roughly 65%-35% in favor of cash.<br />
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That’s why Actavis’ pending $25 billion <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/2/18/Actavis-25-Billion-Forest-Labs-Buy-Expands-Geographic-Reach-Product-Portfolio">deal</a> to acquire Forest Laboratories last month was so unusual. Actavis paid just $26.04 per share, or 29% of the total $89.48-per-share purchase price, in cash, and swapped its stock for the rest. So there’s financial risk involved: If Actavis shares fluctuate, the deal’s total value could go up or down rapidly, perhaps before it even closes. (We note that the Facebook/WhatsApp deal technically gained more than $600 million in value before it was even announced, since its stock component was based on an already-outdated five-day average of Facebook’s share price.)<br />
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It’s not the first mega-buyout to favor equity over the hard stuff; Merck’s $42 billion <a href="http://www.pharmamedtechbi.com/deals/200910030">buyout</a> of Schering-Plough was tilted slightly in favor of stock over cash, with 56% of the price paid in equity. But rarely are large pharma deals ever consummated with paper value vastly outweighing cash money; it’s even less likely with smaller deals. A search of our Strategic Transactions database of reveals that only about one in 10 biopharma deals since 2008 falling into the “bolt-on” range – those ranging from a few hundred million dollars to a few billion – had a stock component.<br />
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Some life sciences companies, particularly those living off their sunny growth prospects rather than established, dividend-paying, cash-rich ones, soon could find that their stock is becoming a valuable deal-making currency. And with biotechs soaring in the public markets, some of them look like good candidates for stock-heavy deals. Like Actavis’ stock price, the Nasdaq Biotechnology Index has doubled since November 2012. Emilio Ragosa, a partner with Morgan Lewis & Bockius’ mergers-and-acquisitions practice, said mid-cap biotechs – those valued around $1 billion – are in the sweet-spot. “They tend to have less cash, but their stock is appreciating more rapidly,” he said.<br />
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Big biotechs and specialty pharmas, responsible for most of the M&A deal-making action in 2013, are enjoying exceptionally high valuations, but don’t always have big pharma-like cash flow. They’re good candidates to use their strong stock prices to beef up their businesses without denting their cash piles severely.<br />
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It’s unlikely that big pharmas will change this aspect of their deal-making strategies much; as Ragosa notes, “They have enough cash on their balance sheets.” Ever sensitive to their quarterly earnings, most large pharmas will continue to avoid using stock to take out biotechs. Seven of the top 50 cash holdings among U.S. companies belonged to pharmas, according to a 2013 Moody’s <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/3/20/Pharmas-Among-Biggest-Cash-Hoarders-Moodys-Finds">report</a>; six were sitting on double-digit billions, led by Pfizer. - <i>Paul Bonanos</i><br />
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Transactional activity has been as slow as a snowy Interstate lately, but we’re still taking stock of the latest alliances in...<br />
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<b>Biogen/Eisai</b>: Biogen Idec <a href="http://www.biogenidec.com/press_release_details.aspx?ID=14712&Action=1&NewsId=2292&M=NewsV2&PID=61997">teamed up</a> with Japanese pharma Eisai on March 5 to potentially co-develop and co-commercialize four compounds for the treatment of Alzheimer’s disease. While specific financial details weren’t released, Biogen will pay Eisai an upfront payment of undisclosed size, as well as a fixed number of milestones based on development, regulatory and commercial events. The team also will <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/3/5/Biogen-Hedges-Its-Bet-On-Alzheimers-With-Eisai-TieUp">split</a> worldwide profits on the drugs should they reach the market. Eisai will take the lead on the first two compounds, which it will provide. The first is a beta-site amyloid precursor protein cleaving enzyme (BACE) inhibitor dubbed E2609; Eisai discovered the compound in-house, and is about to begin its Phase II trials. The second monoclonal antibody, BAN-2401, is already in Phase II trials; it’s an immunotherapy designed to break down beta amyloid plaques after they develop. Eisai also has the option to jointly develop and commercialize Biogen’s two in-house Alzheimer’s candidates, the anti-amyloid beta antibody BIIB037 and an anti-tau monoclonal antibody, both of which are in very early stages. The BACE inhibitor space has been heating up as Merck pushes its candidate into Phase III and AstraZeneca follows closely on its heels. Both <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/10/17/Roche-Considers-Moving-Two-Drugs-Into-Phase-III-Drops-EarlyStage-Azheimers-Compound-In-Strong-3s">Roche</a> and <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/6/14/Lilly-Ends-Trial-Of-BACE-Inhibitor-For-Alzheimers-But-Says-ClassWide-Safety-Effect-Unlikely">Lilly</a> have ended programs in the space after safety signals cropped up in clinical trials. There hasn’t been any proof so far that the safety issues are class-wide, but the industry is keeping a close watch for any signs. - <i>Lisa LaMotta</i><br />
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<b>Genocea/Harvard/Dana-Farber</b>: Fresh from its initial public offering last month, vaccine specialist Genocea Biosciences <a href="http://ir.genocea.com/releasedetail.cfm?ReleaseID=829573">struck</a> a research deal with Dana-Farber Cancer Institute and Harvard Medical School to study cancer immunology. Under the March 5 alliance, researchers will use Genocea’s proprietary T cell antigen discovery platform to find antigens that correlate with an anti-tumor immune response in melanoma patients. Charitable scientific network Ludwig Trust will sponsor the research; terms weren’t released. The research will play off existing work by Dana-Farber’s Stephen Hodi and Glenn Dranoff in anti-CTLA-4 therapies such as Bristol-Myers Squibb’s <i>Yervoy </i>(ipilimumab). Harvard microbiology and immunobiology professor Darren Higgins will lead the development of a cancer antigen protein library, which will be screened against patient-derived cells using Genocea’s platform in order to seek a correlative immune response. After an initial lukewarm reception, Cambridge, Mass.-based Genocea shares have rebounded, rising more than 50% since the company’s February 5 debut. The company is best known for its clinical <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2012/10/12/Genocea-Gets-An-Injection-Of-Capital-As-EarlyStage-Studies-Progress">pipeline </a>of anti-infective vaccines, including therapies and preventive treatments for herpes simplex virus-2, pneumococcus, chlamydia and malaria. Its most advanced program is GEN-003, a Phase II therapy for HSV-2. - <i>P.B.</i><br />
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<b>NeoStem/Massachusetts Eye & Ear/Schepens</b>: Cell therapy developer NeoStem also <a href="http://www.neostem.com/media/press-releases/news-item/schepens/">inked</a> a deal with some of Harvard Medical School’s tentacles, entering a research collaboration March 6 with Massachusetts Eye & Ear and the Schepens Eye Research Institute. The publicly traded, New York-based stem cell company will sponsor research by Michael Young, director of Mass. Eye & Ear’s ocular regenerative medicine institute, into various eye disorders; financial terms were not revealed. The deal will fund Young’s research using NeoStem’s proprietary very small embryonic-like stem cells, or VSELs. The scientist will perform preclinical work to find uses of NeoStem’s VSEL products to combat degenerative disorders such as retinitis pigmentosa and macular degeneration. Both Mass. Eye & Ear and Schepens are Harvard Medical School affiliates. NeoStem previously has used its VSELs clinically as wound-healing therapy and to treat periodontitis; the company also has targeted cardiovascular diseases and autoimmune disorders. The eye also has been a popular target for gene therapies, thanks to its closed system and immune-privileged status. That has led to several recent <a href="http://www.pharmamedtechbi.com/Publications/Start-Up/18/7/Ocular-Gene-Therapy-Sees-The-Light">fundings</a> of companies with preclinical and clinical-stage programs. - <i>P.B.</i><br />
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<i>Thanks to Flickr user <a href="https://www.flickr.com/photos/proaerophoto/3759637043/">ProAeroPhoto</a> for his photo of a different way to trade cash for stock, reproduced here under Creative Commons license.</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-67606698916486850032014-03-07T14:54:00.003-05:002014-03-07T17:01:43.706-05:00What Is the Buoyant Biotech IPO Scene Doing to Private Biotech M&A Trends? FOTF Says: Not MuchDespite a slight slowdown, there's considerable cash already sloshing around the biotech IPO space. There's (still!) plenty more stacked up <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/2/10/Biotech-Investor-We-Have-Suitcases-Of-Cash">in investor suitcases</a> from California to the New York Island just waiting to back anything with a pulse. The <a href="http://www.bloomberg.com/news/2014-03-06/money-pours-into-health-care-etfs-spurred-by-new-drugs.html">momentum</a> is here! This land grab is your land grab!<br />
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All of which should mean that biotech boards weighing exit options the past year or so have had choices that didn't exist for most companies in the preceding four or five years. Remember the lean times? The doldrums? You don't?<br />
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That revived optionality should translate into fewer companies agreeing to pharma takeovers. For the ones that <i>do </i>opt for the warm embrace of a bigger drug company, it should also translate into leverage. Those biopharma start-ups that choose to pull the M&A exit cord should be driving better bargains. But data we compiled from <i>Strategic Transactions</i> suggests neither is true. At least not yet.<br />
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<a href="http://2.bp.blogspot.com/-G4Jcl63JK5s/Uxn7MVlXexI/AAAAAAAAFJ0/XD2mCE908bY/s1600/MAvolume.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://2.bp.blogspot.com/-G4Jcl63JK5s/Uxn7MVlXexI/AAAAAAAAFJ0/XD2mCE908bY/s1600/MAvolume.jpg" height="240" width="320" /></a>It's worth remembering that even during the coldest days of the Biotech Winter, when asset prices were at their most depressed, pharma companies flush with cash didn't really go on a shopping spree. Volume of private biotech M&A <a href="http://www.pharmamedtechbi.com/publications/in-vivo/27/8/dealmaking-when-pharmas-the-only-game-in-town">never really spiked</a>. We reported that in 2009, and it pretty much held true the next few years. Why? Assets were cheap, but pharma was picky. Prices slackened a bit, and it won't be surprising if they tick up now as biotech booms (despite <a href="https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1394226000000&chddm=1173&chls=IntervalBasedLine&q=INDEXNASDAQ:NBI&ntsp=0&ei=5vYZU6irCcaI6AH7Wg">this week's hiccup</a> among the larger issues). But volume has stayed fairly constant.<br />
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In fact, the roughly two dozen private biotech M&A deals from 2013, compared with the past five years or so <strike>decade</strike> of data, slots in at just about average. Part of this might be due to company building strategies, born or embraced in the lean years, that emphasized capital efficiency, single-asset structures and baked-in-buyouts. Those were good ideas for the lean years, and they're still good ideas for these times-o-plenty.<br />
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Now, what about prices? Data is of course limited; not every acquired company discloses a price tag, and absolute values tend to be worthless unless you know how much money went into the target prior to a deal. Instead, we looked at step-up multiples, and by-and-large, those haven't changed much either.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-2Jo2H3gxfeM/Uxn8wi8SjiI/AAAAAAAAFKA/xrC3cR3mVS8/s1600/stepups.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-2Jo2H3gxfeM/Uxn8wi8SjiI/AAAAAAAAFKA/xrC3cR3mVS8/s1600/stepups.jpg" height="204" width="320" /></a></div>Instead, up-front deal values on average have bounced around the 3x line for quite a while, and that's roughly in line with, and perhaps a a bit better than, the average pre-money to post-money step-ups we've seen in the biotech IPO space. But acquisition multiples are where we've heard, anecdotally, that things may be changing. So long as biotechs have the kind of optionality that public investors provide - i.e. not just getting onto the market but raising enough cash to have a credible alternative to a pharma partnering deal or outright acquisition - those upfronts might start sliding up. Or perhaps, instead, biobucks that are locked-up in earn-out payments will become easier to attain.<br />
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Speaking of optionality we know you've got choices for your every-other-week biopharma financing wrap-up. Thanks for sticking with ...<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-22-cZlJvjxg/Uxn-Wfb3S6I/AAAAAAAAFKM/cQJzL2cUB5Q/s1600/fotf.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-22-cZlJvjxg/Uxn-Wfb3S6I/AAAAAAAAFKM/cQJzL2cUB5Q/s1600/fotf.jpg" height="36" width="320" /></a></div><br />
<b>Acadia Pharmaceuticals</b>: Just a week after reporting in its fiscal 2013 results that its cash on hand at year end totaled $185.8M, thanks mostly to <a href="http://www.pharmamedtechbi.com/deals/201330245" target="_blank">a $108M secondary offering in May 2013</a>, Acadia increased its cash position again on March 4, <a href="http://www.pharmamedtechbi.com/deals/201430116" target="_blank">netting $171M in a FOPO</a> of 6.4M shares for $28.50. The company, which could realize an additional $27M if underwriters buy up to 960k shares in the overallotment, is preparing to file an NDA in late 2014 for pimavanserin in psychosis associated with Parkinson’s disease and is working on pre-launch activities. Acadia presented pivotal Phase III data at the March 2013 meeting of the American Academy of Neurology. Studies showed the serotonin 5HT2A antagonist/inverse agonist significantly reduced psychosis over placebo (the primary endpoint) and helped maintain patients’ motor control. There were also clinically meaningful benefits in measures of nighttime sleep, daytime wakefulness, and caregiver burden. At the end of 2013, Acadia began testing pimavanserin in Phase II for Alzheimer’s-related psychosis. The company also recently advanced into preclinical studies a muscarinic agonist for glaucoma through <a href="http://www.pharmamedtechbi.com/deals/200320256" target="_blank">its deal with Allergan</a>. --<i>Amanda Micklus</i><br />
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<b>Neurocrine Biosciences</b>:<i> </i>The San Diego biotech focused on neurological and endocrine-based diseases priced <a href="http://www.pharmamedtechbi.com/deals/201430106">a follow-on public offering February 26</a> to sell 8 million shares at $17.75 each, with net proceeds of $133.5 million. Neurocrine said it would use the proceeds to fund its R&D. Primary among its programs is NBI-98854, a wholly owned vesicular monoamine transporter 2 (VMAT2) inhibitor in Phase II for tardive dyskinesia. In 2012, the biotech reported <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2012/3/27/Post-Hoc-Your-Way-To-A-Better-Future-Neurocrine-Will-Build-On-Troubled-Tardive-Dyskinesia-Study?result=1&total=1&searchquery=%253fq%253d14120327006">mixed results</a> from a Phase IIa study of ‘98854 in which patients at one of eight sites fared better on placebo than study drug. Neurocrine has said it plans to keep that program for itself as it attempts to evolve into a fully integrated pharmaceutical company. If successful, it would be quite a turnaround story. In 2006, the firm was rocked by the FDA's refusal to approve its insomnia drug indiplon, then partnered with Pfizer. Its comeback began in earnest with strong clinical data from its gonadotropin-releasing hormone (GnRH) antagonist elagolix, which is now <a href="http://www.pharmamedtechbi.com/deals/201020257">partnered with AbbVie</a> and in Phase III for endometriosis and Phase II for uterine fibroids. This is the second large FOPO by Neurocrine in slightly over two years – it raised $83.2 million in January 2012 by selling 10.9 million shares at $8.10 apiece. This time around, it granted underwriters Jefferies and J.P. Morgan a 30-day option to buy up to 1.2 million additional shares. The stock closed trading March 5 at $17.84 per share, with a 52-week high of $20.29 and a low of $8.57.<i> – Joseph Haas</i><br />
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</i><b>Aquinox Pharmaceuticals</b>: IPO activity slowed the past couple weeks, but Aquinox debuted March 6 by selling 4.2 million shares at $11 each. It hit the midpoint of its proposed range, but it ended up selling 14% more shares than it originally intended. Its lead compound, AQX-1125, is in Phase II for two indications, chronic obstructive pulmonary disease and bladder pain syndrome. Both trials started in 2013 after the firm pulled in <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/4/3/Aquinox-Pulls-In-$18M-In-Venture-Funds-As-COPD-Drug-Moves-Forward">an $18 million Series C round</a> led by Johnson & Johnson Development Corp. and with participation from new investor Augment Investments and returnees Pfizer Venture Investments, Ventures West Capital and Baker Brothers Investment. AQX-1125 is an activator of the enzyme SHIP1, a modulator of the PI3 kinase pathway and, the company says, particularly important in preventing abnormal inflammation at mucosal surfaces. The founders of the Vancouver, BC firm discovered SHIP1 while at the University of British Columbia and created a mouse model whose immune system lacks SHIP1. The asset that became AQX-1125 came from Aquinox's 2009 deal for one of Swedish firm Biolipox's compound libraries. Lead underwriters Jefferies and Cowen, along with Canaccord Genuity, have the option to buy up to 555,000 additional shares.<i> </i><i><i> –</i> Alex Lash</i><br />
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<div class="22StoryText"><b>Human Longevity: </b>Pioneering biologist Craig Venter’s newest project will aim to compile a vast amount of genomic data to treat disorders associated with aging, with an eye on adding decades to the human lifespan. The former genome-mapping CEO of <b style="mso-bidi-font-weight: normal;">Celera Corp.</b> and founder of the J. Craig Venter Institute unveiled the project March 4, revealing an initial funding round of $70 million.<i> </i>HLI didn’t name the full list of investors, but it includes lead backer KT Lim, a Malaysian billionaire whose holdings include a long list of casinos and resorts. Another investor, <b style="mso-bidi-font-weight: normal;">Illumina Inc.</b>, supplied HLI with two systems that can sequence a genome for $1,000, and normally list for $10 million apiece. The remainder of the roster includes an assortment of high net worth individuals, Venter said. HLI says it will initially create 40,000 genomic sequences annually, and may soon obtain 100,000. At first, most will come from consenting patients in <b style="mso-bidi-font-weight: normal;">University of California, San Diego</b> research programs. HLI plans to unite genomic, microbiome and metabolome data to create profiles of healthy and unhealthy patients from all ages, including infants and supercentenarians. It will also investigate the associations between depleted stem cells and aging-related diseases, and will first address cancer before moving on to neurological, cardiovascular and liver disorders. – <i>Paul Bonanos</i></div><br />
<b>Best Of The Rest (Highlights Of Other Activity This Fortnight):</b> Novel dermatology drug developer <b>Thesan Pharmaceuticals</b> has now raised close to $66M, thanks to a <a href="http://www.pharmamedtechbi.com/deals/201430092" target="_blank">$49M Novo Ventures-led Series B round</a> that closed on February 24…days after Endo completed its $1.5B buy of Paladin, Paladin spin-off <b>Knight Therapeutics</b>, which will own rights to the rare disease drug <i>Impavido</i> for leishmaniasis, <a href="http://www.marketwired.com/press-release/knight-therapeutics-enters-into-agreement-71-million-bought-deal-private-placement-special-tsx-venture-gud-1885503.htm" target="_blank">grossed $Cdn71M</a> by selling warrants to GMP Securities, Cormark Securities, and other investors…Pain treatment maker <b>Recro Pharma </b>priced its IPO, selling 3.8 milion shares at $8 each to raise $30 million...<b>Ampio Pharma</b> <a href="http://www.pharmamedtechbi.com/deals/201430110" target="_blank">netted $64M in a follow-on public offering</a> to complete clinical trials of <i>Ampion</i> and <i>Optina</i> (for osteoarthritis of the knee and diabetic macular edema, respectively) and submit regulatory filings…using momentum from its recently filed NDA for Alzheimer’s combination memantine ER/donepezil (partnered with Forest), <b>Adamas Pharmaceuticals</b> <a href="http://www.sec.gov/Archives/edgar/data/1328143/000104746914001840/a2218562zs-1.htm" target="_blank">filed for its IPO</a>…and <b>Abingworth</b> <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/2/28/UK-Venture-Group-Abingworth-Attracts-375M-For-New-Bioventures-Fund" target="_blank">closed its tenth life sciences fund</a>, worth $375M. --<i>Amanda Micklus</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Amanda Micklushttp://www.blogger.com/profile/02445930031260123049noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-90443235977659722862014-03-04T10:00:00.000-05:002014-03-04T15:51:33.642-05:00Stakeholders in Consumer Genomics, Read This<a href="http://3.bp.blogspot.com/-Nsj-Ur_Vq_E/UxXjIEjT_TI/AAAAAAAAAKk/kIMtYrQrNlk/s1600/23andme_logo+(1).jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://3.bp.blogspot.com/-Nsj-Ur_Vq_E/UxXjIEjT_TI/AAAAAAAAAKk/kIMtYrQrNlk/s1600/23andme_logo+(1).jpg" /></a><br />
Noting a flurry of recent commentaries in peer-review journals, our February <i style="mso-bidi-font-style: normal;">Science Matters</i> column in <i style="mso-bidi-font-style: normal;">START-UP</i> (<a href="http://www.pharmamedtechbi.com/Publications/Start-Up/19/2/23andMe-Has-Accelerated-The-Consumer-Genomics-Debate">link here</a>, free access) discussed how the personal genomics company 23andMe has accelerated the consumer genomics debate through its dust-up with FDA over the lack of evidence and documentation supporting its Personal Genome Service, which FDA warned falls under its definition of a medical device.<br />
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The commentaries, in <i style="mso-bidi-font-style: normal;">Nature</i>, <i style="mso-bidi-font-style: normal;">NEJM</i>, and <i style="mso-bidi-font-style: normal;">JAMA</i> are a reminder that genomics is rapidly becoming incorporated not only into the clinic, but into everyday life. It is forcing FDA and other agencies to take a stand on critical technical, legal, and ethical issues, which will influence the strategies of medical diagnostics and pharmaceutical companies as well as labs performing tests directly for the consumer. As we wrote, those regulatory decisions should be made with the awareness that at some point, barriers to consumer access to these data will come down.<br />
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In researching the column, we were directed towards a draft report <strike>by the Presidential Commission for the Study of Bioethical Issues</strike>, “<i style="mso-bidi-font-style: normal;">Consuming Genomics: Regulating Direct-to-Consumer Genetic and Genomic Information</i>.” Its authors call the 86-page document “one of the first to analyze the effect of the 23andMe Warning Letter on the industry, to focus on the bifurcation of genetic interpretation and information as an independent medical device, and to analyze future regulatory approaches available to FDA.” Forthcoming in the Nebraska Law Review, a draft is available <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2343723">here</a>.<br />
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The report provides a clear, detailed, up-to-the-moment summary of the the regulatory, ethical, and legal issues around DTC genetic testing. It also lays out what FDA considers a laboratory-developed test, what it considers a clinical device for commercialization, what it considers a research exemption, and why. It's a great read for those of us trying to keep straight FDA's thinking on LDTs, its jurisdiction, and the possible dividing lines between regulated and unregulated products, as well as the history of the consumer genomics field. <i>-- Mark Ratner</i><br />
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Note: This post originally stated that the report is from the Presidential Commission for the Study of Bioethical Issues. The authors, Kayte Spector-Bagdady and Elizabeth Pike, work for the Commission. However, the report was written in their personal capacities.</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Mark Ratnerhttp://www.blogger.com/profile/15428159718414924160noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-52313918418026675432014-02-28T18:24:00.001-05:002014-02-28T18:24:47.793-05:00DOTW Keeps Tabs As Tax Trimming Fuels Deals<div class="separator" style="clear: both; text-align: center;">
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As an industry, biopharma actually fares pretty well when it comes to taxes. Among profitable companies, biotech and pharma have some of the lowest effective U.S. tax rates compared to companies in other sectors. But that doesn’t mean they have stopped working to push their tax rates even lower.<br />
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Along with a recent ramp-up of the usual strategies, such as buying companies or assets based in low-tax locales or moving intellectual property there, the industry also is starting to take advantage of the newest twist on tax inversions – in which two companies in high tax locales, only one of them the U.S., merge and create a new company based in a low-tax country.<br />
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The specialty pharma consolidation frenzy is driven in part by tax benefits derived from buying companies in lower tax jurisdictions like Ireland. The spec pharma with the lowest tax rate wins – or at the very least earns the right to leverage all that cash on their books to gobble up higher tax rate competitors, thereby making higher margins on the same products.<br />
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Valeant is the obvious winner on this front; it will have an astonishing 2% tax rate in 2014, according to data from RBC Capital. But most recently, taxes were also a factor in the Actavis purchase of Forest Laboratories Inc. Actavis had already lowered its tax rate with the <a href="http://www.pharmamedtechbi.com/deals/201310060?result=1&total=1&searchquery=%253fq%253d201310060" target="_blank">acquisition of Irish-headquartered company Warner Chilcott</a> that completed last fall. Now Actavis can apply that reduced tax rate to a product portfolio that will encompass Forest. Prior to the <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet/75/21/Tax-Benefits-Branded-Portfolio-Synergies-Drive-Actavis-Acquisition-of-Warner-Chilcott?result=1&total=1&searchquery=%253fq%253d00130527009" target="_blank">deal announcemen</a>t, RBC expected Forest would have a 24% effective tax rate in 2014 and that Actavis’ would be 17%.<br />
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And, of course, Perrigo is also a newly Irish company, with its <a href="http://www.pharmamedtechbi.com/deals/201310103?result=1&total=1&searchquery=%253fq%253d201310103" target="_blank">purchase last year</a> of the floundering Elan. But there aren’t a lot of direct routes left to Ireland. The largest independent, public Irish therapeutics company is drug delivery company Alkermes; it’s only one of six remaining that also include another drug delivery play Merrion Pharmaceuticals as well as antibody company Prothena, according to the <a href="http://www.pharmamedtechbi.com/deals" target="_blank"><i>Strategic Transactions</i> database</a>.<br />
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(In Ireland, all roads lead back to Elan. Alkermes garnered its Irish locale after a <a href="http://www.pharmamedtechbi.com/deals/201110070?result=1&total=1&searchquery=%253fq%253d201110070" target="_blank">2011 merger with the drug delivery unit of Elan</a>, while Prothena is the <a href="http://www.pharmamedtechbi.com/deals/201230387?result=1&total=1&searchquery=%253fq%253d201230387" target="_blank">2012 spin-out of Elan’s drug discovery business</a>. Merrion is also based on <a href="http://www.pharmamedtechbi.com/deals/200730229?result=1&total=1&searchquery=%253fq%253d200730229" target="_blank">IP purchased from Elan</a>.)<br />
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Most biopharmas count themselves lucky to have an effective tax rate in the teens – or even the low 20s. The big biotechs with the highest anticipated 2014 effective tax rates are Biogen Idec Inc. at 27% and Gilead Sciences Inc. at 25%, according to RBC. Between them they’ve had two of the <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet/76/2/Tecfidera-Stands-Out-From-The-Pack-Of-2013-Drug-Launches?result=1&total=1&searchquery=%253fq%253d00140113013" target="_blank">most successful launches</a> in recent years for Biogen’s <i>Tecfidera </i>(dimethyl fumarate) and Gilead’s <i>Sovaldi </i>(sofosbuvir).<br />
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Intellectual property for each of these products is domiciled in Ireland in an effort to curb tax expenditures. But that’s a long-term solution that could take years to work. Biogen had a 28.8% non-GAAP tax rate in the fourth quarter. Due to a larger percentage of its profits coming from the U.S. with the Tecfidera launch, the biotech expects the rate to remain at this level through 2014 but for it to subsequently decline in the following two years.<br />
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Alexion beefed up its Irish and Singapore operations last year and in January bought an Irish vialing facility for its <i>Soliris </i>(eculizumab). These efforts resulted in tax benefits that are expected to give it a 2014 non-GAAP tax rate of 11% to 12% (GAAP tax rate of 20% to 25%). That’s down from a whopping 51.9% effective tax rate in 2013, which translated into an income tax provision of $273 million. Alexion’s non-GAAP rate is expected to rise to 13% to 14% in 2015 and 16% to 18% in 2016 and beyond, since some benefits are only short-term tax credits.<br />
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The most creative tax tactic in the sector is the recent <a href="http://www.pharmamedtechbi.com/deals/201310160?result=1&total=1&searchquery=%253fq%253d201310160" target="_blank">Endo-Paladin deal</a>. The usual approach to tax inversion is for a U.S. company to become the subsidiary of a foreign company. The latest twist on this long-standing move, the third deal of its kind according to RBC, is exemplified by the Endo-Paladin merger, in which a U.S. and Canadian company are <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/11/5/Endo-Tries-Its-Luck-With-The-Irish-Through-16-Billion-Paladin-Acquisition?result=1&total=1&searchquery=%253fq%253d14131105003" target="_blank">merging to form a new entity</a> – in this case, an Irish company.<br />
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One risk of being overly imaginative with corporate tax strategy is always bad publicity, as it can trigger allegations of being a ‘tax avoider’ or, even worse, attract the tender attentions of the IRS. Those issues make it difficult for the big multinationals to be very aggressive on the tax front, although becoming enormous hasn't slowed Valeant’s efforts on this front.<br />
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The highest corporate income tax rate in the United States is around 40%, including federal, state and local taxes. But at $242 billion in 2012, corporate income taxes are a small percentage of U.S. federal receipts compared to the $1.1 trillion in individual income taxes and $845 billion in social insurance taxes during that year, according to a recent Government Accounting Office report. Since the 1980s, corporate taxes have ranged from roughly 6% to 15% of federal revenue.<br />
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Ireland isn’t the only useful tax locality – the top four are the UK, Ireland, the Netherlands and Switzerland, according to RBC. These countries had a 2013 corporate tax rate of 23%, 12.5%, 25%, and 18%, respectively, according to data from KPMG.<br />
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Ernst & Young’s Mitchell Cohen, the life sciences global tax leader at Ernst & Young, also includes Belgium (35%, with substantial patent and R&D related deductions and credits), Singapore (17%) and Puerto Rico (20% to 30%) among the ranks of <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet/75/40/Biopharma-Tax-Strategy-Demystified-A-QampA-With-Ernst-amp-Young?result=1&total=1&searchquery=%253fq%253d00130923015" target="_blank">countries with a significant life sciences presence</a> that provide tax benefits.<br />
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Among profitable companies overall, the average effective tax rate is 26.6%, according to a current dataset from Aswath Damodaran, a professor of finance at the Stern School of Business at New York University. The profitable pharma companies in his dataset had a 22% average effective tax rate, while the money-making biotechs were at an average of 17.4% That puts both groups in the bottom one-third of corporate tax paying sectors.<br />
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And while DOTW can't promise that you'll personally enjoy an effective tax rate of 2% this season, we do want to send you off with this week's deal news. Please read on to <i>discuva </i>the latest, including a pair of preclinical deals and another two that were called off in this week's edition of. . . .<br />
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<b>Celgene/Abide:</b> Celgene likes to keep all its options open – to acquire companies, to acquire programs and to license programs. In its latest R&D deal with the preclinical Abide Therapeutics, disclosed on Feb. 28, it included an option to purchase its biotech partner as well as an option to license the rest-of-the-world rights on the first two programs to reach the clinic. Abide’s most advanced compound, AB101131, is expected to enter the clinic in 2015. The biotech expects to get three or four additional candidates into the clinic under the collaboration. Its technology selectively targets serine hydrolases to develop new treatments for inflammation and immunological disorders. Founded in 2011, Abide was seeded by venture firm Cardinal Partners. Celgene and Cardinal Partners both participated in an undisclosed equity financing concurrent with the deal. Other terms of the deal, including the upfront, also remain undisclosed. Abide is headed by Alan Ezekowitz, an entrepreneur-in-residence at Cardinal Partners who became the biotech’s president, CEO and co-founder. Prior to that, he was at Merck Research Laboratories, the research division of Merck & Co. Inc., as SVP and franchise head of bone, respiratory, immunology and endocrine. Abide’s platform is based on work by Professors Ben Cravatt and Dale Boger of the Scripps Research Institute. The biotech secured its <a href="http://www.pharmamedtechbi.com/deals/201320197?result=1&total=1&searchquery=%253fq%253d201320197" target="_blank">first big biopharma deal last May</a>; it partnered with Ezekowitz’ former employer, Merck. In that deal, it garnered an undisclosed upfront and milestones of up to $430 million to discover, develop and commercialize small molecules against three novel targets to treat metabolic diseases with a focus on type II diabetes. In the last few years, Celgene has done at least three prior deals that included an option to purchase the company: an October 2013 deal with cancer and fibrotic disease company <a href="http://www.pharmamedtechbi.com/deals/201320430?result=1&total=1&searchquery=%253fq%253d201320430" target="_blank">PharmAkea Therapeutics</a>, a July 2013 partnership with toll-like receptor agonist developer <a href="http://www.pharmamedtechbi.com/deals/201220447?result=1&total=1&searchquery=%253fq%253d201220447" target="_blank">VentiRx Pharmaceuticals</a>, and an October 2012 deal with selective small molecule histone deacetylase (HDAC) inhibitor developer <a href="http://www.pharmamedtechbi.com/deals/201310100?result=1&total=1&searchquery=%253fq%253d201310100" target="_blank">Acetylon Pharmaceuticals</a>.<i> - Stacy Lawrence</i><br />
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<b>Roche/ Discuva: </b>Roche and U.K. biotech Discuva are collaborating on the discovery and development of new antibiotics to treat multi-drug resistant gram-negative infections using Discuva’s Selective Antibiotic Target Identification technology platform. SATI uses next-generation sequencing and bioinformatics to identify bacterial targets and select from among them promising drug development candidates. The deal, announced on Feb. 28, fits well with Roche’s revamped research strategy in infectious diseases, a field its R&D organization exited more than 20 years ago, but <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet/75/40/Roche-Reviews-Its-Research-Priorities-With-Opening-Of-Translational-Research-Center?result=1&total=1&searchquery=%253fq%253d00131007013" target="_blank">recently has re-entered</a>. The new, narrower focus is on multi-drug resistant, pathogen-specific, hospital-directed therapies, rather than broad spectrum antibiotics that were Roche’s original focus. Companion diagnostics, an area of strength due to Roche’s long experience in molecular diagnostics, will be important in identifying pathogens. In an October 2013 meeting in New York, Roche’s head of research and early-stage development John Reed outlined his organization’s priorities, noting that the antibiotics field is attractive now in part because “the animal models are good in the clinical context” and the regulatory path is clearer, particularly for safety requirements, thanks to recent FDA guidance.” Discuva will receive an upfront payment of $16 million, as well as research fees and payments on multiple programs of up to $175 million per product upon achievement of certain development, commercial and sales milestones. It will also receive potentially double-digit royalties on product sales. Discuva uses proprietary methods built from recent genomic discoveries to identify targets that affect bacterial growth and viability, as well as related genes potentially associated with development of downstream resistance. The problem of multi-drug resistance to gram-negative infections is growing but has not received as much attention as gram-positive infections. Gram negative pathogens addressed by Discuva include <i>Pseudomonas aeruginosa</i>, <i>Acinetobacter baumannii</i>, <i>Klebsiella pneumonia</i>, <i>Escherichia coli</i>, and <i>Neisseria gonorrhoeae</i>. The company was founded in early 2012, with backing from New Wave Ventures. New Wave’s co-founder Tim Bullock is chairman of Discuva’s board; the amount his firm contributed to the start-up is not public. David Williams is an entrepreneur who founded Sareum, a U.K. oncology biotech that went public on AIM, and previously worked at Millennium Pharmaceuticals, Acambis, and Medivir. <i>- Wendy Diller</i><br />
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<b>Merck/Ariad: </b>The fate of Ariad Pharmaceuticals’ mTOR inhibitor ridaforolimus is uncertain now that pharma partner Merck & Co. has decided to return rights to the cancer drug. Ariad revealed in its year-end financial release Feb. 25 that Merck is terminating a licensing agreement for the development and commercialization of ridaforolimus effective in November. The move creates “a new clinical and business opportunity for Ariad,” the company said in a statement, but management didn’t even mention ridaforolimus during a same-day conference call. Ariad is focused on the re-launch of <i>Iclusig </i>(ponatinib), which <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet/76/1/With-emIclusigems-Return-Ariad-Gets-A-Second-Chance-To-Get-The-Dose-Right?result=1&total=1&searchquery=%253fq%253d00140106003" target="_blank">re-entered the U.S. market in January</a> for the treatment of leukemia after sales were temporarily halted last year due to safety concerns. The company is also running clinical trials to meet FDA’s post-marketing commitments for Iclusig and to expand its label to new indications. Merck’s decision to end the agreement shouldn’t surprise investors, especially now that the big pharma’s oncology focus has shifted to its PD-1 immunotherapy program. Ridaforolimus was rejected by FDA in 2012 as a maintenance treatment for sarcoma after it <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2012/6/6/MerckAriads-Hopes-For-Ridaforolimus-May-Rest-Beyond-Sarcoma-After-FDA-Rejection?result=1&total=1&searchquery=%253fq%253d14120606001" target="_blank">failed to demonstrate a benefit on survival in a Phase III trial</a> and only a limited two-week progression-free survival advantage. Under the original 2007 collaboration between the two companies, Merck paid $75 million upfront for development and commercialization rights to ridaforolimus and agreed to pay up to $452 million in development milestones and $200 million in R&D payments; the <a href="http://www.pharmamedtechbi.com/deals/200720475?result=1&total=1&searchquery=%253fq%253d200720475" target="_blank">deal was revised in 2010 </a>to give Merck global rights rather than a U.S. profit split. Merck paid out some $222.5 million in upfront and milestone payments during the life of the deal, according to the <i>Strategic Transactions</i> database.<i> - Jessica Merrill</i><br />
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<b>Teva/Andromeda:</b> In a case of a <i>“No-Deal”</i> possibly leading to another deal – Andromeda Biotech reacquired rights to type 1 diabetes candidate DiaPep277, along with equity, from fellow Israeli company Teva. To undo the firms’ 2007 partnership around the human heat shock protein 60 (Hsp-60)-derived peptide, Andromeda will pay Teva total consideration of approximately $72 million in future installments based upon revenues or proceeds payable to its shareholders.That unraveling of a deal on Feb. 24 was followed by media reports Feb. 26 that Clal Biotechnology, another Israeli company which owns 96% of Andromeda, was working on selling Andromeda and the DiaPep277 program to an undisclosed U.S. biopharma for a price that might number in the hundreds of millions of dollars. At press time, however, a second transaction could not be confirmed. Andromeda said it will continue a 475-patient confirmatory Phase III trial for the candidate. The 24-month, double-blind, placebo-controlled trial is being conducted at more than 100 locations in North America, Europe, Israel and Argentina. Patient recruitment was completed in September 2012 and the trial is expected to produce data by the end of this year. The trial is studying DiaPep277’s ability to preserve the patient’s insulin secretion by the pancreas, with a primary endpoint of maintenance of glycemic control. <i>- Joseph Haas</i><br />
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<i>Thanks to 401(K) 2013 from Flickr for the use of the image, which we find both alarming and strangely beautiful.</i><br />
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<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Anonymoushttp://www.blogger.com/profile/04100128702024908186noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-56287020895183824362014-02-21T14:48:00.000-05:002014-02-21T14:48:20.282-05:00Deals Of The Week: Novartis Places Bid To Dominate In Cancer<div class="separator" style="clear: both; text-align: center;">
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While the largest deal of the week, and certainly the one receiving the most attention, has been Actavis' expansion of its branded portfolio via its $25 billion purchase of Forest Laboratories, the deal that could have major implications for a hot target space in cancer is Novartis' pick-up of <a href="http://www.pharmamedtechbi.com/publications/the-pink-sheet-daily/2014/2/18/novartis-ups-the-ante-in-immunotherapy-with-costim-buy">a small Massachusetts biotech</a>. <br />
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<a href="http://www.novartis.com/newsroom/media-releases/en/2014/1762334.shtml">Novartis</a> nabbed young start-up <a href="http://www.prnewswire.com/news-releases/costim-pharmaceuticals-inc-acquired-by-novartis-245809091.html">CoStim Pharmaceuticals</a> at the beginning of the week for an undisclosed amount – a move that could make it a major force in the red hot area of cancer immunotherapy. <br />
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The closely held biotech was founded in 2012 by MPM Capital and led by MPM managing directors Luke Evnin and Robert Millman. Atlas Ventures joined MPM in early 2013 to fund the company’s $10 million Series A round. While terms of the deal were not disclosed, Atlas partner Bruce Booth wrote in<a href="http://lifescivc.com/2014/02/immuno-oncology-startup-costim-pharmaceuticals-acquired-by-novartis/"> a recent blog post </a>that “if the contingent milestones are paid, this deal will return a significant portion of the entire Life Science allocation in Atlas Fund VIII.”<br />
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The Swiss pharma knows a thing or two about oncology – it’s been marketing <i>Gleevec</i> (imatinib), one of the earliest targeted cancer treatments and a multi-billion dollar drug annually, since 2003. And it boasts one of the richest oncology pipelines in the industry, spanning numerous solid- and liquid-tumor indications and many of the hottest biological targets. Its latest R&D foray into chimeric antigen receptor technology (CART) – and the programs it’s acquired from CoStim – has enriched the pharma’s immunotherapy platform and upped its commitment to being a dominant player in oncology. <br />
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While Novartis has been cagey about revealing what CoStim actually has to offer, Bill Sellers, its global head of oncology, says the Cambridge biotech brings four to five late-stage programs to the table – programs the industry could start hearing about in early 2015. <br />
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“One of our strengths is attacking cancer from its genetic base,” said Sellers. “But we have not done a lot of work in immunotherapy until two years ago,” he admitted.<br />
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That’s when Novartis<a href="http://www.pharmamedtechbi.com/publications/the-pink-sheet-daily/2012/8/6/novartispenn-to-research-chimeric-antigen-receptor-immunotherapies"> inked its deal </a>with the University of Pennsylvania for its CART research. <a href="http://www.pharmamedtechbi.com/deals/201220344">The deal</a> is based on the work of Carl June, whose lab created T-cells that express the receptor CART 19, a synthetic fusion protein consisting of antibodies that attach to the CD-19 protein, commonly expressed in chronic lymphocytic (CLL) and other B-cell mediated leukemias. The genetically engineered T-cells are injected back into the patients, where they find their way to CD-19-expressing leukemia cells and kill them. <br />
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Since pairing up with Penn, Novartis has been “building expertise internally,” said Sellers, as well as opening a large-scale manufacturing facility in Morristown, NJ. “CART has shown dramatic efficacy, but it doesn’t work in everybody,” said Sellers. “So there is room to augment that.”<br />
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Sellers said Novartis has been looking for a way to get into checkpoint inhibitors and other immunotherapies for a couple of years, knowing it doesn’t have the expertise in-house. That’s where CoStim comes in – one of its late-stage assets targets the PD-1 pathway. The smokin’ hot PD-1 pathway – if you’ve paid any attention to, or even just glanced at, companies like Merck or Bristol-Myers Squibb in recent months, then you’ve heard about their anti-PD-1 drugs. Combination therapies with these checkpoint inhibitors are going to be huge - $35 billion huge, if some analysts are to be trusted. <br />
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Merck already is jumping on the combo bandwagon – it’s <a href="http://www.pharmamedtechbi.com/publications/the-pink-sheet-daily/2014/2/5/pushing-hard-on-pd1-merck-does-a-trio-of-combo-development-deals">inked three deals </a>with Pfizer, Incyte and Amgen just this month to combine its anti-PD-1 checkpoint inhibitor MK-3475 with assets in their respective pipelines. <br />
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Novartis is employing a different strategy – it’s hoping to move forward with a CART/PD-1 combo. “We are just starting to explore CART in solid tumors, which are thought to be more immunosuppressant,” said Sellers. <br />
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CART programs may be just as revolutionary as PD-1. On Feb. 19, Memorial Sloan-Kettering Cancer Center <a href="http://www.mskcc.org/pressroom/press/cell-therapy-shows-remarkable-ability-eradicate-clinical-study">announced results from a trial</a> of adult B cell acute lymphoblastic leukemia that showed 88% of patients achieved complete remission after receiving the modified T-cells. (The technology is the basis for the founding of high-profile start-up Juno Therapeutics, which currently is<a href="http://www.pharmamedtechbi.com/publications/start-up/19/2/in-cancer-immunotherapy-legal-battle-its-now-juno-v-novartis"> locked in a patent dispute</a> over the CAR technology with Novartis.) <br />
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French biotech Servier also is getting in on the action, as you can read below in ...<br />
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<b>Actavis/Forest </b>– Actavis is nearly unrecognizable from the little Icelandic company it was just three years ago. The company has merged with both <a href="http://www.pharmamedtechbi.com/publications/the-pink-sheet-daily/2013/5/20/merger-with-warner-chilcott-expected-to-turn-actavis-into-3-specialty-pharma-in-us">Warner Chilcott PLC </a>and <a href="http://www.pharmamedtechbi.com/publications/the-pink-sheet-daily/2012/4/26/watson-expands-its-geographic-reach-with-actavis-acquisition">Watson Pharmaceuticals </a>during that time to become a generics behemoth with multinational presence. Now, it is continuing down the road of transformation with its $25 billion acquisition of Forest Laboratories. <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/2/18/Actavis-25-Billion-Forest-Labs-Buy-Expands-Geographic-Reach-Product-Portfolio?result=6&total=1309&searchquery=%253fq%253dactavis">The stock-and-cash deal</a> will turn Actavis into a developer of specialty brand name drugs, boosting specialty products to represent about 50% of combined company revenue. North American specialty pharmaceuticals currently comprise about 30% of Actavis’ standalone revenue. Forest shareholders will get $26.04 in cash and a portion of an Actavis share for each Forest share. The total, per-share price of $89.48 represents a premium of about 25% over Forest's closing price on Feb. 14, the last trading day before the deal was announced, of $71.39. For Forest this is an ideal exit for its shareholders; activist investor Carl Icahn has said in news reports that this acquisition is a good example of when activist measures work. Forest CEO Brent Saunders has been touted as having the magic touch – he flipped Forest in less than six months after taking over and was the architect behind the sale of <a href="http://www.pharmamedtechbi.com/publications/the-tan-sheet/21/22/bausch--lomb-buy-vaults-valeant-into-consumer-eye-care-space">Bausch + Lomb to Valeant Pharmaceuticals </a>for $8.7 billion before that. - <i>Lisa LaMotta</i><br />
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<b>Servier/Cellectis</b> – Servier <a href="http://www.servier.com/content/cellectis-and-servier-announce-collaboration-allogeneic-cell-therapy-ucart19-treat-leukemia">wants a piece </a>of the CART action; the French biotech inked a collaboration with cell therapy company Cellectis on Feb. 17 for $10 million upfront and $840 million in potential milestones tied to the development, regulatory and commercial success of six potential products. <a href="http://www.pharmamedtechbi.com/deals/201420071?result=6&total=387&searchquery=%253fq%253dservier">The deal</a> includes the development of UCART19, Cellectis’ lead product, a CD19-targeting compound that is in early stages, but could be a potential rival to Novartis’ lead CART program – which also targets the CD19 T-cells. “These original cell-based therapies will well complement Servier's innovative clinical oncology pipeline, which currently includes immunotherapeutic monoclonal antibodies, an HDAC inhibitor, kinase inhibitors, antiangiogenic and proapoptotic small molecules,” said Jean Pierre Abastado, head of oncology at Servier. The deal initially will focus on leukemias and lymphomas, with Servier having the option to license the products and take over development after Phase I has been completed. - <i>L.L.</i><br />
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<b>Gilead/CURx</b> - Gilead Sciences has had its hands full, what with plotting the domination of the market for all-oral HCV treatment. So busy, in fact, that the biotech has signed only one R&D deal in almost the last two years – a preclinical partnership with antibody company MacroGenics last January, according to the <a href="http://www.pharmamedtechbi.com/deals/201320006?result=1&total=1&searchquery=%253fq%253d201320006">Strategic Transactions database</a>. On Feb. 19, Gilead announced<a href="http://www.cff.org/Display/dsp_ClinicalResearchHTML.cfm?id=82"> its latest R&D deal</a>, but this time it has flipped the usual script and out-licensed a late-stage candidate for development. It’s calling upon CURx Pharmaceuticals develop non-core asset inhaled fosfomycin/tobramycin to treat <i>Pseudomonas aeruginosa</i> lung infection in cystic fibrosis (CF) patients. The candidate met the primary endpoint in a Phase II trial in 2010 in this indication, but Gilead subsequently discontinued development. There already are two treatments for this indication approved in the U.S.: Gilead’s own <i>Cayston</i> (inhaled aztreonam) and Novartis'<i> Tobi </i>(inhaled tobramycin). In preclinical studies, inhaled fosfomycin/tobramycin has shown activity against several other pathogenic bacteria, including methicillin-resistant <i>Staphylococcus aureus </i>(MRSA). About half of all CF patients become infected with <i>Pseudomonas aeruginosa</i> and about a quarter are infected with MRSA, according to CURx. The financial details of the transaction were not disclosed. - <i>Stacy Lawrence</i><br />
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<b>Pfizer/ MIT’s Synthetic Biology Center</b> - Pfizer and the Massachusetts Institute of Technology are collaborating on the use of novel synthetic biology tools to enhance drug discovery and development. The three-year deal, announced on Feb. 20, covers multiple therapeutic areas at Pfizer and involves several core investigators at MIT’s Synthetic Biology Center, according to the MIT press release. Scientists have different definitions for synthetic biology, but, essentially, it involves integrating current and new biotech tools, systems biology and bioinformatics to enable engineering of new biological parts, in short, making new genetic codes from scratch. The ultimate goal of using such techniques is to make design and construction of novel biological systems into a professional engineering discipline. Synthetic biology as an area of scientific focus has taken off in the past decade, with support from the National Science Foundation, which funded creation of the first synthetic biotech research center, Synberc, in 2006. Participants in Synberc were the University of California at Berkeley and University of California, San Francisco, Stanford University and MIT. Since then, NSF has awarded millions of dollars more to other academic organizations to set up centers of synthetic biology research, including the J. Craig Ventor Institute and New York University. Start-up activity also is climbing, with one of the most visible practitioners, Intrexon, netting $171 million in <a href="http://www.pharmamedtechbi.com/deals/201330406">an initial public offering </a>last year. The ability to use synthetic biology parts as “programmable entities” presents the opportunity to create new biological processes. The partners plan to use cellular genome engineering to support development of next-generation protein expression systems. Pfizer didn’t provide more details, except for comments by Jose Carlos Gutierrez-Ramos, the company’s group senior VP and head of Biotherapeutics R&D. He noted in a press release that “We are reaching a key inflection point where advances in synthetic biology have the potential to rapidly accelerate and improve biotherapeutic drug discovery and development, from early-stage candidate discovery through product supply.” - <i>Wendy Diller</i><br />
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<b>Photo credit: </b><a href="http://commons.wikimedia.org/wiki/File:CAR_cartoon.png">Wikimedia Commons</a><br />
<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Lisa LaMottahttp://www.blogger.com/profile/05779199833523298820noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-90413454212315999922014-02-21T11:18:00.001-05:002014-02-21T11:18:58.023-05:00Financings of the Fortnight And the Neverending Venture Round<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
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<tr><td class="tr-caption" style="text-align: center;">Somewhere out there, perhaps, is the end of NovImmune's Series B round.</td></tr>
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More than a year ago, our friends at <i>START-UP</i> <a href="http://www.pharmamedtechbi.com/Publications/Start-Up/17/11/SuperSized-Life-Science-Investments-Healthy-Returns">examined the fates of biotechs</a> that had reeled in huge private financing rounds. Giant biotech venture rounds are back with a buzz in 2014 thanks to Juno Therapeutics, which launched in December with a $120 million Series A commitment. Last month it added on with cash from Venrock and Bezos Expeditions, aka Amazon.com chief Jeff Bezos' private money stash. <br />
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But in raw coinage, Juno's A round doesn't hold a candle to what NovImmune has raised in its Series B. Novi-who? It's a Swiss antibody developer founded 16 years ago that in 2006 <a href="http://www.pharmamedtechbi.com/deals/200630602">first notched CHF 58 million</a> ($46 million at the time) for its Series B. Eight years and three extensions later, the Series B now stands at CHF 200.5 million, most recently boosted by a CHF 60 million ($67 million) tranche <a href="http://www.novimmune.com/news/pr140218.html">announced February 18</a> and led by London life science specialists Rosetta Capital, whose partner Jonathan Hepple is joining the NovImmune board. <br />
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That makes NovImmune's Series B the largest biopharma venture round with at least one extension raised in the past decade, according to our Strategic Transactions database. FOTF reached CEO Jack Barbut via email, and he said NovImmune has kept the round open this long to create fairness for all shareholders. "This makes the share structure very easy," Barbut wrote. "For employees, common stock options (sweat equity), and for investors, preferred shares, all [have] the same liquidation rights and thus comply with Swiss statutes, which are very stringent on equal treatment for ALL shareholders." <br />
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CEO since 2000, Barbut said when the Series B started, he didn't expect it to carry on this long. He doesn't know if this recent tranche will be the last.<br />
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We went back a decade into our Strategic Transactions database to see what kind of precedent there might be for NovImmune. We found 59 private companies whose extended rounds reached at least $50 million. Here are the handful, other than NovImmune, that topped $100 million: <br />
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Four of those companies have since gone public and one (Sangart) has gone under, shut down by its main investor, as <a href="http://www.fiercebiotech.com/story/sangart-goes-mia-after-burning-through-260m-plus-rd/2013-11-07">first reported by Fierce Biotech</a>. Meanwhile, Symphogen is in no hurry to go public, as its CEO told Start-Up in <a href="http://www.pharmamedtechbi.com/Publications/Start-Up/18/2/Ahead-Of-The-Mix-Symphogen-Leads-The-Way-To-Antibody-Combinations">this feature</a> last year. <br />
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NovImmune is not only top of the charts for money raised, but it also has no peer in the length of time of the round. None of the companies with blockbuster rounds took more than two years to secure their extensions. A few smaller rounds took longer. For example, Theraclone Sciences began raising its Series B in 2007 as Spaltudaq (we applaud the name change) and brought the total to $50 million about a year ago. Endocyte took five years to raise a nearly $80 million Series C before <a href="http://www.pharmamedtechbi.com/deals/201030383">going public in 2011</a>. And Alvine Pharmaceuticals spent more than four years building its Series A and is now waiting to find out if AbbVie will exercise an option to buy its lead <a href="http://clinicaltrials.gov/ct2/show/NCT01917630">Phase II program in celiac disease</a> or <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/5/14/Alvine-Hopes-To-Bring-The-First-Celiac-Drug-To-Market-With-New-Partner-AbbVie">the entire company outright</a>. (If AbbVie does, it would be one of the very few corporate investors to buy out one of its portfolio companies.)<br />
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NovImmune's Barbut said his investors expect "some sort of liquidity event" too, of course, but in the nearer term he said the company is focused on finding a partner for NI-0101, its anti-TLR4 monoclonal antibody that has entered Phase I. It would also like to advance its NI-0501 program, an anti-interferon gamma antibody, and commercialize it solo. NI-0501 has orphan status in the US and EU in hemophagocytic lymphohistiocytosis, a deadly pediatric autoimmune disease, and has completed a Phase I study.<br />
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NovImmune doesn't seem to have cushioned its cash with a lot of non-dilutive funding. Its biggest deal to date is the outlicensing of an anti-IL17 antibody to Genentech in 2010, no financials disclosed. The candidate completed Phase I in 2013.<br />
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So we've got an orphan disease-focused biologics company with multiple, wholly
owned clinical assets, a partnership with one top-tier biopharma, and
the kind of cash runway that seems to attract more investment these days
from the public markets. The IPO market has welcomed every stripe of biotech, from still-preclinical platforms to heavily capitalized specialty plays, in the past year, so NovImmune seems like an inevitable "ask." If its cards are well played -- keep in mind several banks are in <a href="http://www.novimmune.com/company/investors.html">NovImmune's investor pool</a> -- an IPO could provide a nice bump for those who didn't have to ride the traditional valuation escalator (or be forced off of it) through later rounds.<br />
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We offer a bump, too -- a fist bump to Maureen Riordan, who did much of the work behind the scenes for this column. Without her this week, there would be no... <br />
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<b>Melinta Therapeutics:</b> Known as Rib-X Pharmaceuticals until last fall, antibiotic developer Melinta <a href="http://www.melinta.com/news.php?c=25">hasraised a $70 million Series 3 round</a> led by existing investor Vatera Healthcare Partners. New investors included Falcon Flight, an affiliate of the Santo Domingo Group, and undisclosed backers. As Rib-X, the firm raised more traditionally named A, B and C rounds last decade. But a failed IPO try in 2011, and a set of new investors led by Vatera, have led to a housecleaning. In November 2012, the company disclosed a $67.5 million "Series 2" funding led by Vatera. Last fall, <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2013/10/7/ReNamed-Melinta-Moving-Ahead-With-Delafloxacin-And-Novel-Class-Of-Antibiotics">it unveiled its new name and new executive team</a>, led by CEO Mary Szela. The Series 3 cash will help fund its Phase III study of antibiotic delafloxacin, a differentiated flouroquinolone in testing as an oral, single-dose therapy for uncomplicated gonorrhea. Melinta is aiming for an NDA filing in late 2014. In addition, the money will finance a two-trial Phase III program of delafloxacin in acute bacterial skin and skin structure infections, as well as lead-candidate selection from the firm’s RX-04 discovery program seeking to address serious and life-threatening Gram-negative infections via targeting of novel binding site on the bacterial ribosome. – <i>Joseph Haas</i><br />
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<b>Argos Therapeutics:</b> Immunotherapy is hot, right? Well, yes and no. While the likes of Juno can command above and beyond <span style="mso-bidi-font-weight: normal;">$100 million in a single financing</span>, cancer and infectious disease immunotherapy play Argos raised a mere $45 million <a href="http://www.pharmamedtechbi.com/deals/201330709">in its February 7 IPO</a>, its <a href="http://www.pharmamedtechbi.com/deals/201130333">second try</a> at launching onto the public markets. And that’s only after it had to <span style="mso-bidi-font-weight: normal;">dramatically cut the price</span> to $8 a share from a $14 mid-point of its proposed range. It also had to increase the dilution, selling 5.6 million shares rather than the 4.3 million it had proposed. Existing investors bought 1.4 million shares of the IPO, or roughly a fourth of the deal. No word yet if the underwriters will exercise the overallotment, but the share price has largely treaded water since the offering. Argos investors can take some solace knowing the bargain-priced IPOs of 2013 ended up as top performers of the year. What's discounted now might have legs later, as Argos is one of many biotechs with notable clinical milestones in reach this year, as <i>START-UP</i> <a href="http://www.pharmamedtechbi.com/Publications/Start-Up/19/1/Clinical-Data-In-2014-Could-Trigger-Private-Biotech-Financings">explored in January</a>. Argos might see a boost later this year when it reports Phase IIb data for AGS-004 for treatment interruption in HIV/AIDS patients, although data due in 2016 -- Phase III survival data in renal cell carcinoma -- is more likely to be game-changing for Argos. The firm also expects this year to start two Phase II HIV eradication studies, one in adults and another in pediatric patients. Argos aims in these trials are ambitious – to eliminate the HIV virus or to reduce it to negligible levels. – <i>Stacy Lawrence</i><br />
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<b>Arrowhead Research</b>: RNAi therapeutic developer Arrowhead said February 19 it grossed $104 million in a follow-on offering, selling 5.5 million shares at $18.95 a piece. Of the several public biotechs that sold $100 million-plus in stock this fortnight -- Ironwood Pharmaceuticals, Macrogenics, PTC Therapeutics and Puma Biotechnology were the others -- Arrowhead's inclusion would have been unthinkable this time last year, when it was bumping along in microcap land and had just a few million dollars in cash remaining. Arrowhead isn't strictly an RNAi developer; it has a peptide-drug conjugate in the clinic, too. But there's no doubt RNA interference, riding a revival of sorts highlighted by Alnylam Pharmaceuticals' <a href="http://www.pharmamedtechbi.com/publications/in-vivo/32/2/how-and-why-genzyme-and-alnylam-expanded-their-alliance">giant deal last monthwith Sanofi</a>/Genzyme, is driving the Arrowhead agenda. It's also worth noting that RA Capital, the hedge fund that helped propel <a href="http://www.pharmamedtechbi.com/Publications/IN-VIVO/32/2/Does-Alnylam-Lift-All-Oligo-Boats-The-Dicerna-IPO">the big Dicerna IPO</a>,<span style="mso-spacerun: yes;"> </span>is also a key investor at Arrowhead as of last spring, having led <a href="http://www.pharmamedtechbi.com/deals/201330219">a $35 million offering</a> at $1.83 a share that recapped the company. With its stock now worth more than 10 times as much (it closed February 20 at $21.90) Arrowhead is pushing hard to get its lead RNAi compound, against Hepatitis B, into Phase II. <span style="mso-spacerun: yes;"> </span>While RA, now a 9.9% owner, led a turnover in the company's cap table, it wasn't a bloodbath. Arrowhead's longtime CEO Chris Anzalone is still at the helm, and the board remains the same. – <i>Alex Lash</i><br />
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<b>Pronutria</b>: Pronutria revealed February 13 a $12.5 million Series B round, with unnamed private investors participating alongside Flagship Ventures. CEO Robert Connelly <a href="http://www.pharmamedtechbi.com/Publications/The-Pink-Sheet-Daily/2014/2/14/Eyeing-Multiple-Development-Paths-Pronutria-Takes-125-Million-Series-B">told our colleagues at <i>"The Pink Sheet"</i></a> that Flagship provided less than half of the new round, while “business entities, individuals and family offices” supplied the remainder. Flagship created Pronutria within its VentureLabs program in 2011, quietly funding it with a $10.8 million Series A round over a two-year period before lifting the lid <a href="http://www.pharmamedtechbi.com/publications/start-up/18/10/with-venture-cash-pronutria-mines-food-supply-for-drugs-and-supplements">last October</a>. Much of the Series B, which Connelly said is probably Pronutria's final venture round, will be used for clinical trials on two muscle-protecting candidates that preserve strength in frail, elderly people with sarcopenia, the loss of muscle mass that can occur during periods of hospitalization. The candidates, PN-107 and PN-365, are formulations of the amino acid leucine delivered as small “shot”-sized beverages similar to bottled energy products found on supermarket shelves. The specific pharmacokinetics and efficacy of each candidate, and the effects of their specific balances of amino acids, will be compared with each other in the trials. The company is still deciding on a regulatory pathway for each one, including possibly developing them as nutritional supplements, medical foods or pharmaceutical products, each of which has its own requirements. Initial clinical trials, now underway, are scheduled for completion by mid-year; Connelly said the company also is mulling parallel development of drug and non-drug formulations of similar product candidates. Further down the line, Pronutria is aiming for products addressing the metabolic, gastrointestinal, immune and renal disease areas, as well as beneficial products for patients with rare diseases and those going through chemotherapy. Whatever drug products Pronutria develops will reside in a separate business unit, which will help ease eventual sales or spin-outs. – <i>Paul Bonanos</i><br />
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<b>Best of the Rest (Highlights of Other Activity This Fortnight):</b> Endocrine disease-focused <b>Versartis</b> <a href="http://www.pharmamedtechbi.com/deals/201430065" target="_blank">raised $55M in Series E financing</a>, and concurrently <a href="http://www.sec.gov/Archives/edgar/data/1513818/000119312514056951/d650566ds1.htm" target="_blank">filed for an IPO</a>…to support the launch of opioid dependence drug <i>Bunavail</i> in the second half of this year, <b>BioDelivery Sciences</b> <a href="http://bdsi.investorroom.com/2014-02-10-BioDelivery-Sciences-to-Raise-60-Million-in-Registered-Direct-Offering-From-Institutional-Investors" target="_blank">grossed $60M</a> in a registered direct offering…<b>PTC Therapeutics</b> <a href="http://www.prnewswire.com/news-releases/ptc-therapeutics-announces-closing-of-registered-public-offering-of-common-stock-including-full-exercise-of-underwriters-option-to-purchase-additional-shares-246185011.html" target="_blank">publicly sold $126M in a FOPO</a> to complete Phase III development and gain regulatory approval of ataluren in Duchenne muscular dystrophy and cystic fibrosis caused by nonsense mutations, in the wake of last month’s EMA/CHMP negative opinion on that candidate’s MAA…<b>Concert Pharma</b> <a href="http://www.pharmamedtechbi.com/deals/201430021" target="_blank">priced its IPO</a> at $14, the top end of its range, to net $78 million...three Israeli biotechs – <a href="http://www.sec.gov/Archives/edgar/data/1595353/000114420414006610/v367324_f1.htm" target="_blank"><b>Galmed</b></a>, <a href="http://www.sec.gov/Archives/edgar/data/1596812/000114420414006928/v367497_f1.htm" target="_blank"><b>Bio Blast</b></a>, and <a href="http://www.sec.gov/Archives/edgar/data/1593984/000104746914000737/a2218177zf-1.htm" target="_blank"><b>MediWound</b></a> – are all hedging their bets and trying to float on Nasdaq…and <b>PDL BioPharma</b>, which manages patents and royalty assets, <a href="http://www.pharmamedtechbi.com/deals/201430053" target="_blank">completed a $261M convertible notes offering</a>. – <i>Amanda Micklus</i><br />
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<i>Photo courtesy of <a href="http://www.flickr.com/photos/mikemike/">Mike Mantin</a> on flickr, via a Creative Commons license. </i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Amanda Micklushttp://www.blogger.com/profile/02445930031260123049noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-60625226802322168882014-02-14T12:37:00.000-05:002014-02-14T15:39:57.661-05:00Deals Of The Week: UCSF Catalyzes R&D Tech-Transfer Deals With Private Sector<div class="separator" style="clear: both; text-align: center;">
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Neither MedImmune, the biologics arm of AstraZeneca, nor the University of California, San Francisco, is a stranger to R&D collaboration between private industry and academia, but the <a href="https://www.medimmune.com/media/press-releases/2014/02/11/medimmune-announces-research-collaboration-with-uc-san-francisco">agreement they signed</a> on Feb. 11 is somewhat unique in that it will take advantage of a UCSF program that was intended to provide external expertise that might help to move basic research into more advanced stages.<br />
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At UCSF’s Clinical and Translational Science Institute, the Catalyst Awards program benefits from the input of industry and academic advisors who review burgeoning science and help select which projects should advance further and be given increased resources. CTSI oversees UCSF researchers working on therapeutics, devices, diagnostics and digital health applications, explained June Lee, director of early translational research at CTSI.<br />
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<a href="http://accelerate.ucsf.edu/funding/catalyst">The Catalyst program</a> started with about 120 advisors, and now has about 140 and is growing in numbers. “These folks are from all different disciplines, mostly from industry, and represent various different sectors and areas of expertise for product development in the life sciences,” Lee said. According to her, it’s more of a happy coincidence than a plan that the Catalyst Awards program spurred a broad-based partnership – considering both small- and large-molecule projects in cardiovascular and metabolic disease, oncology, respiratory, inflammation and autoimmune disorders, neuroscience and infectious disease – with MedImmune.<br />
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The collaboration could end up bringing early-stage assets to MedImmune (or AstraZeneca) in any of those areas, Lee added, since UCSF has 2,400 faculty, of whom about 1,300 are doing research primarily. “Our people are working in all areas of research, and that’s not accounting for post-docs or graduate students,” she said.<br />
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“Our primary goal was to enable and support of early-stage technology projects at UCSF,” she said. “For things that have product potential, we bring in the necessary expertise to help the faculty move projects along. Even though spurring deal-making may not have been our primary purpose, the program really is a very appropriate portal for people on the outside to look through to determine which university technologies are most ready to be licensed out.”<br />
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Terms have not been disclosed for the MedImmune/UCSF tie-up but Senior VP and Head
of the Respiratory, Inflammation and Autoimmune Innovative Medicines
Unit (iMED) Bing Yao said that unlike the Johns Hopkins and University of Maryland, Baltimore arrangements signed last year, which feature an overall R&D funding allocation, funding for this partnership will be determined on a case-by-case basis.<br />
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“Some of the programs, we will want to bring to the next stage – they could be preclinical or [we could want to move them] further into clinical development,” Yao noted. “This way, we can give a lot of input. As a company developing products for multiple therapeutic areas, we can bring our expertise to facilitate [the projects] but each program will be unique.”<br />
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The agreement extends for three years, with an option to extend it. MedImmune and AstraZeneca personnel will join with the Catalyst Awards advisors and UCSF staff to determine which products move forward with MedImmune/AstraZeneca backing. And the company will have exclusive options rights to the programs it backs, Yao said.<br />
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In the six months, Gaithersburg, Md.-based MedImmune has shored up its local base by signing a five-year, $6.5 million, <a href="https://www.medimmune.com/media/press-releases/2013/12/11/medimmune-and-the-johns-hopkins-university-announce-five-year-$6.5-million-collaboration-to-drive-medical-research-and-discovery">broad-based R&D partnership</a> with Johns Hopkins University in December and a <a href="https://www.medimmune.com/media/press-releases/2013/09/25/medimmune-and-university-of-maryland-baltimore-announce-five-year-$6-million-research-collaboration-to-drive-science-innovation-in-maryland">five-year, $6 million pact</a>
with University of Maryland, Baltimore in September. It also has
R&D relationships with academia in the U.K. and, now, with the UCSF
partnership, gets better access to technological advances stemming from
the biotechnology hub in the San Francisco bay area, Yao told Deals of the Week.<br />
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UCSF, meanwhile, is one of five founding members of the <a href="http://addconsortium.org/">Academic Drug Discovery Consortium</a>, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/10/15/Academic-DrugDiscovery-Units-Team-Up-To-Share-Knowledge-Facilitate-Partnering?result=1&total=1&searchquery=%253fq%253d14131014003">founded in 2012 to serve as a clearinghouse </a>for
both academia and industry on research underway within U.S. and
international drug research programs. Since 2010, UCSF has negotiated
research collaborations with Genentech, Pfizer, Sanofi and Bayer, while <a href="http://www.elsevierbi.com/deals/201020489">licensing a preclinical antibody for organ failure </a>to Stromedix and <a href="http://www.elsevierbi.com/deals/201220306">genetic encoding intellectual property</a> for Parkinson’s disease to uniQure.<br />
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While that agreement was signed, other M&A and licensing activity was heating up the cold and snowy winter. Read on for the rest of ....<br />
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<b>Mallinckrodt/Cadence: </b>Mallinckrodt will have a lot of work to do to make good on the $1.3 billion it’s <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/2/11/Covidien-SpinOut-Mallinckrodt-Makes-First-Move-With-13B-Cadence-Buy?result=1&total=1&searchquery=%253fq%253d14140211004">paying</a> for Cadence Pharmaceuticals, a price more than 10 times the projected 2013 sales for Cadence’s sole product, <i>Ofirmev</i> (intravenous acetaminophen). Mallinckrodt says the acquisition gives it a third therapeutics platform, in the hospital setting, in addition to its existing focus on generic drugs and pain medications. The specialty drug company plans to keep Cadence’s sales and marketing capabilities and acquire additional hospital products to sell through them. Mallinckrodt announced the acquisition Feb. 11, its first major transaction since it was <a href="http://www.elsevierbi.com/deals/201330043">spun-out</a> from medical device and supply company Covidien in July. Ofirmev <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/72/45/Cadence-Builds-Case-For-Branded-IV-Acetaminophen-Can-It-Reduce-Opioid-Use?result=1&total=1&searchquery=%253fq%253d00101108005">launched in January 2011</a> and is approved to treat mild-to-moderate pain, for the management of moderate-to-severe pain with adjunctive opioid analgesics, and for the reduction of fever. It has expected net product revenues of $110.5 million for 2013. That’s more than twice the $50.1 million posted in 2012, its first full year of sales. As of Sept. 30, Cadence shareholders included Fidelity Management (7.6 million shares), T. Rowe Price Associates (7.2 million), Capital Research (7.1 million), Wellington Management (6 million), The Vanguard Group (3.4 million), NEA (2.1 million) and BlackRock (1.9 million). Mallinckrodt will pay $14 per share for Cadence, a 32% premium to the trailing 30-trading-day volume weighted average price; in 2006, the company <a href="http://www.elsevierbi.com/deals/200630395?result=1&total=1&searchquery=%253fq%253d200630395">completed an IPO </a>at $9 per share with a valuation of about $250 million. That gives shareholders who bought and held IPO shares a roughly 1.5x return. - <i>Stacy Lawrence and Jessica Merrill</i><br />
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<b>Pierre Fabre/Aurigene: </b>Pierre Fabre Group, the French pharmaceuticals and cosmetics firm whose sales are split almost equally between drugs and skincare cosmetics, has <a href="http://www.pierre-fabre.com/en/news/immuno-oncology-licensing-agreement-between-aurigene-and-pierre-fabre-pharmaceuticals">acquired worldwide development and commercialization rights</a> (excluding India) to a novel immune checkpoint modulator, AUNP-12, from the Indian drug-discovery firm Aurigene Discovery Technologies. AUNP-12 is the only peptide under development as a PD-1 immune modulator, the companies say. The candidate could be associated with greater efficacy and fewer side effects when used as part of combination therapies, they announced Feb. 12. The peptide achieves effective levels in vivo after subcutaneous dosing, and has inhibited tumor growth and metastasis in preclinical models of cancer. Aurigene, the Bangalore-based biotech that has collaborated with six of the top 10 pharmaceutical companies since its inception in 2002, will receive an undisclosed upfront payment from Pierre Fabre, and milestone payments based on development, regulatory and commercial progress. The deal terms are in line with others in this space, the companies said. It’s also the first major deal the French company has signed since the <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/34/European-Notebook-ShakeUp-At-EMA-Restructuring-At-Pierre-Fabre-Reinhardt-Returns-To-Novartis?">death of its founder</a>, Pierre Fabre, in the middle of last year. Pierre Fabre specializes in the development of anti-cancer drugs, either alone or with partners; with marketed drugs that include<i> Javlor</i> (vinflunine) and <i>Navelbine</i> (vinorelbine), while Aurigene is a profitable Indian biotech that generates lead compounds and progresses them to preclinical development in concert with collaborators, particularly in oncology and inflammation. - <i>John Davis</i><br />
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<b>Retrophin/Manchester:</b> Retrophin, which <a href="http://www.elsevierbi.com/deals/201430012?result=1&total=1&searchquery=%253fq%253d201430012">netted $37.4 million in an initial public offering</a> in January, has arranged to purchase privately held Manchester Pharmaceuticals for $62.5 million, including $29.5 million upfront. Announced Feb. 12, the <a href="http://amda-1pla2o.client.shareholder.com/releasedetail.cfm?ReleaseID=825424">transaction</a> is expected to close on March 1, Retrophin said. Like Retrophin, Manchester focuses on rare diseases. The Ft. Collins, Colo.-based firm has two FDA-approved drugs in its portfolio – <i>Chenodal </i>(chenodeoxycholic acid), which is indicated for patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age, and <i>Vecamyl</i> (mecamylamine HCI tablets), indicated for the management of moderately severe to severe essential hypertension and uncomplicated cases of malignant hypertension. Retrophin said it also will seek quick FDA approval for Chenodal, the only FDA-approved chenodeoxycholic acid, for cerebrotendinous xanthomatosis (CTX), a rare metabolic disorder that can cause severe intellectual disability or even prove fatal in young patients. The New York firm also guided that it anticipates revenue of between $10 million and $12 million this year overall, and $19 million to $21 million in 2015. - <i>Joseph Haas</i><br />
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<b>Debiopharm/Affinium:</b> Swiss biopharma Debiopharm Group broadened its antibiotic portfolio by <a href="https://www.debiopharm.com/medias/press-release/item/3393-debiopharm-group-to-acquire-affinium-s-antibiotic-clinical-assets-and-platform-to-identify-and-develop-targeted-antibiotics.html">acquiring key assets</a> from Toronto-based Affinium Pharmaceuticals on Feb. 11. The deal includes two narrow-spectrum anti-bacterial candidates, the Phase IIa FabI inhibitor AFN-1252 and its Phase I prodrug, AFN-1720. Debiopharm also acquired Affinium’s technology platform with which it created the two drugs. Terms of the arrangement weren’t disclosed. Affinium says its drugs represent a new class of antibiotics that inhibit the type-II fatty acid synthesis pathway, known as FAS-II, essential for bacterial growth. Its compounds have shown promise in combating staphylococcus infections, including methicillin-resistant Staphylococcus aureus and vancomycin-intermedia Staphylococcus aureus infections, while allowing intravenous-to-oral switching for patients leaving hospital care. Debiopharm expects to develop a companion diagnostic to select appropriate patients as AFN-1720 progresses through the clinic. Debiopharm entered the anti-bacterial field last fall, when it struck a deal with India’s TCG Life Sciences to develop new antibiotics. The company is aiming to develop drugs that preserve existing gut flora while overcoming resistance to broad-spectrum drugs. Affinium <a href="http://www.elsevierbi.com/deals/201130374?result=1&total=1&searchquery=%253fq%253d201130374">raised $33 million</a> in two rounds of funding in 2007 and 2011, from investors including SV Life Sciences, Genesys Capital Partners, Forward Ventures, Oxford Bioscience Partners and Ontario Emerging Technologies Fund. - <i>Paul Bonanos</i><br />
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<b>Aveo/Astellas: </b>In our “No-Deal of the Week,” Aveo Pharmaceuticals and Astellas announced Feb. 14 that they have <a href="http://newsroom.astellas.us/index.php?s=31393&item=137035">terminated a partnership</a> around renal cell carcinoma candidate tivozanib. The Japanese pharma <a href="http://www.elsevierbi.com/deals/201120071">paid $125 million upfront</a>, with $50 million pegged to cover Aveo’s R&D expenses, in 2011 for worldwide rights, except for Asia, to develop, manufacture and market the compound, a tyrosine kinase inhibitor of all vascular endothelial growth factor receptors. An NDA was filed in November 2012, but an <a href="http://www.elsevierbi.com/publications/the-pink-sheet-daily/2013/6/11/tivozanib-complete-response-shows-increased-communications-cant-always-save-an-nda">FDA “complete response” letter </a>and unenthusiastic reception at an advisory committee left the companies not expecting approval in advanced RCC. They terminated the trial program for that indication and decided to re-focus on developing tivozanib for breast and colorectal cancers. Now, Astellas has decided to exit the collaboration for what it calls “strategic” reasons, and the two companies are terminating a Phase II program studying the compound in CRC. All rights to tivozanib will return to Aveo as of Aug. 11. - <i>J.A.H.</i><br />
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<b>Photo credit: </b><a href="http://commons.wikimedia.org/wiki/File:Catalytic_cycle_of_the_Stille_reaction.png">Wikimedia Commons</a><br />
<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Joseph Haashttp://www.blogger.com/profile/08154849043009343039noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-83549305343042735802014-02-07T16:08:00.001-05:002014-02-07T16:26:37.478-05:00Can Novel-Novel Combinations Work? Deals Of The Week Watches Merck Test The Waters<div class="separator" style="clear: both; text-align: center;">
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<br />
Merck & Co. Inc.’s Feb. 5 announcement that it is collaborating with three companies to test various combinations of its investigational oncology compound MK-3475 with their drugs highlights the extent to which the<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/40/Merck-Bets-Big-On-Oncology-In-New-RampD-Strategy?result=1&total=1&searchquery=%253fq%253d00131007005"> big pharma is committed to building a major presence in onco-immunotherapy</a>. The company appears prepared to take aggressive steps to achieve its aims, even as it cuts back in other parts of its business.<br />
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The announcement also signals just how important combination drug trials are becoming to certain areas of cancer therapy development, and in particular the importance of “novel-novel” combination trials. Until recently, the industry rarely, if ever, undertook trials in which two investigational-stage drugs are put through clinical development together in the hopes that results will be stronger than either would have garnered alone. With the exception of some government sponsored projects, even combining two novel drugs made by the same company has been rare. Lack of scientific drivers and operational and legal hurdles have kept potential partners at bay.<br />
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Certainly science is shifting, and many oncology researchers believe early-stage collaborations are inevitable, given the direction of scientific innovation and the costly and time-consuming nature of clinical trials. Furthermore, FDA has shown greater willingness to consider novel-novel combinations in recent years, issuing a first draft guidance in December 2010, and, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/6/17/CoDevelopment-Guidance-Gives-More-Attention-To-IND-NDABLA-Submissions?result=1&total=1&searchquery=%253fq%253d14130614006">in June 2013, a final guidance, which clarifies its thinking on the potential regulatory path </a>for approving two new drugs as a combination regimen.<br />
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<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2011/4/4/Roche-CoDeveloped-Drugs-Deliver-Early-Synergistic-Results-Without-Added-Toxicities?result=1&total=1&searchquery=%253fq%253d14110404002">Roche</a>, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/4/8/Cyclacel-NovelNovel-Sequence-Promising-In-Tough-Cancers?result=1&total=1&searchquery=%253fq%253d14130408002">Cyclacel Pharmaceuticals Inc.</a>, and just maybe one or two others, are currently testing combinations of their own investigational drugs--developments are followed diligently by "The Pink Sheet"'s Shirley Haley and others on the team. But those initiatives pale in terms of scope with <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/2/5/Pushing-Hard-on-PD1-Merck-Does-a-Trio-of-Combo-Development-Deals?result=1&total=1&searchquery=%253fq%253d14140205003">Merck’s willingness to work with Pfizer Inc., Incyte Corp., and Amgen Inc.</a> The drug involved is a <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/23/Big-Pharma-Casts-Immune-Checkpoint-Net-Wide-Across-Tumor-Types?result=1&total=1&searchquery=%253fq%253d00130610008">high-profile litmus test for Merck: MK-3475</a>, a PD-1-specific antibody, is currently in Phase III as a monotherapy for melanoma and is being studied in a total of 13 clinical trials involving more than 4,000 patients suffering from a variety of cancers. The company announced in January that it is starting a rolling NDA for the drug, which it expects to complete in mid-2014.<br />
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Investigators will evaluate MK-3475's safety and efficacy when combined with Pfizer’s small molecule kinase inhibitor Inlyta (axitinib) in patients with renal cell carcinoma, and also with the investigational immuno-oncology drug PF-05082566 in multiple cancers. Inlyta already is on the market as a monotherapy for RCC, and ‘2566, which targets the human 4-1BB receptor, is in Phase I, according to Pfizer’s website.<br />
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In the second agreement, Merck will cooperate with Incyte on a randomized, double-blinded Phase I/II study of MK-3475 and Incyte’s investigational drug INCB24360, an immunotherapy that inhibits indoleamine 2, 3-dioxygenase (IDO) in patients with previously treated metastatic and recurrent non-small cell lung cancer. Finally, MK-3475 and Amgen’s investigational immunotherapy talimogene laherparepvec will be put to the test in a Phase Ib/II study in patients with previously untreated mid- to late-stage melanoma.<br />
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Merck already has signed a similar deal with GlaxoSmithKline PLC around combining MK-3475 with GSK’s <i>Votrient </i>(pazopanib) in advanced RCC, and it seems ready for more. “You can expect to see more of thse deals, both in terms of monotherapy and in combinations,” said Merck's VP, Clinical Oncology Research Eric Rubin on the day the company announced its triple play. As for the particular compounds chosen, he noted, these were areas of particular interest based on “our understanding of drug mechanisms and the potential of combination effects that will be synergistic in their efficacy.” <br />
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He would not discuss details of the data Merck looked at to select its partners, but said each case had “a strong rationale.” A fair amount of literature has been published on IDO as a
target and its involvement in immune regulation and in particular with
melanoma, for example, he said. Nor would he discuss timing of read outs from any trials, all of which are expected to begin later this year. The Incyte compound is currently in Phase II as a monotherapy for ovarian cancer and as a combination therapy with Bristol-Myers’ Squibb’s Yervoy (ipilimumab) for advanced melanoma.<br />
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Merck’s previous experience with a novel-novel combination trial involving its AKT (part of the phosphaltidylinositol-3 kinase pathway) inhibitor and AstraZeneca PLC’s MEK (mitogen-activated protein kinase) inhibitor also likely paved the way. <a href="http://www.elsevierbi.com/Publications/IN-VIVO/28/5/AZ-and-Merck-Moving-Forward-Cautiously?result=1&total=1&searchquery=%253fq%253d2010800093">That effort began in 2009 and was among the first, if not the first, examples of two big companies collaborating</a> in such close fashion on such early-stage compounds. The Merck drug was in Phase I trials at the time the deal was signed, while the AZ drug was in Phase II but had not yet reached proof of concept. The timing inevitably led to concerns about sharing of proprietary data and intellectual property, as well as scientific uncertainties and questions about potential regulatory uncertainties down the road. <br />
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Merck isn’t saying much about how the new deals are managing the operations or funding of the trials, but Rubin noted that the earlier relationship with AZ has been positive and “a good way to learn how to do this.” Some of the learnings resulted in other trials, he said, including as one of four arms of the BATTLE-2 trial, which investigators will discuss at the American Association of Cancer Research meeting in April. That trial, now recruiting 450 patients with advanced non-small-cell-lung cancer, is expected to complete in 2017, according to Clinicaltrials.gov.<br />
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The structure of the 2009 deal was fairly simple, with Merck sponsoring the Phase I study and both companies splitting the costs. A joint governance committee with shared decision making rights oversaw the program. IP arising from the collaboration is to be shared by the inventors, and most importantly, each company was to have freedom to study its compound alone or with other drugs as well. <br />
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Merck’s been active on other fronts in the deal space, and recently revamped its R&D unit's business development group, bringing in a new leader, <a href="http://www.merck.com/licensing/news-and-events/iain-dukes-announcement.html">Iain Dukes from Amgen</a>. Other companies are also doing their share of wheeling and dealing, as is seen in the latest round of ...<i>--Wendy Diller</i><br />
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<b>Merck/ Ablynx:</b> Merck has turned again to Ablynx’s Nanobody technology platform to identify new product candidates, this time compounds directed at immune checkpoint modulators, currently a hot area of research following the success of Yervoy.<br />
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Building on their initial research partnership started in October 2012 in neuroscience, <a href="http://www.elsevierbi.com/deals/201220444?result=1&total=1&searchquery=%253fq%253d201220444">Merck and Ablynx have now agreed a research collaboration and licensing agreement t</a>hat will discover and develop several predefined Nanobodies that could become cancer immunotherapies. Nanobodies are based on single-domain antibody fragments, and have several beneficial features compared with conventional small-molecule or antibody-based therapies, including the possibility of being linked together in bi-specific or tri-specific constructs. Researchers believe combinations of immune checkpoint inhibitors could be important in the treatment of certain cancers.<br />
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Ablynx will receive an upfront of €20 million ($27 million) and up to €10.7 million in research funding during the three years of research covered by the<a href="http://hugin.info/137912/R/1758542/594579.pdf"> new collaboration signed Feb. 3</a>. The Ghent, Belgium-based biotech could also receive development, regulatory and commercial milestones on achieved sales thresholds for a number of products that could amount to a chunky €1.7 billion, plus tiered royalties. Merck will develop, manufacture and commercialize any products resulting from the collaboration. <br />
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Ablynx has been active over the past six months in signing up Big Pharma companies for research collaborations and partnerships. In September 2013 it strengthened an existing collaboration with Merck Serono by setting up a dedicated discovery team <a href="http://hugin.info/137912/R/1730532/580431.pdf">for the German Big Pharma at Ablynx</a>. In the same month, U.S company AbbVie licensed the anti-interleukin-6 Nanobody, ALX-0061, for global development.<i>-- John Davis</i><br />
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<b>Accelerating Medicines Partnership: </b>NIH Director Francis Collins outlined a broad public/private partnership Feb. 4 to speed up and increase the success rate of research into finding new biological pathways for therapeutic intervention. <a href="http://www.elsevierbi.com/publications/the-pink-sheet-daily/2014/2/4/nih-and-10-biopharmas-hatch-plan-to-accelerate-and-improve-therapeutic-pathway-research">Called the Accelerating Medicines Partnership (AMP)</a>, the alliance will combine the efforts of NIH, FDA, 10 biopharma companies, and the non-profit community to transform the current discovery model for new drugs and diagnostics.<br />
The five-year effort is funded with $230 million provided in approximately a 50/50 split between NIH and the pharmaceutical industry. It will focus first on characterizing effective biomarkers and distinguishing biological targets most likely to respond to new therapies in three areas: Alzheimer’s disease, type 2 diabetes and a pair of autoimmune disorders, rheumatoid arthritis and systemic lupus erythematosus.<br />
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AMP’s work will be considered “pre-competitive” – all parties have agreed to forego seeking any intellectual property rights on the group’s work, which will be disseminated for free usage by any and all medical researchers, public or private, affiliated or independent. “Competition will come later after the initial discovery phase where we, the AMP, collectively identify the most compelling targets and then the full competitive power of the pharmaceutical industry will kick in to develop the actual therapeutic molecules,” Collins said.<br />
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The companies participating in AMP are AbbVie, Biogen Idec, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Eli Lilly, Merck, Pfizer., Sanofi and Takeda. Also taking part are PhRMA, the Foundation for the NIH and a set of disease advocacy groups focused on the four diseases chosen for initial focus. <i>--Joseph Haas </i><br />
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<b>Myriad/ Crescendo</b>: Having watched Crescendo Bioscience gain a foothold in the market for inflammatory and autoimmune diagnostics market, Myriad Genetics is now moving to acquire the company – a right it obtained via a novel strategic investment agreement in 2011. That agreement included a $25 million loan – nondilutive financing that was to be repaid in years 4-6 – and a three-year option to acquire Crescendo at a multiple of revenues once those revenues hit an initial threshold and according to a formula gauging their rate of growth after that.<br />
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In November 2013, Myriad said Crescendo<a href="http://invivoblog.blogspot.com/2013/11/happy-thanksgiving-from-deals-of-week.html"> had met the terms </a>for exercising the option. The purchase price – $270 million cash, less $25 million payback on the loan – was calibrated according to the pre-established revenue target. The<a href="http://investor.myriad.com/releasedetail.cfm?ReleaseID=823235"> press release announcing the acquisition</a> noted that Crescendo’s sales for the most recent quarter were $10 million. Sales of Crescendo’s inaugural product, the Vectra DA protein-based diagnostic for measuring disease activity in RA patients, surged in 2013 owing to a confluence of factors: In May, Crescendo obtained CMS coverage, representing close to 40% of the RA population. It simultaneously expanded the Vectra sales force from 20 to 33.<br />
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Then in June, the company presented ten posters at the<a href="http://www.eular.org/"> EULAR Annual Meeting,</a> which further drove interest in ordering the test. The deal is in keeping with Myriad’s goal of diversification in therapy area (beyond oncology) and technology (protein versus DNA/RNA tests). (A more detailed analysis will be out shortly in Informa's monthly strategy publication, <i>IN VIVO</i>.) The announcement did little to deflect analyst concerns over Myriad’s immediate prospects, however. CMS recently reduced payments for its BRACAnalysis tests by almost half, and the company is facing new competition in BRCA testing following the US Supreme Court decision last June invalidating BRCA gene patents. As Michael Yee of RBC Capital Markets said in a note following Myriad's February 4 earnings call, during which the Crescendo acquisition was discussed, “we think the stock remains a battle of Bulls/Bears this year until more visibility occurs.”<i>--Mark Ratner</i><br />
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<b>Valeant/ PreCision:</b> When it comes to acquisitions, Valeant Pharmaceuticals investors have high expectations now that CEO J. Michael Pearson have vowed the company will become a top-five pharma by 2016 with business development the key avenue to meeting that goal. Valeant announced its first acquisition of the year Feb. 3, buying PreCision Dermatology Inc., a prescription and cosmetic dermatology firm. Valeant agreed to buy the privately-held dermatology company for $475 million in cash plus $25 million in milestones. <br />
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Relative to some of Valeant’s recent acquisitions like Medicis Pharmaceutical Corp. for $2.6 billion in 2012 and Bausch & Lomb Inc. for $8.7 billion in 2013, the PreCision buyout is smaller and should be one that an experienced buyer like Valeant can quickly integrate into its operations. PreCision’s sales are expected to be approximately $130 million in 2014, according to Valeant. The company, based in Cumberland, R.I., employs about 175 people. It was established in December 2010 from a spinout of Onset Therapeutics, a subsidiary owned by Collegium Pharmaceutical Inc. PreCision’s initial investors were Essex Woodlands, Boston Milennia Partners, Frazier Healthcare and Westfield Capital Management. <br />
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The acquisition of Medicis catapulted <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2012/9/4/Valeant-Continues-Buying-Spree-With-26B-Acquisition-Of-Medicis?result=1&total=1&searchquery=%253fq%253d14120904004">Valeant into a leader position in dermatology,</a> where it ranks second behind Galderma SA. The company added more dermatology businesses in 2013, including <a href="http://www.elsevierbi.com/deals/201310035?result=1&total=1&searchquery=%253fq%253d201310035">Obagi Medical Products Inc., the maker of aesthetic and prescription skin-care lines</a>, which it bought for $418.4 million. In December, <a href="http://www.elsevierbi.com/deals/201310176?result=1&total=1&searchquery=%253fq%253d201310176">Valeant said it would buy Solta Medical Inc.</a> for $237 million for its aesthetic devices, which are sold to dermatologists<i>.--Jessica Merrill</i><br />
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<b>Novo Nordisk/ Zosano</b>: In the crowded market for diabetes drugs, methods of administration and delivery systems can be important differentiation factors. <a href="http://www.zosanopharma.com/index.php/20130514224/News/Press-Releases/Zosano-Pharma-Enters-into-a-License-Agreement-with-Novo-Nordisk-to-Deliver-Semaglutide-Using-Zosano.html">Novo Nordisk added a new delivery system to its experimental drug pipeline on Feb. 5</a>, when it partnered with Fremont, Calif.-based Zosano Pharma Inc. to gain rights to its microneedle patch system. Novo Nordisk will attempt to create a transdermal delivery system for semaglutide, its Phase III glucagon-like peptide-1 analogue for type 2 diabetes.<br />
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Zosano received an up-front payment of undisclosed size to cement the deal. Novo Nordisk agreed to pay development, regulatory and commercial milestones worth up to $60 million for the first product jointly developed under the agreement, as well as royalties. The companies will also investigate other GLP-1 products, each of which could trigger an additional $55 million in milestone payments. The companies will collaborate on development during the preclinical product stage, but Novo Nordisk will cover further development costs and reimburse Zosano for other development and manufacturing costs.<br />
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Spun out of Alza Corp. in 2006, Zosano has raised more than $120 million from investors including New Enterprise Associates, ProQuest Investments, and Nomura Phase4 Ventures. It has previously tested its microneedle patches in products based on Eli Lilly’s Forteo (teriparatide) and Amgen’s Epogen (epoetin alfa).<i>--Paul Bonanos</i><br />
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<i>Hat tip to James Moore, Certified Accountants for image</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Wendy Dillerhttp://www.blogger.com/profile/03585826601777354053noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-3102176258209698692014-02-07T10:23:00.002-05:002014-02-07T10:23:31.401-05:00These Days, You Can't Spell Financings Of The Fortnight Without "I-P-O"<div class="separator" style="clear: both; text-align: center;">
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It turns out a lot of <a href="http://www.morewords.com/contains/ipo/">the words</a> that contain the letters "IPO" are biomedical words: <br />
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Pluripotent. Liposomal. Adiposis. <a href="https://www.wordnik.com/words/gallipot">Gallipot</a>. <br />
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And it turns out a lot of biomedical <i>companies </i>have IPO in them, too. Since we last met <a href="http://invivoblog.blogspot.com/2014/01/financings-of-fortnight-asks-for.html">14 days ago</a>, dear reader, a stunning 13 biotechs have made their public debuts, although if not for Eleven Biotherapeutics, it would have been 12. <br />
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There are all kinds of ways to slice and dice this baker's dozen; one way is to <a href="http://www.elsevierbi.com/Publications/Start-Up/18/8/Pop-Goes-The-IPO">look at first-day pops</a>. Indeed, our colleagues at "The Pink Sheet" will soon have a detailed look at the crazy first-day run-up of RNAi developer Dicerna Therapeutics; the 207% gain was the biggest in biotech since Antigenics jumped 241% in February 2000, according to Renaissance Capital. (More on Dicerna's IPO in the roundup below.)<br />
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But with the momentum that began in earnest last spring showing no signs of tapering off, we're curious about a different indicator: insider purchases. As soon as IPOs began to rebound from the financial crisis, insiders often did heavy lifting to get the deals off the ground. <br />
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But those levels began to decline in 2013, as Atlas Venture partner Bruce Booth <a href="http://lifescivc.com/2013/10/insider-participation-drops-as-biotech-offerings-up/">noted on his blog</a> last fall. He also noted that insider participation could signal a cooling of the market. Well, yes, but as we noted on this blog in early 2012, it's hard to draw conclusions about deal-by-deal participation. Is heavy insider presence a sign of desperation to get a deal done, or is it a sign of singular enthusiasm? With crossover investors already on the cap table and wanting more at IPO, and with some VCs playing more frequently on the public side of the fence, it can be hard to tell. What's more, SEC filings don't always divulge the true level of insider participation.<br />
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With all that, let's round up what this year's IPOs have revealed: <br />
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Here are the 13 IPOs the past two weeks, plus GlycoMimetics on January 9, and the percentage of insider participation noted in the regulatory filings: <br />
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<b style="mso-bidi-font-weight: normal;">Company
Name</b></div>
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<b style="mso-bidi-font-weight: normal;">Insider
Participation at IPO</b></div>
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Dicerna</div>
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57%</div>
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GlycoMimetics</div>
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29%</div>
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Celladon</div>
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<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
25%</div>
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Eleven</div>
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<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
24%</div>
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<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
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Trevena</div>
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23%</div>
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uniQure</div>
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22%</div>
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Genocea</div>
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<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
21%</div>
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Egalet</div>
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20%</div>
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<td style="background: #92D050; border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
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Auspex</div>
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<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
12%</div>
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<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
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Cara</div>
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<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
7%</div>
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<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
Ultragenyx</div>
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<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
0%</div>
</td>
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<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
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Acucela</div>
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<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
0%</div>
</td>
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<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
Revance</div>
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<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
0%</div>
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</tr>
<tr style="mso-yfti-irow: 14; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.9pt;" valign="top" width="85">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
Biocept</div>
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<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48">
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;">
0%</div>
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That's an average of 16% raised from insiders, but with caveats: some of these numbers (highlighted green) are based on filings which note that insiders <i>indicated an interest</i> of purchasing a certain amount. At the time of this writing, it's not clear whether they actually pulled the trigger, but often those indications don't change much. Other caveat: The percentages don't factor in the green shoe. In other words, some of the numbers you see above will change as more information emerges.<br />
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For what it's worth, our own IPO data show insider participation in 2013 averaged 14%. <br />
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It's hard to say what all this means. Two years ago, when insiders shouldered heavy IPO loads -- taking on more risk instead of getting to precious exits -- it was easier to wonder about the desperation of it all. But now, more early stage biopharma investors (Third Rock Ventures, Flagship Ventures, OrbiMed Advisors, 5am Ventures and so on) are squaring the circle, from fundraising to new investment to IPO and back again, and biotech's boom means those extra IPO shares, if you can afford them, could be a lucrative proposition. And as our <i>START-UP</i> colleagues noted last year, biotech VCs haven't been shy about holding... and holding... and <span id="goog_822551792"></span><a href="https://www.blogger.com/">holding their shares well past IPO<span id="goog_822551793"></span></a>. <br />
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Is it worth mentioning that you also can't spell "ripoff" without IPO? Or perhaps we should leave you with this lighter linguistic play: The only anagram of IPO is "poi." A select few find the ancient Hawaiian staple of taro root mush delicious, but other people just need some time to appreciate it. Hmm, sounds like a recipe for what we cook up every two weeks, except we call it...<br />
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<a href="http://3.bp.blogspot.com/-HKthAlXNs1A/UvSWAwjTETI/AAAAAAAAA3Y/VLoSMMYAIZo/s1600/fotf.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-HKthAlXNs1A/UvSWAwjTETI/AAAAAAAAA3Y/VLoSMMYAIZo/s1600/fotf.jpg" height="36" width="320" /></a></div>
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<b>Dicerna Pharmaceuticals</b>: RNA interference specialist Dicerna more than tripled in its first day of trading, making it the largest post-IPO pop since 2000. Demand for the offering was almost unprecedented with over $1 billion in orders, thanks in part to the RNAi-validating $700 million deal between Alnylam Pharmaceuticals and Sanofi's Genzyme that <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/76/3/How-And-Why-Genzyme-And-Alnylam-Expanded-Their-Alliance">stole the show</a> at January’s JP Morgan Healthcare conference. But unlike <a href="http://www.elsevierbi.com/Publications/Start-Up/19/1/Clinical-Data-In-2014-Could-Trigger-Private-Biotech-Financings">many IPO candidates going into 2014</a>, Dicerna can't count on near-term milestones to support the stock. It expects to start clinical trials for the treatment of primary hyperoxaluria in 2015, with proof-of-concept data due later that year. It also expects to advance DCR-M1711 for cancers driven by the MYC oncogene in the first half of 2014, with proof-of-concept data in 2015. The biotech originally targeted $60 million, but by increasing its price to $15 and shares sold to six million, it ended up raising $90 million. The overallotment could add another $13.5 million. Last July, Dicerna raised a $60 million Series C round at $7 a share with crossover investors RA Capital, Deerfield Management and Brookside Capital Partners, as well as VCs Domain Associates, Skyline Venture Partners, Abingworth Bioventure, SROne and Oxford Biosciences Partners. At market close on February 6, Dicerna’s share price had settled to $33.98, down from its first-day high of $46, but still more than double the IPO offer price. – <i>Stacy Lawrence</i><br />
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<b>uniQure</b>: The groundbreaking Dutch company gained the first regulatory approval for a gene therapy in the Western world, but it isn’t the first to go public. The company followed bluebird bio and, just by a few days, Celladon into the public markets with its February 4 listing on the Nasdaq, pricing 5.4 million shares at $17 apiece, above the anticipated range of $13 to $15. uniQure netted $81.9 million in the transaction, net of discounts and expenses; a greenshoe option could add $13.8 million more to the offering’s value. uniQure made history in November 2012, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2012/11/2/UniQures-Glybera-Is-First-Gene-Therapy-Okayed-In-Western-Europe">when EMA approved its <i>Glybera</i></a> (alipogene tiparvovec) to treat rare metabolic disease lipoprotein lipase deficiency. It’s part of a renaissance of interest in the field of gene therapy, once considered overly risky, and VCs have <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/29/VC-Enthusiasm-For-Gene-Therapy-Is-Going-Viral">stepped up investment</a> in new treatments in the field. After meeting with US regulators, uniQure plans to file an IND for Glybera by midyear. The company will also use its IPO proceeds to complete its Lexington, Mass. manufacturing facility and advance pipeline candidates including Phase I/II hemophilia treatment AMT-060. The company is <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/7/10/uniQure-Grants-Chiesi-Select-Commercial-Rights-For-The-EUs-First-Approved-Gene-Therapy-Glybera-And">planning a 2014 commercial launch</a> of Glybera in Europe, in conjunction with regional partner Chiesi Farmaceutici. – <i>Paul Bonanos</i><br />
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<b>Lumos Pharma</b>: Two years after paying $695 for a crowdsourced logo, Lumos has reeled in real cash: a <a href="http://finance.yahoo.com/news/lumos-pharma-announces-series-financing-152100216.html">$14 million Series A round</a> led by Sante Ventures and New Enterprise Associates. The Austin, Texas firm is working on a small molecule therapeutic for the rare disease Creatine Transporter Deficiency (CTD), which is in preclinical studies. Lumos was among the first companies to gain support from the National Institutes of Health's "TRND" program, or Treatments for Rare and Neglected Diseases. As our sister publication <i>START-UP</i> <a href="http://www.elsevierbi.com/Publications/Start-Up/16/11/Therapeutics-For-Rare-And-Neglected-Diseases">noted in late 2011</a>, CEO Rick Hawkins, a serial biotech entrepreneur, turned to TRND for help in what he called the worst disruption in the capital markets he'd seen in 35 years. CTD is an inborn error of metabolism that results in a profound lack of creatine in the brain. It's an x-linked disorder, which means boys are more affected than girls, with severe autism-spectrum symptoms such as language and speech delay, epilepsy and destructive behavior. Lumos is repurposing a drug -- what it calls a kinetically similar analog of creatine -- previously studied as a solid tumor treatment, and tested in knockout mice at the University of Cincinnati. Kevin Lalande, Managing Director of Sante Ventures, and NEA Partner Ed Mathers will join the Lumos board. – <i>Alex Lash</i><br />
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<b>NightstaRx</b>: We admit we first thought about writing up NightstaRx to poke gentle fun at its name. (It apparently is pronounced "Nightstar," which makes for the first silent "X" in the English language.) But we would never be that shallow; the firm merits a write-up for other, more legitimate reasons. First, the company is the initial therapeutic investment from Syncona Partners, the new £200 million ($325 million) evergreen venture fund of the mighty Wellcome Trust, which has been rather slow to get cranking (it was first announced nearly two years ago). <a href="http://www.elsevierbi.com/Publications/Start-Up/17/4/Project-Sigma-Wellcome-Funding-For-Scientific-Research">Once known as Project Sigma</a>, Syncona aims to fund private biotechs and keep full ownership, at least for a while. It's for-profit and although fully funded by Wellcome, it's separate from the Trust's investment division, which has billions of pounds of private equity holdings. Now that Syncona is truly up and running, it should b be a significant source of early stage funding for European biotechs. Our second reason to highlight NightstaRx, a spinout from the University of Oxford, is that <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/29/Wellcome-Trusts-Syncona-Bets-On-Gene-Therapy-in-Eye-Disease">Syncona's £12 million</a> ($20 million) will help move forward a gene therapy treatment for choroideremia, an inherited form of progressive blindness. It's the latest entry in a venture-backed field of ocular gene therapy companies, as The treatment uses a small modified virus, AAV.REP1, to deliver the correct version of the mutated gene that causes to cells in the retina of the eye. Six months after treatment with this therapy, the first six patients showed improvement in their vision in dim light and two of the six were able to read more lines on the eye chart, according to a January 16 paper in the British medical journal Lancet. The vector is currently in Phase I trials and follow-on tests are expected to begin in 2016. – <i>Sten Stovall and Alex Lash</i><br />
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<b>Best of the Rest (Highlights of Other Activity This Fortnight): </b>Cancer MAb company <b>Igenica</b> announced a second closing of $14 million to its <a href="http://www.elsevierbi.com/deals/201230288" target="_blank">June 2012 Series C round</a>, raising the total proceeds to $47 million…In another add-on, <b>Sialix</b>, which is focused on sialic acids to treat cancer and inflammatory-mediated diseases, tapped angel investors to supplement its August 2011 Series B financing with <a href="http://finance.yahoo.com/news/sialix-closes-oversubscribed-second-tranche-141500826.html" target="_blank">a $1.2 million tranche</a>, bringing the round total to $4 million…Through a public offering, renal drug developer <b>Keryx Biopharmaceuticals</b> <a href="http://www.elsevierbi.com/deals/201430045" target="_blank">netted $108.2 million</a> (including the overallotment)… Large FOPOs were also completed by other cancer-focused biotechs: <b>Geron</b> (<a href="http://www.elsevierbi.com/deals/201430046" target="_blank">$97.3 million</a>) and <b>Tesaro</b> (<a href="http://www.elsevierbi.com/deals/201430040" target="_blank">$94.8 million</a>)… While numerous initial public offerings were completed, there are still an abundance of filers in the wings, hoping to go public soon; among them is UK biotech <b>Circassia</b>, intending to <a href="http://www.ft.com/cms/s/0/959d9ffe-8e88-11e3-98c6-00144feab7de.html#axzz2sZduotTW" target="_blank">float on the London Stock Exchange's Main Market</a>, which, if successful, would be the first UK-market IPO since <b>Clinigen Group</b>’s <a href="http://www.elsevierbi.com/deals/201230632" target="_blank">£6.6 million flotation</a> on AIM in October 2012 (UK biotech <b>Egalet</b> just <a href="http://www.elsevierbi.com/deals/201330604" target="_blank">completed its $50 million IPO</a>, but on Nasdaq)… Canadian spec pharma <b>Aptalis Holdings</b> <a href="http://www.sec.gov/Archives/edgar/data/1588172/000119312513484126/d617354ds1.htm" target="_blank">withdrew its December 2013 IPO filing on Nasdaq</a> in favor of a <a href="http://www.elsevierbi.com/deals/201410003" target="_blank">$2.9 billion buy-out</a> by <b>Forest Laboratories</b>… Through the sale of debt, <b>Emergent BioSolutions</b> <a href="http://www.elsevierbi.com/deals/201430025" target="_blank">raised $250 million</a> to fund its <a href="http://www.elsevierbi.com/deals/201310172" target="_blank">acquisition of <b>Cangene</b></a>… Also through a debt offering, <b>Fluidigm</b> <a href="http://www.elsevierbi.com/deals/201430039" target="_blank">brought in $170 million</a> to finance its <a href="http://www.elsevierbi.com/deals/201410009" target="_blank">takeover of <b>DVS Sciences</b></a>. – <i>Maureen Riordan</i><br />
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<i>Many thanqkxs to <a href="http://www.flickr.com/photos/exalthim/">Mr. Thomas</a> for the Scrabble photo via a Creative Commons license.</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Anonymoushttp://www.blogger.com/profile/11736570307907834292noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-12312746308113455962014-01-31T17:37:00.001-05:002014-01-31T17:37:56.008-05:00Deals Of The Week Looks at The Intersection Of Patient Empowerment, Generic Drugs, And Macaroni & Cheese<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-j2UsDX1R0aY/UuwhdNssfHI/AAAAAAAADd8/2oxfDN2TTLg/s1600/bad-walmarts-great-value-macaroni-and-cheese.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-j2UsDX1R0aY/UuwhdNssfHI/AAAAAAAADd8/2oxfDN2TTLg/s1600/bad-walmarts-great-value-macaroni-and-cheese.jpg" height="240" width="320" /></a></div>
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It’s a challenge to pick up an annual report or listen to a CEO present at a conference these days without reading or hearing something about “patients being at the center of everything we do.” But patient empowerment is a slippery concept. It means different things to different stakeholders.<br />
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To health insurers and policy mavens, it’s about providing consumers with information about health care delivery and payment options. To disease advocates, it’s about sparing no effort to make clinically meaningful, affordable therapies available to patients. To some investors, it’s about <a href="http://www.elsevierbi.com/Publications/IN-VIVO/31/2/People-Power-How-The-Crowd-May-Shape-The-Funding-And-Development-Of-Drugs?result=1&total=1&searchquery=%253fq%253d2013800035">giving consumers a stake in the funding of medicines</a>.<br />
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To drug companies, patient empowerment is all too often about educating consumers – via print and broadcast, online media and through the physicians they detail – about their proprietary drug and shielding them from information about competing drugs.<br />
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To explore the issue, “The Pink Sheet” recently talked with Harvard Medical School Professor Eric Campbell, a sociologist who heads the Mongan Institute for Health Policy at Massachusetts General Hospital. Among his research projects, Campbell and institute colleagues published an article in the Feb. 11, 2013 issue of JAMA Internal Medicine reporting on a survey that sheds an interesting light on patient empowerment.<br />
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The basic takeaway was that 37% of physicians surveyed (n=1,891) sometimes or often prescribed a brand-name drug at a patient’s request when a generic is available. Campbell commented, “[That] is a wasteful medical practice, and part of the reason that health care is so expensive.”<br />
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The survey turned up some interesting determinants of the surprisingly high cave-in rate. Forty-three percent of physicians in practice for more than 30 years acquiesced to patient demands for the brand drug, compared to 31% of physicians in practice 10 years or fewer. Fifty percent of internal medicine docs caved compared to specialties like pediatrics (17%), anesthesiology (20%), and general surgery (26%). And physicians in solo or two-person practices were significantly more disposed to cave to patient demands than those working in a hospital (46% versus 35%).<br />
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Not surprisingly, physician-industry relationships were positively associated with accommodating patient requests for brand-name drugs. In particular, physicians who received industry-provided food and/or beverages in their workplace or who got free drug samples were more likely to accede to patient demands. But the biggest predictor of the propensity to cave in was the frequency with which docs met with drug reps to stay up to date.<br />
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The survey leaves unanswered other questions, both about the physician-patient relationship and about how patients and physicians, as distinct groups, view generics versus branded drugs. For instance, wouldn’t drug companies and health care policy makers like to know whether patients, emboldened by information gleaned from social media and the Web, are requesting FDA-approved drugs with alternative mechanisms in place of the physician’s recommendation?<br />
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And wouldn’t all health care system stakeholders appreciate some hard data on patient views about generics? Do a majority see them as inferior to the brand? As less safe? Less prestigious? How well informed are patients about the concept of bioequivalence or about the clinical dossier required for approval of a generic drug? And the same goes for physicians – what are their views about generics?<br />
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Docs working in large, increasingly corporatized settings like hospitals or large physician groups seem to toe the line more when it comes to prescribing generics. As accountable care organizations gather steam, physicians will be economically incentivized to prescribe generics.<br />
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And other trends are at work that will nudge over-obliging physicians toward generics and away from brands. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/12/20/CVS-Caremark-Formulary-Exclusion-Program-Expected-To-Save-1-Bil-In-2014?result=1&total=1&searchquery=%253fq%253d14131220002">Formulary exclusion programs</a>, such as have been instituted at pharmacy benefit managers like CVS Caremark Corp. and Express Scripts Inc., are targeting branded drugs in categories where there are generic alternatives. Caremark’s program, in its second year, has designated 70 drugs in its 2014 formulary as “not covered.” Express Scripts’ exclusion list, which began on Jan. 1 of this year, targets 48 drugs, including mega-brands like GlaxoSmithKline PLC’s <i>Advair Diskus </i>(fluticasone/salmeterol) and excludes more specialty products than Caremark.<br />
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The Sunshine Act, which went into effect in August 2013, prohibits drug industry value transfers to physicians. While it’s too early to say whether it’s casting an overall chill on industry interactions with physicians, some regional health systems like ThedaCare in Wisconsin are using the new law to ban drug rep visits and product samples even though neither are proscribed under the law. The trend over the past decade has been for larger academic centers to prohibit reps from leaving samples or, in some cases, from in-clinic visits altogether.<br />
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Meanwhile, the influx of generics in the wake of major brands going off-patent <a href="http://www.elsevierbi.com/Publications/Health-News-Daily/2014/1/8/Generics-Were-Major-Health-CostControl-Factor-In-2012-CMS-Study-Says?result=1&total=1&searchquery=%253fq%253d29140108001">helped tamp down drug expenditures in 2012</a> from all sources of drug spending – public plans, private plans and out-of-pocket payments. The implementation of four-tier formularies, for instance among employer-sponsored plans, has helped constrain patient and physician use of brand-name drugs.<br />
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Campbell offered an insight into the poorly understood world of patient psychology as it pertains to evaluating and selecting a therapeutic option:<br />
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“I think people see generics and think of it like macaroni and cheese. If you buy generic macaroni and cheese at the grocery store, you know in advance that it won’t taste as good as the brand-name Kraft Macaroni & Cheese. You can see why some people might be reluctant to use generic drugs.” But then he hastens to point out a crucial difference: “In the drug world, they’ve actually proven that the generic macaroni and cheese is completely identical to the Kraft Macaroni & Cheese.”<i> -- Mike Goodman</i><br />
<br />
Meanwhile, here's a sampling of this week's choicest transactions, served piping hot: <br />
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<b>Biogen Idec/UCB</b><br />
<br />
Biogen Idec Inc. will be taking its multiple sclerosis portfolio into several Asian markets, along with its candidates for hemophilia A and B, under <a href="http://www.ucb.presscentre.com/News/UCB-and-Biogen-Idec-Enter-Agreement-To-Commercialize-Multiple-Sclerosis-and-Hemophilia-Therapies-in-47e.aspx">a commercialization pact signed with Belgium’s UCB</a> SA on Jan. 30. Financial terms of the deal were not disclosed.<br />
<br />
Under the agreement, UCB obtains the rights to commercialize six MS drugs in South Korea, Hong Kong, Malaysia, Thailand, Singapore and Taiwan, as well as <i>Eloctate </i>and <i>Alprolix</i>, Biogen’s investigational long-acting recombinant therapies for hemophilia A and B. In MS, the deal confers rights to fast-growing <i>Tecfidera </i>(dimethyl fumarate), blockbuster biologic therapies <i>Avonex</i> (interferon beta-1a) and <i>Tysabri </i>(natalizumab), <i>Ampyra </i>(dalfampridine), <i>Plegridy </i>(pegylated interferon-1a) and daclizumab. UCB also gets development and commercialization rights to all eight drugs in China.<br />
<br />
<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/29/Biogen-Sets-Aside-Cash-For-Business-Development-Expects-New-Launches-In-2014?result=1&total=1032&searchquery=%253fq%253dbiogen%2526hlsu%253dBoth">During its year-end investor call</a> Jan. 29, Biogen reported that Tecfidera had produced sales of $876 million worldwide in 2013; all but $12 million of that was realized in the U.S. The Weston, Mass.-based biotech expects Plegridy to obtain marketing approval this year in the U.S. and Europe, and Eloctate and Alprolix to obtain approval in the U.S., although it does not project meaningful revenues this year from the hemophilia drugs. <i>--Joe Haas</i><br />
<br />
<b>Baxter/Xenetic Biosciences</b><br />
<br />
Baxter International Inc. and the U.K.’s Xenetic Biosciences Inc. announced they were <a href="http://ir.xeneticbio.com/releasedetail.cfm?ReleaseID=822062">restructuring their 2005 collaboration</a> to co-develop hemophilia drugs that could be administered less frequently than current therapies, perhaps once weekly. The expanded deal, announced Jan. 30, includes a $10 million equity investment by Baxter in its partner and also amends the terms of a licensing agreement, increasing the potential milestones payable to Xenetic to $100 million. The amended deal would increase sales royalties on any products reaching market, as well.<br />
<br />
Xenetic CEO Scott Maguire said the company plans to use the money to advance its own pipeline assets, which include <i>ErepoXen</i>, a polysialylated formulation of erythropoietin for the treatment of anemia in pre-dialysis patients with chronic kidney disease, and <i>OncoHist</i>, a recombinant human histone H1.3 compound in development for refractory acute myeloid leukemia. The partnership with Baxter centers on using the biotech’s PolyXen technology platform to develop polysialylated blood-coagulation factors, including a reformulation of Factor VIII.<br />
<br />
Baxter’s website notes the company has completed Phase I clinical trials of BAX 855, a longer-acting recombinant factor VIII protein for the treatment of hemophilia A based on the full-length <i>ADVATE</i> [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] molecule. ADVATE is approved in more than 50 countries for hemophilia A, most recently China.<i> --JH</i><br />
<br />
<b>AstraZeneca/FOB Synthesis</b><br />
<br />
AstraZeneca PLC is delving further into antibiotic research through <a href="http://www.fobsynthesis.com/astrazeneca.htm">an option licensing deal</a> with drug discovery company FOB Synthesis Inc. The deal, announced Jan. 27, will provide AstraZeneca with access to two of FOB Synthesis’ preclinical carbapenem antibiotic programs, FSI-1671 and FSI-1686, to potentially be combined with a preclinical beta lactamase inhibitor from AstraZeneca’s pipeline. AstraZeneca will develop the compounds through Phase I and then have an option to acquire them outright. The terms of the deal were not disclosed. <br />
<br />
Carbapenem antibiotics are a backbone treatment for Gram-negative bacterial infections, but have grown less effective against drug resistant bacteria. FOB’s novel carbapenem products have demonstrated strong activity against Gram-negative infections in preclinical models. Combining an antibiotic like carbapenem with a beta lactamase inhibitor has been shown to help break down bacteria’s resistance to the drugs. <br />
<br />
<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/74/39/MedImmune-Deploys-Targeted-Antibodies-In-Battle-Against-Superbugs?result=1&total=1&searchquery=%253fq%253d00120917002">The field is one AstraZeneca knows well</a>. The company already has a novel beta lactamase inhibitor avibactam in Phase III development in combination with the antibiotic ceftazidime in collaboration with Forest Laboratories Inc. The two are studying the drug in five Phase III studies for Gram-negative infections. <br />
<br />
While the market for antibiotics that address Gram-positive infections has seen several new entries in recent years and there are several more antibiotics in late-stage development, the market for antibiotics that address Gram-negative infections has been slower to develop while the need for new treatments has grown dire. At least one analyst, ISI Group’s Umer Raffat, puts the market opportunity for antibiotics that treat resistant Gram-negative infections at $2.5 billion.<i>--Jess Merrill</i><br />
<br />
<b>Galectin/SBH</b><br />
<br />
Galectin Therapeutics Inc. enjoyed a bump in its stock price during January, thanks in part to fellow fibrosis treatment developer <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/10/Intercept-Stock-Price-Skyrockets-On-Continuing-Stream-Of-Good-Data-For-OCA-Candidates?result=1&total=1&searchquery=%253fq%253d14140110004">Intercept Pharmaceuticals Inc.’s clinical success</a>. On Jan. 27, Galectin teamed with cell-based assay developer SBH Sciences to form a joint venture that will investigate oral small-molecule galectin-3 inhibitors.<br />
<br />
<a href="http://investor.galectintherapeutics.com/releasedetail.cfm?ReleaseID=821203">The two companies will share ownership</a> of newly created, Georgia-based Galectin Sciences LLC. The company will develop a series of compounds SBH recently discovered that show potential in inhibiting galectin-3, one of several galectin proteins implicated in inflammatory diseases, organ scarring disorders and cancers. The collaborative venture will also attempt to discover new compounds using both companies’ expertise. Norcross, Ga.-based Galectin Therapeutics has two clinical compounds currently under development, but both are intravenous rather than oral.<br />
<br />
Natick, Mass.-based SBH has provided contract research services to Galectin Therapeutics for more than a decade. Founded in 1997 to develop mammalian-derived recombinant cytokines, SBH now performs in vitro drug development and is a vendor of cytokine-measuring bioassays. Galectin Therapeutics was established in 2000, and was known as Pro-Pharmaceuticals Inc. until 2011. <i>--Paul Bonanos</i><br />
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<b>Actavis/Zhejiang Chiral Medicine Chemicals</b><br />
<br />
<a href="http://www.elsevierbi.com/Publications/Pharmasia-News/2014/1/27/Actavis-Follows-Up-On-PullOut-Threat-Sells-China-Unit-To-Zhejiang-Chiral?result=1&total=1&searchquery=%253fq%253d28140128003">Actavis PLC inked a deal with Zhejiang Chiral Medicine Chemicals</a> Co., Ltd to divest its joint venture in China, Actavis Foshan China, the company announced Jan. 24. Terms of the deal were not disclosed. Weeks earlier Actavis CEO Paul Bisaro had said China was an "unfriendly environment" for biopharmaceuticals and that he would pull out of the country. <br />
<br />
During the company’s Jan. 31 analyst day in New York, the company said it would continue operations in China with business partners, but it would focus on other emerging markets such as Russia, Brazil, Turkey and Southeast Asia. Global Operations President Bob Stewart told analysts that as the company focused more on supply chain rather than manufacturing, it took out a number of assets through sales and divestitures, and it would continue to do so. Along those lines, Actavis sold a facility in India, a JV in Russia, exited out of two facilities in China and divested operations in China. <br />
<br />
“We will always make modifications based on portfolios,” Stewart said, adding, “the map continually evolves.” <br />
<br />
"Actavis is focused on strengthening our investment in high-growth markets where our size and scale allow us to maintain a competitive presence with the leading companies in the market," said Actavis Pharma President Sigurdur Oli Olafsson. "Our operations in Foshan were limited in scope and we believe that their value will be better capitalized on by Chiral, which will add manufacturing and marketing capabilities allowing them to expand their portfolio and strengthen their position in the Chinese market.”<br />
<br />
CEO Paul Bisaro told analysts that the company has roughly $2 billion in cash and will look for strategic M&A that will focus on geographic expansion. <i>--Tamra Sami</i><br />
<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Michael Goodmanhttp://www.blogger.com/profile/00419534284521921017noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-4097210071460988162014-01-24T13:04:00.000-05:002014-01-24T15:15:13.925-05:00Deals Of The Week: New Academia/Industry Partnership Template In Eisai/JHU Collaboration?As founder and president of a <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/42/Deals-Of-The-Week-Academic-DrugDiscovery-Groups-Work-Catching-Industrys-Notice?result=1&total=1&searchquery=%253fq%253d00131021006">coalition working to enhance academic drug-discovery </a>and collaborations between academia and industry, Barbara Slusher has a good idea of the advantages and pitfalls of such arrangements. She points to ongoing work between Japan’s Eisai and Johns Hopkins University, where she serves as director of neurotranslational drug discovery at the medical school’s Brain Science Institute, as a potentially more mutually rewarding template for academic/industry tie-ups.<br />
<br />
In October 2011, Eisai signed a <a href="http://www.elsevierbi.com/deals/201120450?result=1&total=1&searchquery=%253fq%253d201120450">five-year drug-discovery alliance</a> with JHU, initially slated to focus on central nervous system targets. Slusher, who heads up the <a href="http://addconsortium.org/">Academic Drug Discovery Consortium</a> (ADDC) in addition to her responsibilities at JHU, said the partners are about 18 months into a partnership currently focused on two targets, one undisclosed. The other is aimed at identifying drug-like molecules that inhibit xCT, a glutamate cysteine exchanger that Eisai believes could offer potential in combating inflammatory disease.<br />
<br />
<br />
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/--zSXRygwDMA/UuKlF82ovsI/AAAAAAAAAOM/3bLYJpuKNPw/s1600/Barbara+Slusher-+2014.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/--zSXRygwDMA/UuKlF82ovsI/AAAAAAAAAOM/3bLYJpuKNPw/s1600/Barbara+Slusher-+2014.jpg" height="320" width="237" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Barbara Slusher, JHU Brain Science Institute <br />
and Academic Drug Discovery Consortium</td></tr>
</tbody></table>
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Under this alliance, written to last the greater of five years or to the completion or termination of all related projects, the Brain Science Institute reviews target research throughout JHU’s roster of researchers and presents potentially novel and interesting targets for Eisai’s review. Eisai then selects the targets of greatest interest for the high-throughput screening collaboration.<br />
<br />
The compound libraries generally available to academic researchers are not as large, diverse or drug-like as those found within a biopharmaceutical company’s library, developed through years of wide-ranging R&D work, Slusher said. Slusher came to JHU in 2010 after working in drug discovery at five biopharma companies, including Eisai, and set a goal of establishing collaborations offering greater potential for academic discovery work.<br />
<br />
“One of the things that my team did when we first came to Hopkins was try to establish a relationship with a pharma company such that if any targets we identified were of interest to the company, we would develop a high-throughput screening assay, share that with the company, and they would screen using our assay and compound library,” she said.<br />
<br />
“At the point that they find hits, they then transfer those back to my team here and we do all the drug discovery and chemistry to identify a compound to get to the clinic,” Slusher added. “At that point, Eisai has first rights to license that compound.”<br />
<br />
“The exciting thing about this collaboration is that it is truly a win/win,” she continued. “From my perspective, academia is excellent at identifying new targets of therapeutic interest, but our screening ability is limited due to the size and quality of the compound libraries available. Our collaboration with Eisai gives us access to a real pharma library. From the Eisai side, the collaboration provides access to new targets and novel therapeutic approaches.”<br />
<br />
Lynn Kramer, Eisai’s chief clinical officer and president of its Neuroscience and General Medicine Product Creation Unit (PCU), concurs, saying the JHU tie-up and <a href="http://www.elsevierbi.com/deals/201220584?result=1&total=1&searchquery=%253fq%253d201220584">a similar partnership </a>with University College London, offer Eisai “a novel target identification program that incorporates early drug development.”<br />
<br />
“For us, it expands the novelty of our programs and it’s designed to utilize the best skills from each of the two partners to facilitate drug development and pass the compounds back and forth between our strengths and their strengths,” he said. The Brain Science Institute is a little unique from an academic perspective in that it has a number of people who have a lot of drug-development experience in pharmacokinetics, medicinal chemistry, toxicology and animal models,” skills that increasingly are available in top academic medical centers as they try to move up the research value chain. <br />
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<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-V3BSDzED7zY/UuKlcVfO9JI/AAAAAAAAAOU/tncbpVSQzOM/s1600/Lynn+Kramer.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/-V3BSDzED7zY/UuKlcVfO9JI/AAAAAAAAAOU/tncbpVSQzOM/s1600/Lynn+Kramer.jpg" height="400" width="285" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Lynn Kramer, Eisai</td></tr>
</tbody></table>
<br />
Slusher’s team sorts through the most-promising research from a consolidated team of about 550 researchers to find target prospects for Eisai. His company therefore has access to the most concentrated group of neuroscience researchers outside of Boston, but with a single point of contact and first rights to option programs, Kramer said. JHU advances the programs selected by Eisai as far as the IND-ready stage, with pre-arranged terms for licensing fees, milestones and royalties on those assets it takes in-house.<br />
<br />
“Eisai has the ability at multiple stages to come in and acquire the project,” Slusher said. “Depending upon when they in-license, the value derived by the university varies. If Eisai in-licenses the drugs early in the process, Johns Hopkins derives less value than if they in-license late in the process. It’s correlative to the amount of effort we’ve put in.”<br />
<br />
About 18 months into the collaboration, JHU has developed assays for the two targets, Eisai has conducted high-throughput screening and is now sending first hits back the university for the next stages of work. “We probably have a year or two of chemistry and drug discovery to do before leads will be identified as options for the company,” Slusher noted. “This whole process probably likely will take three to five years.”<br />
<br />
Kramer would not specify Eisai’s internal goals for producing a first clinical candidate from the partnership, other than to say “our goal is in the not-too-distant future – by that I don’t mean in a year. This takes a while.”<br />
<br />
In general, Kramer thinks further collaboration with academia will be beneficial for his company. ADDC, founded in 2012, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/10/15/Academic-DrugDiscovery-Units-Team-Up-To-Share-Knowledge-Facilitate-Partnering?result=1&total=1&searchquery=%253fq%253d14131014003">intends to serve as a clearinghouse</a> for both academia and industry on research taking place within U.S. and international drug research programs. It doesn’t do tech-transfer work itself, but aims to make it easier for academics and biopharmaceutical companies to work together.<br />
<br />
“You see from our two associations that they’re very flexible,” Kramer said. “We have gotten away from a lot of the intellectual property issues that used to plague the industry, because we’re really interested in molecule IP, not target IP, which used to lead to years of back and forth and impaired academic development. By getting over that hurdle, I view the academic groups as our ‘bread-and-butter’ for novel targets. It’s very hard in the industry to develop a novel, previously unidentified target – it’s too expensive and takes too long.”<br />
<br />
It wasn’t just the academic world that biopharma companies were dealing with this past week, though. Read on for …<br />
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<b>Teva/NuPathe:</b> Teva expects to launch the migraine patch <i>Zecuity </i>(sumatriptan iontrophoretic transdermal system) in the first half of 2014 after acquiring the developer, NuPathe. The two <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/21/Teva-Wins-Bidding-For-NuPathe-And-Its-Migraine-Patch-Topping-Endo?result=1&total=1&searchquery=%253fq%253d14140121002">announced the acquisition plans Jan. 21</a>, with Teva’s $3.65 per share offer, approximately $144 million upfront, trumping rival bidder Endo’s proposal of $3.15 per share. Teva, which needs near-term revenue generators, gains a new product to add to its specialty central nervous system portfolio. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/4/AllerganMAP-Planned-Merger-Approval-Of-NuPathes-Triptan-Patch-Change-US-Landscape-For-Migraine?result=1&total=1&searchquery=%253fq%253d00130128018">FDA already approved the drug </a>in January 2013, but NuPathe held out on commercializing it in order to find a partner. The drug is the only patch approved for migraine. The Israeli pharma’s offer represents a significant 58% premium over the $2.30 NuPathe shares closed at on Dec. 13, the last business day before Endo announced its intentions to buy the company. But it doesn’t offer much financial reward for longer-term investors. NuPathe’s stock opened at $3.80 about a year ago, on Jan. 18, the day after Zecuity was approved by FDA. NuPathe investors could receive additional payments, however, of up to $3.15 per share based on the future sales performance of Zecuity. Investors will receive $2.15 per share if net sales of the product are at least $100 million in any four consecutive calendar quarters on or prior to the ninth anniversary launch date. Another $1.00 per share in cash is payable if sales are at least $300 million in any four calendar quarters over the same time period. - <i>Jessica Merrill</i><br />
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<b>Par Pharmaceuticals/JHP Pharmaceuticals:</b> Par Pharmaceutical is looking to expand the types of generic drugs it can offer beyond the solid, oral-dose pills it has been producing for years. The Woodcliff Lakes, N.J.-based company announced Jan. 21 that is has entered into an agreement to acquire privately held JHP Pharmaceuticals for $490 million in cash, a 2.5x return on investment for <a href="http://www.elsevierbi.com/deals/201210216?result=1&total=1&searchquery=%253fq%253d201210216">JHP’s main investor, private equity firm Warburg Pincus</a>. Par has arranged for $505 million in debt financing <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/23/Par-Enters-Generic-Injectable-Market-Via-JHP-Buy?result=1&total=1&searchquery=%253fq%253d14140123003">to cover the deal and related costs</a>. JHP and all of its assets, including a sterile manufacturing facility in Rochester, MI, will become a wholly owned subsidiary once the deal closes later this quarter. JHP was launched in 2007 when it acquired biologics contract manufacturing assets acquired from King Pharmaceuticals (now part of Pfizer) for $92 million. JHP performs contract manufacturing services worldwide for pharma and biotech customers, producing sterile injectables that require liquid, lyophilized and suspension formulations. The King deal also included branded hospital and acute-care drugs that JHP distributes. The main appeal of JHP to Par is the 14 specialty injectables that it already has on the market, as well as 30 additional candidates it has in its pipeline. Par is looking to expand into high-barrier-to-entry injectable generics as some of the major players in that space falter due to manufacturing problems. - <i>Lisa LaMotta</i><br />
<br />
<b>Biocon/Advaxis: </b>India’s Biocon and New Jersey biotech Advaxis <a href="http://www.elsevierbi.com/Publications/Pharmasia-News/2014/1/23/Indias-Biocon-Advaxis-In-Pact-To-Develop-Latestage-HPV-Immunotherapy?result=1&total=1&searchquery=%253fq%253d28140122014">announced an exclusive licensing pact Jan. 22</a> for co-development and commercialization of ADXS-HPV, a novel cancer immunotherapy for treatment of human papillomavirus (HPV)-associated cervical cancer in women. The deal covers India and key Asian emerging markets and gives Biocon access to Advaxis’ innovative and proprietary technology for the development of other novel therapeutics. Advaxis recently completed Phase II clinical trials in patients with recurrent cervical cancer in India, and the immunotherapy also is being evaluated in three clinical trials for HPV-associated cancer like recurrent advanced cervical cancer, head and neck cancer, and anal cancer. A spokesperson for Advaxis said the company will receive double-digit royalties on all sales of its immunotherapy product. The biotech will have exclusive rights to supply ADXS-HPV to Biocon, and Biocon will be required to purchase its requirements of ADXS-HPV exclusively from Advaxis at the specified contract price, which may be adjusted periodically. In addition, Advaxis will be entitled to a “six-figure” milestone payment if net sales of ADXS-HPV for the contract year following the initiation of clinical trials in India exceed certain specified thresholds. - <i>Vikas Dandekar</i><br />
<br />
<b>McKesson/Celesio:</b> In a “No Deal” that has turned into a deal, 10 days after saying its proposed acquisition of German drug wholesaler Celesio had fallen through, U.S. drug wholesaler McKesson has reached agreements that will allow it to complete the purchase after all. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/10/24/McKessonCelesio-Deal-Targets-Generics-Purchasing-Synergies?result=1&total=1&searchquery=%253fq%253d14131024001">McKesson launched its bid</a> to greatly expand its global reach through Celesio in October 2013. However, on Jan. 13 it <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/76/3/Deals-Of-The-Week-New-Remedies-Sought-From-Nature-And-Old-Technologies?result=1&total=1&searchquery=%253fq%253d00140120011">announced that the deal could not be completed </a>due to its failure to acquire 75% of outstanding Celesio shares through a tender offer. Then, in a Jan. 23 release, McKesson said it had reached an agreement with Franz Haniel & Cie. GmbH to acquire its entire holding of Celesio shares at €23.50 per share and another agreement with an affiliate of Elliott Management to acquire Celesio convertible bonds, which will be enough to give McKesson more than 75% ownership of Celesio on a fully diluted basis. The transactions are expected to close within 10 business days. McKesson plans to launch a voluntary tender offer to purchase shares from the remaining minority shareholders shortly after the close of the other transactions. The company said it will consolidate the financial results of Celesio during its fiscal fourth quarter ending March 31, and McKesson’s earnings will reflect its proportionate share of Celesio’s earnings. It expects to realize annual synergies of between $275 million to $325 million four years after the close of the deal. - <i>Scott Steinke</i><br />
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<br />
<b>Photo credits:</b> Johns Hopkins University, Eisai Co. Ltd.<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Joseph Haashttp://www.blogger.com/profile/08154849043009343039noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-30795017168766557492014-01-24T10:41:00.000-05:002014-01-24T10:41:01.724-05:00Financings Of The Fortnight Asks For The Envelope, Please...<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-UJSI0MGq7NA/UuIBaCPGPYI/AAAAAAAAA2s/Z1cLXWG7voI/s1600/awards2_gulltaggen.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://3.bp.blogspot.com/-UJSI0MGq7NA/UuIBaCPGPYI/AAAAAAAAA2s/Z1cLXWG7voI/s1600/awards2_gulltaggen.jpg" height="265" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">"And the Best Hair Restoration Product of 2013 goes to..."</td></tr>
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It's awards season, <a href="http://www.latimes.com/business/la-fi-awards-season-hotels-20140121,0,7268877.story#axzz2rIKrLOBB">as they say in Hollywood</a>, and this blog is no stranger <a href="http://invivoblog.blogspot.com/2014/01/and-roger-goes-to-our-deals-of-year.html">to polished hardware</a>. A bit later, we’ve got another red-carpeted treat for you: The 2013 A-List winners. But first, a story… <br />
<br />
Back when Financings of the Fortnight was a cub reporter on the high-tech beat, there was this new thing called a “Web browser” and a company called “Netscape.” The chief proponent of both was a young unassuming fellow named Marc Andreessen. He was, in the day’s currency, a bit of a rock star. Perhaps you’ve heard of him. <br />
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<a href="http://1.bp.blogspot.com/-45JkIs8oyV4/UuH-pT8ECNI/AAAAAAAAA2k/OTkgOsNZxG4/s1600/andreessen.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://1.bp.blogspot.com/-45JkIs8oyV4/UuH-pT8ECNI/AAAAAAAAA2k/OTkgOsNZxG4/s1600/andreessen.jpg" height="200" width="151" /></a>Your correspondent happened to be at a small gathering to hear a panel discussion with Andreessen and others, including Apple Computer’s “evangelist” Guy Kawasaki (yes, tech companies bestowed ridiculous titles upon executives 20 years ago, too, and yes, that is actually his real name). The wiry, California-tanned and caffeinated Kawasaki regaled the audience with his bird/elephant rule for innovation: one must consume information like a bird. Birds eat far more than their body weight, you see, and thus eat constantly. Then, at the other end, you take what you’ve learned and… how should we put this?... spread it around like an elephant. Andreessen, the big-boned, corn-fed Midwesterner, the phenotypic opposite of Kawasaki, followed. He picked up the mic and said, “Hi, I’m Marc. I try my best to eat like a bird, but usually I just shit like an elephant.”<br />
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We reconstruct this true tale to illustrate the trickle-down theory, to underline the importance of inputs and outputs, to draw attention to… oh, all right, we just like telling poop jokes.<br />
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But we admit trickle-down is fresh on our minds these days, what with the 2013 US venture data fresh in our inbox. Specifically: did the boffo IPO year for biotechs have any effect at the other end of the, uh, elephant? Have VCs begun spreading it around?<br />
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According to DJX Venture Source, health care venture investments in 2013 were up from 2012 ($8.2 billion vs. $7.8 billion) but fell well short of 2010 ($8.8 billion). Looking specifically at the biopharma and device sectors, which make up the bulk of healthcare investment, the 2013 numbers are down a tick from 2012 ($6.6 billion vs. $6.7 billion). No IPO effect there.<br />
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But much of the IPO activity in 2013 took place from spring through late summer. Perhaps the typical fourth quarter surge of investments was stronger than normal? Not in devices: 4Q was actually below the 1Q and 2Q totals. And in biopharma, the $1.3 billion for 4Q was the best quarter of the year, but a lower total than the 4Q totals of 2011 and 2012. Keep in mind that one-tenth of that quarterly total went to one company, Juno Therapeutics.<br />
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The rival MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association slices numbers in slightly different ways, but presents essentially the same trajectory. It also reports that first-time life science financings (biotech and device) were at near-record lows for the year: 154 deals total, just squeaking past 2012’s nadir of 148 deals.<br />
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So there hasn’t been much evidence of trickle-down, to which you might ask: Why should there be? Returns to old funds don’t simply translate into investments from new ones. LPs got to get paid. <br />
And what if the IPO window slides shut, just as a new batch of hopefuls line up? It’s certainly not clear what kind of reception they’ll receive. Public investors fret that among a fresh flood of offerings, the quality will erode. “Biotech tends to fade when there is an over-supply of equity. More and more lower-quality IPOs continue to be thrust on generalists who don’t understand them,” says Andy Smith of biopharma specialist Mann Bioinvest. “To give management and VCs lots of money, that will continue. Do I want to divest another holding to buy into a new company? We are scraping the bottom of the barrel in terms of quality.”<br />
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That’s not what Cara Therapeutics, Dicerna Pharmaceuticals, Auspex Pharmaceuticals, Argos Therapeutics and others currently on their roadshows want to hear. But we think the bellwether for the next few months will be rare disease firm Ultragenyx Pharmaceutical. It’s got big clinical milestones coming up this year, and it’s the only one with a bulge bracket bank amongst its underwriters. (Not one, but two: J.P. Morgan and Morgan Stanley.) That’s a signal the big banks see money to be made, not just on the IPO itself but by establishing a relationship with a biotech that will subsequently be able to successfully raise funds on a large scale. (For more on Ultragenyx, see our roundup below.)<br />
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If IPOs continue apace, however, we see the VC trends shifting this year. There will be more liquidity, plus the momentum of new funds raised in 2013: OrbiMed Advisors, Third Rock Ventures, 5am Ventures, Atlas Venture, Frazier Healthcare, and others. They’ve got money to spend. In fact, among the unimpressive venture data from 2013, there was at least one sweet spot that, since the recession, has continued to attract more deals and more dollars: Series A financings. <br />
In START-UP’s annual A-List, due out in a few days, we note that Series A deal flow increased for the fourth year in a row, as did the average dollars per round (in which figures were disclosed). Here’s a teaser: <br />
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We think the gradual increase, while overall venture numbers have remained unremarkable, is due to the growing emphasis on “long runway” A rounds, often funded by just one or two main groups. (Or in VC shorthand, A is the new A+B.) Plus, many early stage VCs have seed or equivalent programs for weeding out mediocre investments, but they’re not described or disclosed as seed round financings. So: fewer first-time financings, but more enthusiasm for the ones that make it to a true Series A. That’s our theory. What’s yours?<br />
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While we’re in tease mode, how about the A-List winners of 2013? In alphabetical order, we present: <br />
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<span style="font-family: inherit;"><span style="font-size: small;">Ajax Vascular</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Allergen Research</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Editas Medicine</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">electroCore</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">GeneCentric Diagnostics</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Juno Therapeutics</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Middle Peak Medical</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">PharmAkea Therapeutics</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Spark Therapeutics</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Syros Pharmaceuticals</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Vivex Biomedical</span></span></div>
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For explanations of our choices, and a deeper look under the hood of the overall Series A numbers, you’ll have to read Start-Up’s A-List feature, due out next week. (Ultragenyx, by the way, is an A-List alumnus: <a href="http://www.elsevierbi.com/Publications/Start-Up/17/1/The-AList-The-TrendShaping-Series-A-Financings-Of-2011">Class of 2011</a>.) <br />
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You can get a jump start, however, by continuing with us here, because Juno leads off our roundup this week, just on the other side of our little JPEG… But first, thanks to Stacy Lawrence for extra help with this edition. We also want to thank our families, our producers, Giorgio our makeup artist, our chauffeurs, our spa technicians, and last but not least...<br />
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<b> Juno Therapeutics</b>: Gobs of money. Stunning patient results. Legal disputes. It’s been a busy couple of months for the new cancer immunotherapy start-up. Most recently, the firm said January 13 it reeled in extra Series A cash to push the round past $145 million, with the booster shot coming from Bezos Expeditions, the personal investment company of Amazon.com chief Jeff Bezos, and Venrock. Juno debuted in December with a $120 million Series A round and exclusive license to three autologous cell therapy programs, two of which reported <a href="http://www.elsevierbi.com/publications/start-up/18/11/juno-launches-with-competing-immunotherapy-programs">very promising clinical data in 2013</a>. Its programs come from Memorial Sloan-Kettering Cancer Center, the Fred Hutchinson Cancer Research Center, and Seattle Children’s Research Institute. But it turns out Juno also took license to a slice of chimeric antigen receptor (CAR) technologies from St. Jude Children's Research Hospital, and it has jumped in on St. Jude’s side in a dispute with the University of Pennsylvania, whose CAR T-cell program is <a href="http://www.elsevierbi.com/publications/in-vivo/30/10/a-new-industryacademic-model-novartis-and-penn-make-a-splash-in-cancer-immunotherapy">licensed to Novartis</a>. According to court documents, Juno signed the license agreement with St. Jude the day it made its public launch, December 3, and agreed to shoulder 80% of the legal fees in the dispute with Penn. (For a much fuller description than we can afford here, read our Pink Sheet colleague Brenda Sandburg’s account <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/6/Juno-Therapeutics-Enters-Battle-Over-CAR-Cancer-Immunotherapy-Technology">here</a>.) The lead scientist behind Penn’s CAR T-cell program is Carl June. Now, of course, “Juno” was the queen of the Roman gods and certainly makes an appropriate name for a big important new company. But seeing how the company knew well before its launch it would be going a few rounds, legally speaking, with Penn – June v. Juno, in a manner of speaking – you have to wonder if the name is also a sly tweak of the nose. – <i>Alex Lash</i><br />
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<b>GlycoMimetics</b>: Two months after postponing its IPO, GlycoMimetics succeeded in going public on January 10th, grossing $64.4 million by selling 8.1 million shares (including the over-allotment) for $8. The biotech ended up offering more than the 5.75 million shares it had planned but at a steep haircut to its $14-16 price range. The IPO is the first in the biotech space in 2014, or second if you count rare disease-focused <a href="http://www.elsevierbi.com/deals/201430012">Retrophin's move</a> to Nasdaq from the OTC exchange. GlycoMimetics develops small molecules that mimic the structure of carbohydrates involved in key biological processes, in particular the complex carbohydrates that attach to the surface of proteins, altering their function and interactions with other molecules. Its first target is selectin, an adhesion protein involved in inflammation in multiple diseases. Lead compound GMI1070 (rivipansel), an E-, P-, and L-selectin antagonist, is in Phase II for painful vaso-occlusive crisis (VOC), a severe complication of sickle cell disease. It has US and EU orphan drug status, and if approved, the company claims it would be the first drug on the market to interrupt the underlying cause of VOC, which is currently treated by just managing the symptoms. <b>Pfizer </b>holds exclusive worldwide rights to GMI1070 under a 2011 deal. GlycoMimetics’ next project is preclinical GMI1271, in combination with chemotherapy for acute myeloid leukemia and other hematological cancers. An IND for the E-selectin inhibitor is planned for Q1 2014. Since the company’s 2003 founding, GlycoMimetics has raised nearly $63 million; its principal shareholders are New Enterprise Associates, Genzyme Ventures, Anthem Capital, Alliance Technology Ventures, and Rosetta Capital. – <i>Amanda Micklus</i><br />
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<b>Ultragenyx Pharmaceutical</b>: For its upcoming IPO, Ultragenyx has <a href="http://www.sec.gov/Archives/edgar/data/1515673/000119312514014673/d601113ds1a.htm">proposed to sell 4.8 million shares at $14 to $17 per share</a>; that would raise $75 million at the mid-point and value the company at $436 million. It expects to price on or around Jan. 30. The biotech already has a legion of top-flight crossover investors to ease its transition to the public markets, including Adage Capital Partners, Capital Research, Columbia Wanger Asset Management, Jennison Associates, BlackRock and Cowen’s investment arm Ramius. Cowen and Canaccord Genuity join bulge-bracketers J.P. Morgan and Morgan Stanley as underwriters. Existing shareholders paid an average price of $4.68 per share, according to the S-1 filing with the SEC. The biotech’s strategy has been to go after low-hanging fruit in the rare disease space by in-licensing candidates with a clear mechanism in which the patient is missing something that can be restored through treatment, CEO Emil Kakkis said <a href="http://retailroadshow.com/sys/launch.asp?qv=2729700220679864&k=212978161">on the road show</a>. It expects clinical data from five programs in the next 18 months, and is one of several biotechs with IPO ambitions that have big clinical milestones this year, as we report in the current START-UP. Ultragenyx anticipates Phase I/II data for KRN23, a monoclonal antibody to treat adults with X-linked hypophosphatemia, and for recombinant human beta-glucuronidase (rhGus), an intravenous enzyme replacement therapy to treat mucopolysaccharidosis 7 patients. In late 2014, it also expects additional Phase II data for an extended-release, oral formulation of sialic acid to treat hereditary inclusion body myopathy. – <i>Stacy Lawrence</i><br />
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<b>Alkermes</b>: The expert on long-acting injectable drugs used the J.P. Morgan stage to announce January 13 a $248 million financing through the sale of 5.9 million shares to Invesco Perpetual Income Fund and Invesco Perpetual High Income Fund at a price of $42.25 a share, a 2% premium. The sale gives Invesco a 4% stake in Alkermes. CEO Richard Pops followed the follow-on news with an announcement January 14 that the company expects to file a long-acting injectable form of the atypical antipsychotic <i>Abilify </i>(aripiprazole) in the second half of 2014, with a potential launch expected in 2015. Abilify is copromoted by Otsuka Pharmaceutical and Bristol-Myers Squibb. The Invesco investment adds to the $395.2 million on Alkermes’ balance sheet as of Sept. 30, 2013, and gives the company more flexibility as it moves into the next phase of its lifecycle as it continues to develop its late-stage neurology pipeline. The sale of a significant slice of outstanding shares hasn’t dampened investor spirits; Alkermes shares closed January 22 at $50.52, up 133% from where they stood a year ago. – <i>Jessica Merrill and Alex Lash</i><br />
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<b>Best of the Rest (Highlights of Other Activity This Fortnight)</b>: Two cancer-focused companies completed Series A rounds: <b>Madison Vaccines</b>, a firm with a Phase II prostate cancer vaccine (MVI816), brought in $8 million in an offering led by Venture Investors... University of Basel spin-off <b>Piqur Therapeutics</b> closed an oversubscribed Series A round from existing shareholders and new industry investors concurrent with the start of Phase I European trials for its mTOR inhibitor PQR309... Regenerative medicine company <b>Athersys </b>closed a $20.5 million registered direct offering of common stock and warrants to fund ongoing clinical trials; it has pipeline programs in inflammatory bowel disease, ischemic stroke, myocardial infarction damage, and graft-versus-host disease prevention... Three months after closing its $89.5 million IPO, rare disease therapeutics developer <b>Acceleron Pharma</b> priced a FOPO of 2.4 million shares at $50, grossing $120 million…after postponing its IPO in October 2013, <b>Celladon </b>(calcium dysregulation therapeutics) has revived the offering with a new S-1 filing… RNA start-up <b>Moderna Therapeutics</b> spun out its 15 oncology assets into <b>Onkaido Therapeutics</b> and invested $20 million in the new company, which will be run by run by Stephen Hoge, Moderna’s SVP of corporate development. – <i>Maureen Riordan</i><br />
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<i>Photo from the Gulltaggen award show courtesy of <a href="http://www.flickr.com/photos/gulltaggen/">Jarle Naustvik</a> via Creative Commons license.</i><br />
<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Anonymoushttp://www.blogger.com/profile/11736570307907834292noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-31720134172248739212014-01-17T14:50:00.001-05:002014-01-17T14:52:00.983-05:00Deals Of The Week: New Remedies Sought From Nature And Old Technologies<!--[if gte mso 9]><xml>
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To help calm many a frazzled J. P. Morgan attendee trying to get to grips with new ideas, technologies and market entrants announced each year at that key U.S. conference, there’s nothing like a return to tried and tested modalities, particularly in drug discovery.<br />
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Two deals announced this week in Europe appear to herald just such a return to basics, although on closer inspection these older drug discovery methods – searching through natural product libraries for active substances -- and the use of high throughput screening -- have never really gone away.<br />
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The first Europe-centered agreement, between France’s Sanofi and Germany’s applied research institute, the<a href="http://www.ime.fraunhofer.de/en/presse_medien/sanofi-and-fraunhofer.html"> Fraunhofer Institute for Molecular Biology and Applied Ecolog</a>y, involves identifying potential therapeutic substances from natural sources, mainly micro-organisms, to boost the number of antibiotics in development.<br />
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It might seem old hat: the venerable old-timer penicillin was isolated from natural sources, for example. Still, the collaborators are introducing a couple of new twists. They are going to work together, as one team in shared labs on analyzing the genetics of micro-organisms, stimulating them to produce new active substances, and identifying those substances with therapeutic potential. It’s part of Sanofi’s drive to get closer to cutting-edge science and external collaborators.<br />
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A new facility will be built on the <a href="http://www.elsevierbi.com/Publications/IN-VIVO/29/5/Sanofi-Reworks-RD-To-Tackle-Risk-Meet-Unmet-Need?result=1&total=1&searchquery=%253fq%253d2011800081">Institute’s campus to house the researchers</a>. Cross-pollination between this collaboration and Sanofi’s on-going alliance with <a href="http://www.elsevierbi.com/deals/201220011?result=1&total=1&searchquery=%253fq%253d201220011">venture-backed biotech Warp Drive Bio, which is scouring the genome</a> of soil samples for examples of natural products with therapeutic potential could be possible. Under that 2012 deal the French pharma gets right-of-first-refusal for all candidates stemming from the target area of the biotech’s first genomic search.<br />
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The German researchers have a secret weapon: access to Sanofi’s huge (150,000-plus samples) collection of micro-organisms built up by predecessor companies like Hoechst and Synthelabo, as well as by its own labs. The Fraunhofer Institute, a network or more than 60 research centers mainly based in Germany, with 30% of its funding from the German government and 70% from industry partners, gains from the deal by being able to exploit Sanofi’s collection for non-medical uses with its own partners. In the crop protection area, for instance, Sanofi could develop compounds that have potential as human or animal medicines.<br />
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The lack of new classes of anti-infectives nearing the market has horrified many public health experts, who are concerned by the emergence of bacterial resistance to commonly used agents. Thereis not a lot left in the locker to treat life-threatening infections. So it’s good news that other companies, such as<a href="http://www.elsevierbi.com/search?q=14131103002"> Roche, have re-energized their research efforts </a>in the field.<br />
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The week’s second European deal involves the setting up of a European joint venture called Hit Discovery Constance GmbH to conduct high-throughput screening (HTS) for biotech and academic partners, and to act as a storage and management facility for compound libraries. <br />
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HTS has been a disappointment to some; nonetheless it is now commonplace throughout industry and is often used to narrow down the choice of compounds likely to bind to targets, which are then refined through computer-based analysis and other processes.<br />
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Hit Discovery Constance is based in facilities in Constance, Germany, that have had a long line of previous owners – most recently Takeda Pharmaceutical Co. Ltd., and before that Nycomed SPA and Altana Pharma GmbH. Three European companies – Germany’s Lead Discovery Center, Italy’s Axxam SRL and Belgium’s Centre for Drug Design and Discovery - have set up the joint venture to run a fully-automated robotic screening system using a library of compounds assembled by the partners. Combined with other novel biochemical, bioassay and HTS technologies developed by the three partners, <a href="http://lrd.kuleuven.be/en/news/hit-discovery-constance-gmbh-a-new-european-hub-for-hts-and-compound-management">Hit Discovery Constance </a>will be one of the largest screening hubs worldwide.<br />
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The revival of technology previously thought to be a disappointment was also featured in the standout deal that kicked off the J. P. Morgan meeting, between RNAi developer <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/13/Alnylams-Comeback-RNAi-Developer-Partners-With-SanofiGenzyme?result=6&total=609&searchquery=%253fq%253dalnylam">Alnylam Pharmaceuticals Inc. of the U.S. and Sanofi’s biotech unit Genzyme</a>.<i>--John Davis </i></div>
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Now, time to get on with deals on other fronts. In a week that saw far more than its fair share of activities, we've culled some of the highlights, below:</div>
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<i>Moderna/Alexion:</i> A number of deals were made and broken within the RNA space during the J.P. Morgan gathering, including Moderna Therapeutics Inc.’s news it landed another major partner for its preclinical messenger RNA technology. Rare disease specialist Alexion Pharmaceuticals Inc. will pay $100 million upfront to purchase 10 product options and is taking a $25 million equity stake in the company. Moderna will use its mRNA platform to discover molecules for rare diseases and then transfer all rights to Alexion, which will handle preclinical and clinical work on the molecules. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/13/Moderna-Scores-Another-CashRich-Partnership-For-Its-Preclinical-Work?result=1&total=1&searchquery=%253fq%253d14140113004">Moderna will be eligible for clinical-stage and regulatory milestones</a> as well as high-single-digit royalties on any resulting products.<br />
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This deal is similar to one <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/3/21/AstraZeneca-Bets-Big-On-Modernas-Preclinical-Messenger-RNA-Technology?result=1&total=1&searchquery=%253fq%253d14130321004">Moderna struck with AstraZeneca PLC in March 2013 f</a>or the rights to more than 40 cardiovascular assets. The British pharma paid $240 million for the options. In both deals, Moderna will be eligible for undisclosed clinical and regulatory milestones, as well as royalties on any products that result. Moderna’s technology is designed to use messenger RNA to spur the production of therapeutic proteins. A day later, Moderna also announced that it was spinning out a satellite company<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/15/JP-Morgan-Notebook-Tuesday-January-14?result=1&total=1&searchquery=%253fq%253d14140114006">, Onkaido Therapeutics</a> to focus exclusively on oncology. Moderna is providing Onkaido’s first $20 million in capital.<i>--Lisa Lamotta</i><br />
<i>Regeneron/Geisinger:</i> Cash-rich <a href="http://investor.regeneron.com/releasedetail.cfm?ReleaseID=818844">Regeneron Pharmaceuticals Inc.’s collaboration with Geisinger</a> Health System on studying genetic determinants of human disease is one of the most ambitious efforts to date by a drug company to systematically apply genomic sequencing to the discovery of new drugs.<br />
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The deal is broad and long-ranging, initially signed for five years, but with a horizon that could go out 10 years. Announced on Jan. 13 at the start of the J.P. Morgan meeting, it calls for Regeneron to perform the heavy lifting on sequencing and genotyping and for Geisinger to provide samples collected from its patient volunteers. From Regeneron’s perspective, correlating genetic variations and human diseases could yield insights about disease and biomarkers leading to development of better drugs. Geisinger, at the same time, is looking for funding for its own research programs and to incorporate genetic advances into clinical care of its patients. Regeneron separately but simultaneously said it was creating<a href="http://investor.regeneron.com/releasedetail.cfm?ReleaseID=818845"> a subsidiary, the Regeneron Genetics Center LLC</a>, based at its Tarrytown campus, to pursue both large-scale and family-specific genomics studies.<br />
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The research collaboration will seek to sequence a minimum of 100,000 patients who are part of <a href="http://www.geisinger.org/research/overview/cso.html">Geisinger, which treats three million people a year</a>. During the initial five-year collaboration term, the Regeneron Genetics Center will perform sequencing and genotyping to generate de-identified genomic data. The size and scope of the study are meant to allow great precision in identifying and validating the associations between genes and human disease. No money changed hands, but Regeneron will pay Geisinger for its services. Down the road, if drugs or diagnostics come to market, Geisinger will receive small royalties on sales of products<i>.--Wendy Diller</i></div>
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<i>Prosensa/GlaxoSmithKline:</i> For our top “No-Deal of the Week,” <a href="http://www.elsevierbi.com/deals/200920430">GlaxoSmithKline has exited its 2009 collaboration in Duchenne muscular dystrophy (DMD) with Prosensa Holding BV</a>, but the Dutch biotech is determined to continue advancing a portfolio of DMD candidates on its own, at least for now.<br />
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Few observers were surprised when <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/14/Prosensa-Looks-To-Take-DMD-Programs-Forward-Remains-Hopeful-For-Drisapersen?result=1&total=1&searchquery=%253fq%253d14140114005">GSK decided to terminate the partnership Jan. 13, but Prosensa </a>says it hopes to continue developing drisapersen, a Phase III RNA antisense oligonucleotide exon-skipping compound which failed a Phase III trial last September.<br />
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In theory, drisapersen and Prosensa’s other candidates, three of which have reached mid-stage clinical development, address the underlying cause of DMD with exon-skipping technology that restores the expression of dystrophin protein. GSK paid $25 million upfront, with the potential for up to $665 million in milestones, in October 2009 for exclusive worldwide rights to drisapersen, as well as options on three other exon-skipping candidates. Although drisapersen demonstrated efficacy, as measured by improvement in the six-minute walk test (6MWT) in two other placebo-controlled trials, the companies announced Sept. 20 that it failed to meet its primary efficacy endpoint in the Phase III DEMAND III study.<br />
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Prosensa CEO Hans Schikan did not specify whether Prosensa paid GSK anything to re-acquire its intellectual property rights, including the options GSK had held, but said the multinational pharma holds no downstream rights for any of the DMD candidates. Prosensa earned at least $28 million in milestones under the collaboration with GSK, but Schikan said that cash was secondary in importance to the role GSK played in advancing drisapersen. “After this collaboration with GSK, and thanks to their commitment, we now have the largest database in DMD,” he said. He noted Prosensa probably never would have been in a position to develop this compound in this way. More than 300 patients have been treated in various clinical trials.<br />
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Schikan would not be pinned down on whether Prosensa will seek another co-development partner for drisapersen. The first order of business is to meet with stakeholders to see if there is a regulatory path forward for the compound, he said.<i>--Joseph Haas</i><br />
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<i>McKesson/Celesio: </i>Our other notable “No-Deal” was <a href="http://www.elsevierbi.com/search?q=14131024001">McKesson Corp.’s announcement Jan. 13 that it had failed to complete the acquisition of Germany-based drug wholesaler Celesio AG</a> because it did not attain the necessary 75% share position through its tender offer, despite raising its bid to €23.50 per share from the original €23. The acquisition was <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/10/24/McKessonCelesio-Deal-Targets-Generics-Purchasing-Synergies?result=7&total=41&searchquery=%253fq%253dcelesio">an effort to expand McKesson’s global reach</a>, but the outcome was contingent on acquiring a minimum of 75% of shares on a fully diluted basis. The bid was announced in October.<br />
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McKesson CEO John Hammergren raised the topic during the company’s presentation to the J.P. Morgan Healthcare Conference, also on Jan. 13, and said redoing the tender offer was not a possibility. As a result, the failed offer “clearly puts us back to the drawing board in some respects.”<br />
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“Although we remain optimistic that we will continue to find ways to add value to our company through capital deployment and continued scale, it's not clear to us that Celesio will be part of that,” he said. However, asked if a joint venture with Celesio might be an option, he observed, “We obviously have been talking to Celesio for some time about various alternatives. I think clearly there is an opportunity for us to venture with them and jointly buy. In the past, we had the view that an acquisition and the complete control of the asset would give us faster and better throughput than a joint venture would, but clearly a joint venture would be an alternative to consider.”<span id="goog_566049391"></span><i>--Scott Steinke</i><span id="goog_566049392"></span><br />
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<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Wendy Dillerhttp://www.blogger.com/profile/03585826601777354053noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-3583100772178408592014-01-15T11:55:00.001-05:002014-01-15T11:55:32.773-05:00Return to Seller: GlycoFi Next Tech to Exit Merck?As the J.P. Morgan conference began to clog the San Francisco streets and restaurants on Sunday night, Alnylam Pharmaceuticals <a href="http://www.elsevierbi.com/publications/the-pink-sheet-daily/2014/1/13/alnylams-comeback-rnai-developer-partners-with-sanofigenzyme">got the party started with a bang</a>. In industry's first major deal of the year, Alnylam signed a broad agreement with Sanofi’s Genzyme Corp. and, separately and perhaps more dramatically, bought Merck & Co.’s RNA interference assets (essentially the remnants of Sirna Therapeutics) for $175 million ($25 million was cash and $150 million in Alnylam stock).<br />
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The latter deal unleashed the schadenfreude. Merck <a href="http://www.elsevierbi.com/publications/in-vivo/24/10/merck-nabs-pole-position-in-rnai-with-11-billion-sirna-buy">paid $1.1 billion for Sirna</a>, then Alnylam’s biggest RNAi rival, back in 2006. It had been predictably if annoyingly tight lipped about any progress (or lack thereof) it was making with RNAi therapeutics ever since. And with 200 people within Merck working to surmount the therapeutic modality’s famous delivery challenges and more or less build an RNAi franchise for most of the past seven years, $1.1 billion was likely just the tip of the iceberg.<br />
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Why Alnylam wanted Sirna goes beyond (figuratively of course) putting the stuffed head of its former rival on the wall in the Cambridge company’s boardroom (but sure, on some level, that’s gotta be part of it?). Merck apparently did make some progress on sub-q delivery of RNAi and it had some IP that Alnylam likely wanted to tie up.<br />
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The broader point is that technologies once coveted by pharma but now seen as dead-end cost centers or just gathering dust may have utility – and potentially a lot of value – back out in the broader world. That’s been true for drug candidates for a long time – and we’ve seen plenty of deals where a company has acquired valuable drug compounds and eventually sold them off, even back to the VCs and executives that offloaded them in the first place (think Esperion, Vicuron, etc.).<br />
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Those originators are often the best placed to understand the compounds or technology and make another go at driving value. And Merck’s decision to part ways with Sirna and RNAi (and the ongoing reorganization the company’s R&D group) got us thinking about what other technologies the pharma may offload. One that comes to mind was another high-profile 2006 acquisition: the yeast-based antibody manufacturing play GlycoFi.<br />
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Allow us to speculate: <br />
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In May 2006 Merck <a href="http://www.businesswire.com/news/home/20060509005636/en/Merck-Acquire-GlycoFi-Acquisition-Enhances-Merck-Capabilities">plunked down $400 million to buy the technology</a>. On a Sirna-scale, that’d mean a $10 million (or less!) down payment might be enough to extricate the technology. And GlycoFi founder Tillman Gerngross and his venture backers are now at the center of <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/10/31/Adimab-Inside-Polaris-Orbimed-Back-Antibody-Attack-On-Novel-Alzheimers-Biology">myriad antibody discovery partnerships</a> via the decidedly profitable Adimab and a small handful of drug development start-ups enabled by the Adimab technology. They would be a logical set of suitors (Gerngross wouldn’t comment).<br />
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GlycoFi’s glycoengineering and optimization technologies would surely complement Adimab’s yeast-based antibody discovery tech. The company was never fully integrated into Merck and is still based in Lebanon, NH, home to Adimab and Gerngross’s other ventures (if the two companies don’t share an address, they’re at least within walking distance to each other near Dartmouth). GlycoFi was meant to enable Merck’s follow-on biologics strategy, but the big company’s ambitions around what is now biosimilars have shifted over the past several years. Biosimilars leadership specifically and R&D leadership more generally has turned over. GlycoFi’s ‘internal champion’ at Merck is likely gone. Merck is, like other big companies, shrinking its R&D footprint.<br />
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Adimab has somewhat famously – famous for the set that converges around Union Square in San Francisco this time of year, anyway – <a href="http://invivoblog.blogspot.com/2011/01/jpmorgan-healthcare-conference-where.html">advertised</a> its technologies and successful partnerships on the Powell-Mason cable cars that roll up the hill out front of JPM’s epicenter St. Francis hotel. The current biotech boom feels very much like a throwback and so it’d be fitting: maybe next year we’ll see GlycoFi on those cars instead?<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-81475170704816698812014-01-10T15:00:00.002-05:002014-01-12T20:23:22.944-05:00JPM Survival Guide: DOTW Keeps the Party Going<div class="separator" style="clear: both; text-align: left;">
<span style="text-align: center;">The last few years have been quite a bash for biotech. Astoundingly, the NASDAQ Biotechnology Index (NBI) has added more now than it did during the genomics bubble.</span></div>
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Since the current biotech rally started around August 2011, the NBI has increased about 1,500 points. Around the turn-of-the-millennium, the NBI rose around 1,200 points in a year and a half. Then over the following roughly two years, the NBI proceeded to give back all but about 200 points of that gain by mid-2002.<br />
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That makes the ongoing, almost two-and-a-half year upswing the longest, highest biotech rally to date. </div>
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Does this make anyone else nervous? Apparently not, at least not yet. (In December, Mark Schoenebaum of ISI Group circulated a succinct, hypothetical argument for the <a href="http://www.isigrp.com/isia/updf.jsp?c=134370&y=2013&f=12-11sbio20.pdf&s=3RRl0teEqiFT%2FIdbQUG2XQ%3D%3D" target="_blank">bear case in biotech</a>. But this is not his view on the sector.)<br />
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Going into the 32nd Annual J.P. Morgan Healthcare Conference, optimism in the sector is continuing unabated. The NBI is up over 5% already this year, by market close on Jan. 10.<br />
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That doesn’t even include the phenomenal, two-day 516% climb for Intercept Pharmaceuticals after its Data Safety Monitoring Board recommended stopping early for efficacy at an interim analysis of a Phase II trial of its obeticholic acid to treat the liver disease nonalcoholic steatohepatitis. Intercept isn’t an <a href="http://finance.yahoo.com/q/cp?s=%5ENBI" target="_blank">NBI component</a>. In one week, the biotech has leapt from mid-cap into large-cap territory; it now has a market cap of $8.6 billion, up from $1.4 billion ahead of the news.<br />
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On the news front at JPM, Wall Street expects <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/50/Celgene-Looks-To-Longer-Revlimid-Duration-In-MM-To-Expand-Revenue?result=2&total=34&searchquery=%253fq%253dcelgene%252520stacy" target="_blank">Celgene </a>and Acorda will pre-announce 2014 guidance at JPM. Celgene has hinted it may also update its long-term guidance for 2015 and 2017. Exceeding even the very early JPM curve, Eli Lilly and <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/8/What-To-Do-With-34-Billion-Deals-And-Dividends-Says-BMS-Andreotti?result=3&total=11324&searchquery=%253fq%253dbristol%252520myers" target="_blank">Bristol-Myers Squibb</a> have already pre-announced their 2014 guidance.<br />
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Other likely highlights include various details from big biopharmas with recent management changes. We could get hints from Teva about the direction it plans under <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/2/Teva-Director-Vigodmans-Name-Floated-As-New-CEO?result=2&total=720&searchquery=%253fq%253dteva%2526hlsu%253dHeadlines" target="_blank">newly appointed President and CEO Erez Vigodman</a>, as well as some color from Amgen on why CFO Jonathan Peacock is departing.<br />
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The above should give you a few talking points, as will the deals discussed below. That’s essential when you run into industry colleagues you are just meeting or seeing for the first time in years.<br />
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A <a href="http://macb.io/JPM2014/JPM2014_MBI-Reception-List.pdf" target="_blank">list of all the JPM parties</a> is also indispensable. Last year was the first time we saw a spreadsheet of all these events. Despite the fact that the Excel document ran a couple of pages, shockingly there were still a few omissions discovered by us and a hedge fund manager who shall remain anonymous.<br />
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One of this year’s versions of the JPM party list, linked to above, has been upgraded to a PDF and carefully annotated to note invitation-only parties. Although we wonder, isn’t this list specifically designed for party crashers? Or, maybe it’s just so we’ll know all the fabulous parties we weren’t invited to? The most prosperous entities at any given time always seem to commandeer the penthouse at the pricey Clift Hotel, but of course no spot is cheap at the height of the conference.<br />
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Another JPM must is <a href="http://www.cdc.gov/handwashing/when-how-handwashing.html" target="_blank">a lot of hand-washing</a> – someone at the last JPM gave DOTW a horrible case of the stomach flu that felled us by Wednesday afternoon. Not to alarm anyone, but the number of <a href="http://www.google.org/flutrends/us/#US" target="_blank">flu cases in the U.S. is peaking</a> right now, with a heavy concentration in the Western states. And a San Jose hospital reportedly <a href="http://www.ktvu.com/news/news/local/overflow-cases-require-flu-tent-san-jose-hospital/ncgqd/" target="_blank">set up an over-flow tent</a> because of all the flu patients. So, avoid shaking hands with all those Silicon Valley VCs, unless you really need their money.<br />
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And for the ladies: no high heels, please. Unless you’re a former model trained to stand the fourteen hours of pain or you are powerful enough to have a suite where everyone is coming to you. Although JPM has promised it’s working to cut back on some (non-paying) attendees this year, so perhaps there will be ample seating at every major session and the hallway traffic will flow freely. Or not.<br />
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Most importantly, remember to 'slip' at least once and call the conference H&Q. So, everyone will know you’ve been coming to the conference for a long, long time.<br />
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As promised, we continue below to give you ample party-chatter fodder with the latest on biopharma wheeling and dealing in this week’s missive of . . .<br />
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<a href="http://3.bp.blogspot.com/-3Q2AVywDb90/Us86hD-B3rI/AAAAAAAAAiU/81oQs6p-qgw/s1600/DOTW.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="22" src="http://3.bp.blogspot.com/-3Q2AVywDb90/Us86hD-B3rI/AAAAAAAAAiU/81oQs6p-qgw/s1600/DOTW.jpg" width="320" /></a></div>
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<b>Forest/Aptalis: </b>Forest Laboratories continues to build on the business development strategy of new CEO Brent Saunders with its <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/8/Forest-Builds-On-Saunders-Strategy-With-29B-Aptalis-Buy?result=1&total=1&searchquery=%253fq%253d14140108007" target="_blank">$2.9 billion buy of privately-held Aptalis</a> on Jan. 8. The specialty pharma has been trying to flesh out its key therapeutic areas – CNS, CV, GI, respiratory, and anti-infectives – since Saunders took over the top slot in October. This strategy began with Forest’s <a href="http://www.elsevierbi.com/deals/201320518?result=1&total=1&searchquery=%253fq%253d201320518" target="_blank">$240 million purchase of the antipsychotic </a><i><a href="http://www.elsevierbi.com/deals/201320518?result=1&total=1&searchquery=%253fq%253d201320518" target="_blank">Saphris</a> </i>(asenapine) from Merck & Co. in December; building on the company’s central nervous system franchise, which includes the antidepressants <i>Viibryd </i>(vilazodone) and <i>Fetzima </i>(levomilnacipran). Aptalis will give Forest multiple products in the GI space – <i>Carafate </i>(sucralfate) for duodenal ulcer disease and <i>Canasa </i>(mesalamine) for ulcerative proctitis, as well as others. The privately held company also has a strong presence in the cystic fibrosis space in Europe, where it owns three of the five approved drugs for pancreatic enzyme insufficiency: <i>Zenpep</i>, <i>Ultrase </i>and <i>Viokase </i>(pancrelipase, in three formulations). Forest sees this as a way of bolstering its <i>Colobreathe </i>(colistimethate sodium) business. The drug was approved in February 2012 in Europe for the treatment of cystic fibrosis patients aged 6 years and older with chronic lung infection caused by <i>P. aeruginosa</i>. The spec pharma hopes eventually to bring those products to the U.S. market. Forest is acquiring all outstanding shares of the TPG Capital-backed Aptalis with a mixture of cash and debt. The company has secured a $1.9 billion bridge loan to close the deal within the first half of the year, pending regulatory review. The acquisition is expected to add $700 million to 2015 revenues and be immediately accretive to earnings. <i>-- Lisa LaMotta</i><br />
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<b>Royalty Pharma/Fumapharm investors:</b> Royalty Pharma – the investment firm that buys up royalty streams on marketed drugs – is doubling down on its investment in Biogen Idec’s multiple sclerosis drug <i>Tecfidera </i>(dimethyl fumarate), the stand out drug launch of 2013. The firm announced Jan. 6 it would acquire more interest in the earn-outs payable to the former shareholders of Fumapharm for $510 million. Biogen Idec gained dimethyl fumarate with the <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2006/5/31/Biogen-Idec-Will-Move-MS-Therapy-Into-Phase-III-After-Fumapharm-Buy?result=1&total=1&searchquery=%253fq%253d14060531004" target="_blank">acquisition of Fumapharm in 2006</a>. Royalty Pharma already owns an interest in Tecfidera from a deal inked with Fumapharm investors in 2012, when it paid $761 million for some rights, back before the drug was approved by FDA. Now it’s obvious why Royalty has come back for more. Tecfidera, which launched in April, appears on pace to generate more than $1 billion in its first 12 months on the market. The royalty company won’t say how much of the sales it stands to receive. Fumapharm investors still own rights to a “substantial portion” of the earn-outs, Royalty said. Under a <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/8/9/Royalty-Pharma-Earns-Its-Profits-The-Slow-Way?result=1&total=1&searchquery=%253fq%253d14130809003" target="_blank">complicated payout scheme</a> laid out in Biogen Idec’s SEC filings it appears the entire earn-out is worth about 10% of Tecfidera sales annually if the drug reaches $3 billion in sales, which it now seems likely to do. <i>-- Jessica Merrill</i><br />
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<b>Biogen Idec/Sangamo: </b>In a move that could help validate its proprietary genome-editing technology and further strengthen its balance sheet, Sangamo BioSciences signed a worldwide <a href="https://auth.elsevierbi.com/?sc_itemid={b5d3afcd-a431-4d09-94d7-e79dab54c75b}&sc_mode=preview&sc_lang=en" target="_blank">collaboration and licensing agreement with Biogen Idec</a> on Jan. 9 to co-develop potentially curative stem cell therapies for sickle cell disease (SCD) and beta-thalassemia. During a same-day conference call, Sangamo President and CEO Edward Lanphier noted that those two hemoglobinopathies are serious diseases with sub-optimal current treatment options. There are a number of symptomatic approaches to treating the two conditions that do not address the underlying cause of the disease. And while a bone marrow transplant of hematopoietic stem cells can be curative, such procedures are rare due to a lack of ideal matching donors and the risk of graft versus host disease. Biogen is paying $20 million upfront for worldwide license to both Sangamo’s zinc finger nuclease technology platform and its preclinical intellectual property for treating the two diseases. Richmond, Calif.-based Sangamo also can earn up to $300 million in development, regulatory, commercialization and sales milestones under the agreement with Biogen, along with double-digit royalties on any product sales. In addition, the biotech has an option to co-promote for either indication in the U.S., a decision which the company will not need to make for some time, Lanphier said. Sangamo will continue to perform all R&D activities through the first clinical proof-of-concept trial in beta-thalassemia, while the companies will work together on the IND-enabling work for the program in SCD. Biogen will be responsible for all subsequent clinical development and commercialization of both programs, and will reimburse Sangamo for its internal and external R&D costs related to both programs. <i>-- Joseph Haas</i><br />
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<b>Johnson & Johnson: </b>To bolster its <a href="http://www.elsevierbi.com/publications/in-vivo/30/9/jampjs-new-innovation-centers-test-immersion-theory-of-access" target="_blank">network of innovation centers</a>, the global health care company said this week it has helped establish a new incubator in Israel and has signed early stage collaborations or made investments with eight biotech and academic groups. Johnson & Johnson is teaming with the Israeli government, Takeda, and venture firm OrbiMed Advisors to open the facility in early 2014, adding to incubators J&J has opened with partners in Montreal, Toronto, San Francisco, and Boston. J&J’s Janssen group also runs an incubator in San Diego. The collaborations or licenses are with Cambridge, Mass. biotech <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/8/Janssen-Tabs-StartUp-Scholar-Rock-For-New-Immunology-Approach" target="_blank">Scholar Rock</a>, to pursue new biologics that target TGF-beta 1 for immune-mediated disease; Intrexon, to develop new consumer hair and skin products; University of Texas's MD Anderson Cancer Center, to develop a translational program for cancer immunotherapy; diagnostic firm Nodality, to hone J&J’s immunology R&D, particularly in rheumatoid arthritis and inflammatory bowel disease; and Dutch firm Bioceros, for exclusive rights to develop a monoclonal antibody against an immune checkpoint modulator. Through its venture arm Johnson & Johnson Development Corp., the J&J Innovation group also announced investments in Assembly Therapeutics, which is developing allosteric modulators to treat Hepatitis B and other viral infections; TopiVert, which is working on topical medicine for inflammatory diseases; and SutroVax, a new entity spun out from antibody platform company Sutro Biopharma to pursue vaccines. <i>-- Alex Lash</i><br />
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<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Anonymoushttp://www.blogger.com/profile/04100128702024908186noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-90888733660446743972014-01-10T08:37:00.001-05:002014-01-10T09:49:41.980-05:00A Rush And A Push And The Financings Of The Fortnight Is Ours<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://2.bp.blogspot.com/-G89BOg__zEc/Us-w_98cVfI/AAAAAAAAA2Q/DOmr0fho8NE/s1600/stampede.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://2.bp.blogspot.com/-G89BOg__zEc/Us-w_98cVfI/AAAAAAAAA2Q/DOmr0fho8NE/s1600/stampede.jpg" height="265" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Meet us at the St. Francis, and bring your own damn water!</td></tr>
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Happy Morgan's Eve, everyone. If you’re like FOTF, you’ve been preparing for the week ahead by breaking your day into 25-minute conversations. If our kids need to talk to us, we tell them to take the stairs to the tenth floor, run down the hall, squeeze past 120 people coming out of the bathroom, steal some bottled water left outside a partnering suite, and find Room 1450. <i>Come in, sit down, just wait while we finish a few emails on our phones. Yes? You can’t sleep? Not exactly an unmet medical need. </i>We’ve also wondered a few times if a toddler’s point blank sneeze into one’s mouth counts as a new form of immunotherapy.<br />
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For those of you with older children, you might be practicing for JPMorgan this week when the conversation inevitably turns to financing. <i>Hit your yard-work milestones to trigger the next allowance tranche. That’s the way it is as long as you live under my term sheet, er, roof. </i><br />
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Whatever the year, there’s always a sensation of falling out of a holiday tree, or warm cozy bed, directly into the boiling JPMorgan cauldron. This year, organizers gave us a bit of a break, pushing the conference back one week, but the slight lag was immediately filled up by <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2014/1/3/Six-Life-Science-Bets-For-2014">a breakneck filing of IPO documents</a>: Six so far in the new year alone, adding to several that squeezed their paperwork through before the ball dropped on New Year’s Eve. (We have details on one of those filers, Flexion Therapeutics, in our roundup below.) A few of those, plus others still in the IPO queue after filing in the back half of 2013, have significant Phase II or Phase III clinical milestones. Yet others that haven’t declared publicly their IPO intentions also have big milestones upcoming, and we can’t help but think their S-1’s won’t be too far behind if a few companies currently in the queue make their debuts soon.<br />
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In the next <i>Start-Up</i>, our colleague Stacy Lawrence previews several private companies with upcoming late-stage clinical data, and one thing’s clear: There’s not a lot of 100% novel technology working up the pipeline. That’s not to say the companies in question aren’t doing important or technically difficult work. But many of the products due for data have an element of de-risking that made for faster development and a more reasonable investment thesis, especially worth noting when the company is making a push in an indication where approval has been an elusive target.<br />
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For example, Intarcia Therapeutics is delivering an off-patent diabetes drug, exenatide, via a subcutaneous pump that carries a year’s worth of treatment. Intarcia hasn’t filed an S-1 yet, not publicly anyway, but its deep roster of crossover investors makes one hear a ticking clock -- or is that the beat of the subcutaneous pump?<br />
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We can’t help but pump <i>Start-Up</i>'s upcoming A-List, the annual roundup of the year’s top Series A financings. The 2013 winners include entrants from the fields of gene therapy, immunotherapy, epigenetics and food allergies, and a few have had very unusual financial backers. Learning who's who will be your reward for surviving next week. <br />
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And a year from now, perhaps the 2014 A-Listers will include a biotech that has launched with equity crowdfunding. That would be a first. One crowdfund platform that we’ve reported on before, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2012/12/6/Poliwogg-Aims-To-Disrupt-Life-Science-Crowdfunding-With-A-Novel-Investment-Model">Poliwogg</a>, will try to make a splash in San Francisco next week, so stay tuned to our colleagues from "The Pink Sheet" and Start-Up for more on that. We regret to inform, however, that splashing is generally frowned upon these days in California. Unlike IPOs, raindrops are in short supply, and 2013 was the driest year on record. So we ask you out-of-towners to think twice before showering while you’re here, and if a stranger on the street looks longingly at your Evian, be kind. We’re parched. Better yet, you can save water by drinking your fill of 2014’s first installment of...<br />
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<b>Flexion Therapeutics</b>: As its clinical candidates for treating osteoarthritis inch closer to pivotal studies, Flexion has <a href="http://www.sec.gov/Archives/edgar/data/1419600/000119312514005391/d621839ds1.htm">joined the IPO parade</a>. In case anyone’s knees hurt from all that marching, Flexion’s three compounds are formulated for long-lasting pain relief and injection directly into the knee joint. FX006, Flexion’s lead product for front-line use, is a formulation of a common steroid, triamcinolone, that in 2013 posted <a href="http://flexiontherapeutics.com/wp-content/uploads/2013/10/Flexion-Therapeutics_ACR-Data_102813-FINAL.pdf">solid Phase IIb results</a>, but the company still has work to do: it plans a second Phase IIb trial that is set to begin in the second quarter of 2014, to determine the drug’s optimal dose before Phase III. A second product, FX005, is a sustained-release p38 inhibitor; Flexion is positioning the product for end-stage (pre knee replacement) osteoarthritis pain. The company aims to file an IND for a third product, the TrkA antagonist FX007 for post-op pain, later this year. Both ‘005 and ‘007 were licensed from AstraZeneca PLC, in separate deals. Flexion’s founders, Michael Clayman and Neil Bodick, famously institutionalized “A-Team”-style rapid and inexpensive to-proof-of-concept drug development at Eli Lilly & Co. as creators of that company’s ‘Chorus’ model, and struck out on their own in 2007 to monetize POC assets as a stand-alone biotech. At the time, they anticipated that by licensing in pharma assets they could develop and flip them quickly. But the economics they were offered weren’t going to provide the kind of returns they originally anticipated. The <a href="http://flexiontherapeutics.com/wp-content/uploads/2013/07/Flexion_IV1303.pdf">company’s reinvention underscores</a> the difficulty of timing biotech models to pharmaceutical tastes, and – at least during the comparably leaner years of 2011-12 – pointed to industry’s increased avoidance of clinical risk. Flexion’s private backers – Versant (~30%), Sofinnova (~19%), Pfizer (~17%), 5AM (~16%), and Novo AS (~11%) – surely hope that timing public investors’ enthusiasm for biopharma is an easier task. – <i>Chris Morrison</i><br />
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<b>AC Immune</b>: When the big Alzheimer’s Phase III trials featuring anti-amyloid treatments failed in 2012, many eyes in the field turned to AC Immune. With arguably the deepest Alzheimer’s pipeline of any private biotech, the Swiss firm <a href="http://www.acimmune.com/content/img/pdf/FinancingD_20140109_final.pdf">said January 9 </a>it has raised a Series D round of 20 million Swiss francs ($22 million) from existing investors. It also said it has launched a Phase I trial of a vaccine to stimulate a patient’s antibodies against phosphorylated tau, a protein that accumulates in tangled formations within neurons. Tau tangles, along with amyloid plaques, are considered two signposts of Alzheimer’s disease, but much debate remains whether the pathologies are treatable or simply an effect of disease progression. Meanwhile, one of the world’s most closely watched Alzheimer’s trials has just begun dosing patients with AC Immune’s monoclonal antibody crenezumab. The trial is funded by Genentech, the Banner Institute, and the US National Institutes of Health, and it involves people in Colombia with high genetic risk of Alzheimer’s who have yet to show cognitive decline. If successful, it would be one of the first signals that anti-amyloid therapy has a preventative effect if administered before symptomatic onset. Dosing began in December, according to AC Immune. The firm has raised 84 million Swiss francs since its 2003 inception, all from individual investors. – <i>Alex Lash</i><br />
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<b>Receptos</b>: Seven months after <a href="http://www.elsevierbi.com/deals/201330169" target="_blank">completing its IPO</a>, Receptos turned back to public shareholders to raise more money, <a href="http://ir.receptos.com/releasedetail.cfm?ReleaseID=818039" target="_blank">grossing $102 million in a follow-on public offering</a>
on January 8. The biotech sold 3.3 million shares for $30.75, a 120%
increase from its $14-per-share IPO price. Days before the offer closed,
Receptos started enrolling patients in the Phase III portion of its
RADIANCE trial of lead candidate RPC1063 for relapsing multiple sclerosis. RPC1063 is being tested in a
separate Phase II trial in ulcerative colitis, and Receptos plans to
release top-line data on both indications in mid-2014. Recently the
USPTO issued composition-of-matter patents on RPC1063, giving the
compound patent coverage until at least May 2029. Receptos is busy with
others in the pipeline too: it’s designing a Phase II study of
RPC4046 in active eosiniphilic esophagitis. AbbVie <a href="http://www.elsevierbi.com/deals/201320105" target="_blank">partnered</a>
the anti-interleukin-13 antibody with Receptos in May. Once the study
results are published, AbbVie has an option to enter into a worldwide
co-development deal with Receptos, which would retain co-promotion
rights and split US profits. In addition, this year Receptos expects to
select a lead agent from its glucagon-like peptide-1 receptor
small-molecule positive allosteric modulator program and start
IND-enabling studies in Type II diabetes. -- <i>Amanda Micklus</i><br />
<br />
<b>Blueprint Medicines</b>: The Cambridge, Mass. biotech said January 7 it had <a href="http://www.nextechinvest.com/images/Blueprint_seriesb_financing.pdf">secured a $25 million Series B</a> round as it pushes its selective kinase inhibitors, aimed at specific mutations mapped through its platform, toward the clinic. It says its lead compounds should enter the clinic in 2015. They are an inhibitor of the mutation that drives both systemic mastocystosis, an overproduction of mast cells in various organs and tissues, and a subset of gastrointestinal stromal tumors; and an inhibitor of a mutation that leads to a specific type of hepatocellular carcinoma. The firm was initially funded by Third Rock Ventures and Fidelity Biosciences, but neither of those deep-pocketed groups has taken the lead for the B round. Instead, Swiss oncology investment specialists Nextech Invest led the round, with crossover investors Biotech Value Fund and Casdin Capital, Third Rock, and Fidelity, and other undisclosed investors joining in. The crossovers could be a sign that Blueprint is gathering itself for a run at the public markets this year. The firm has been led since last spring by an interim CEO, Third Rock partner Alexis Borisy, who took over for co-founder Chris Varma without an announcement. – <i>A.L.</i><br />
<br />
<b>Best of the Rest (Highlights of Other Activity This Fortnight)</b>: <b>Alexar Therapeutics</b>, the latest biotech to come out of asset-based financing entity <a href="http://www.elsevierbi.com/publications/start-up/17/10/nexeption-not-the-rule-another-twist-on-assetbased-financing" target="_blank">NeXeption</a>, closed on a <a href="http://finance.yahoo.com/news/nexeption-llc-forms-company-alexar-123000035.html" target="_blank">$21.5 million Series A round</a> led by New Science Ventures and Third Point Ventures to support work on a topical liver X receptor agonist for inflammatory cutaneous disorders…<b>Auspex</b>, which has a S-1 on file to go public, <a href="http://www.prnewswire.com/news-releases/auspex-raises-35-million-and-appoints-industry-veteran-gerald-proehl-to-its-board-of-directors-239237571.html" target="_blank">raised more venture dollars</a>: the orphan disease-focused biotech received $20 million in Series E financing and $15 million in a venture loan...<b>Neuralstem</b> will advance cell therapeutics and small molecules, including lead spinal cord stem cell-derived NSI566 for ALS, thanks to <a href="http://www.prnewswire.com/news-releases/neuralstem-closes-20-million-registered-direct-offering-239419411.html" target="_blank">a $20 million registered direct offering</a>…after postponing its IPO in November, <b>GlycoMimetics</b> <a href="http://www.elsevierbi.com/deals/201330554" target="_blank">revived the offering</a> and set terms at 5.75 million shares for $8…and <b>GW Pharmaceuticals</b>, maker of cannabinoid prescription drug <i>Sativex</i>, <a href="http://www.prnewswire.com/news-releases/gw-pharmaceuticals-plc-announces-pricing-of-us-follow-on-offering-of-adss-raising-879-million-on-nasdaq-global-market-239362931.html" target="_blank">raised $88 million in a FOPO</a>. -- <i>AM</i><br />
<br />
<i>Stampeding wildebeests (heading to the Celgene presentation?) courtesy of <a href="https://www.flickr.com/photos/t3rmin4t0r/">t3rmin4t0r</a> under Creative Commons license. </i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Amanda Micklushttp://www.blogger.com/profile/02445930031260123049noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-57466873424258395622014-01-07T12:14:00.002-05:002014-01-07T12:18:49.722-05:00And The Roger Goes To ... Our Deals of the Year Winners!<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-KzQrYGbAoMs/UswPrzWdxNI/AAAAAAAAFIE/yPWzrF2ORQo/s1600/doty-award.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://3.bp.blogspot.com/-KzQrYGbAoMs/UswPrzWdxNI/AAAAAAAAFIE/yPWzrF2ORQo/s1600/doty-award.jpg" height="640" width="465" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><i><b>To Claim Award: Ctrl-P, cut along border, tape to plaque (note: plaque not included).</b></i></td></tr>
</tbody></table>
<br />
<b>M&A of the Year: Amgen/Onyx</b><br />
<br />
Congratulations to Amgen and Onyx, who've won, with <a href="http://pages.elsevierbi.net/DOTY/2013/">more than 62% of the vote</a>, our M&A of the Year nod. The voters chose <a href="http://invivoblog.blogspot.com/2013/12/2013-m-of-year-nominee-amgenonyx_12.html">the biggest deal</a> -- though there were <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-m-of-year-are.html">other interesting nominees</a> we aren't surprised -- and we'll all be watching <i>Kyprolis</i> to see whether the price was right. <br />
<br />
<b>Alliance of the Year: Celgene/Oncomed</b><br />
<br />
This one was never in doubt. Celgene and Oncomed knew how to canvass, their Get Out The Vote strategy was clearly second to none (the alliance category tallied about 1000 more votes than the other categories). And even a late push from <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee-gsk.html">GSK/Community Care of North Carolina</a> (no doubt helped by voters turning up to support GSK in its close race below) couldn't derail Celgene and Oncomed's cancer stem cell alliance from the top spot. It finished with about <a href="http://pages.elsevierbi.net/DOTY/2013/">63% of the vote</a>.<br />
<br />
<b>Financing of the Year: GSK/Avalon</b><br />
<br />
As of this morning the two leaders in this category -- Children's Hospital of Philadelphia <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee-chop.html">funding Spark Therapeutics</a> and <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee_17.html">GSK/Avalon</a> -- were separated by only a few dozen votes out of thousands cast. Finally, a race worth watching 'til the end. Spark began to pull away, stretching its lead to a few percentage points with an hour to go. And then GSK/Avalon swung back, pipping them at the post in the waning moments of voting. <a href="http://pages.elsevierbi.net/DOTY/2013/">GSK/Avalon 48%</a>, Spark 47%. The achievement is even more impressive in light of the nature of the also-rans. Calico, Juno, and Editas were all noteworthy debuts in 2013. Ophthotech had possibly the best IPO in a crowded biotech IPO field. None of those four deals received more than a tiny sliver of the vote. <br />
<br />
<i>As always our winners are welcome to make an acceptance speech in the form of a guest post here on In Vivo Blog. Winners, please reach out if you'd like to do so. Thanks everyone for voting again this year, and congratulations to our winners!</i><br />
<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-79195201196129629992014-01-03T19:38:00.002-05:002014-01-06T15:58:50.424-05:002013 Deals Review Finds Spec Pharma, Bolt Ons Dominated M&A<!--[if gte mso 9]><xml>
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As the door shuts on 2013 and we reflect on the year’s biopharma
M&A activity, what’s most noteworthy is the activity of specialty
pharmaceutical and big biotech companies, which supplanted Big Pharma as the
year’s most aggressive buyers. An optimist might argue that industry’s largest
players are savvy avoiders of overvalued assets; another possibility is that
they’re simply losing the battle to acquire tomorrow’s growth-drivers.</div>
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<a href="http://www.elsevierbi.com/deals/201310091">Amgen Inc.’s $9.7 billion (net of cash) purchase of Onyx Pharmaceuticals in October </a>was the industry’s largest of the year. It
reflected the value Onyx built up over years as it grew a successful R&D
and commercial operation, and, most notably, the potential of its key asset,<i style="mso-bidi-font-style: normal;"> Kyprolis</i> (carfilzomib), which gained
U.S. approval for treatment of multiple myeloma in July 2012.<span style="mso-spacerun: yes;"> </span>After receiving the offer in June 2013, <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/35/Amgen-Wins-Onyx-But-Will-The-Deal-Pave-The-Road-To-Transformation?result=19&total=211&searchquery=%253ftype%253dArticles%2526company%253dequals%25253aOnyx%252520Pharmaceuticals%252520Inc.%2526start%253d11">the biotech tried for several weeks to push up Amgen’s original proposed price of $120 per share ($8.7 billion) </a>and finally agreed to a price of $125 a share.
Analysts had predicted that Onyx would get $10 to $30 more per share than the
original offer, but uncertainty surrounding Kyprolis’ peak potential kept
buyers’ enthusiasm in check.</div>
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Of 92 biopharma-related M&A deals that closed in 2013,
nearly 15% – including half of the top ten deals by upfront price – involved specialty
pharma buyers. Of these buyers, <b style="mso-bidi-font-weight: normal;">Valeant
International Inc.</b>, <b style="mso-bidi-font-weight: normal;">Endo Health
Solutions Inc.</b>, <b style="mso-bidi-font-weight: normal;">Opko Health Inc.</b>,
and the much-reconfigured <b style="mso-bidi-font-weight: normal;">Elan Corp. PLC</b>
were particularly active, with each pursuing two or more acquisitions. </div>
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Valeant, <b style="mso-bidi-font-weight: normal;">Perrigo
Co.</b> and <b style="mso-bidi-font-weight: normal;">Actavis PLC</b> were the top
three spenders, while <a href="http://www.elsevierbi.com/deals/201310064">Valeant’s acquisition of privately held Bausch & Lomb for $8.7 billion</a> came in as the industry’s second largest acquisition of the
year.
B&L will continue to operate as a separate subsidiary within Valeant, which
has led the way within the industry in favoring financial efficiency over
R&D innovation as a driver of M&A. Valeant in April also acquired the
mid-sized dermatology-focused pharma <a href="http://www.elsevierbi.com/deals/201310035?result=12&total=409&searchquery=%253ftype%253dDeals%2526company%253dequals%25253aValeant%252520Pharmaceuticals%252520International%252520Inc.%2526start%253d11">Obagi Medical Products Inc. </a>for $418.4
million.<br />
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<b>Deals Of The Year</b></div>
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Our editors have selected what they view as the most
significant and intriguing deals of 2013 in three categories – in addition to
M&;A, we’ve included alliances and financings – and invite readers to vote
on their favorites. Please view profiles of our nominees at <a href="http://pages.elsevierbi.net/DOTY/2013">http://pages.elsevierbi.net/DOTY/2013</a>.
Polls are open until noon ET on Jan. 7.</div>
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Perrigo and other less traditionally visible buyers also
reflected the strength of specialty pharma companies. Gastroenterology-focused <a href="http://www.elsevierbi.com/deals/201310035?result=12&total=409&searchquery=%253ftype%253dDeals%2526company%253dequals%25253aValeant%252520Pharmaceuticals%252520International%252520Inc.%2526start%253d11">Salix Pharmaceuticals Ltd. is in the process of buying specialty pharma Santarus Inc. </a>for $2.1 billion, while the <a href="http://www.elsevierbi.com/deals/201310103">latter</a>, in a surprise move, bought <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/31/Elans-Saga-Comes-To-A-Close-With-Perrigos-86-Billion-Bid?result=31&total=186&searchquery=%253ftype%253dArticles%2526company%253dequals%25253aPerrigo%252520Co.%252520PLC%2526start%253d31">Elan</a>
for $8.3 billion. </div>
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Also notable was the complete absence from M&A of some
of the industry’s biggest companies; <b style="mso-bidi-font-weight: normal;">Merck & Co. Inc.</b>, <b style="mso-bidi-font-weight: normal;">Forest Laboratories
Inc.</b>, <b style="mso-bidi-font-weight: normal;">Novartis AG</b>, and <b style="mso-bidi-font-weight: normal;">Pfizer Inc.</b>, among others, were nowhere
to be found among buyers. Those that did surface didn’t make huge waves. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet/75/48/Algeta-Aspiring-For-Solo-Success-Draws-Bayer-Bid-After-Xofigo-Launch?result=7&total=130&searchquery=%253fq%253dalgeta">Bayer AG’s $2.4 billion proposed acquisition of its Xofigo (radium-223 dichloride) partner Algeta ASA</a> in December consolidates
ownership of a potential blockbuster; <span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">AstraZeneca PLC</b>’s smaller acquisitions
of fish-oil specialist Omthera and respiratory company Pearl Therapeutics were
so-called ‘bolt-ons’ that added near-market but me-too products to its
portfolio. </div>
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About 10% of acquisitions, or nine, involved rare disease
companies. In one of the year’s biggest deals,<a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/11/11/Shire-Buying-ViroPharma-To-Create-Leading-Rare-Disease-Group?result=10&total=373&searchquery=%253fq%253dviropharma"> Shire PLC announced in November that it is buying rare disease company</a> <b style="mso-bidi-font-weight: normal;">ViroPharma Inc.</b> for $3.3
billion on ambitions of becoming a leading rare disease player. In January, Shire also <a href="http://www.elsevierbi.com/deals/201310161?result=7&total=92&searchquery=%253fq%253dLotus%252520Tissue%252520Repair">acquired LotusTissue Repair,</a> which focuses on wound care and dermatology, for $49.3 million
upfront and another $275 million in potential earnouts.<i>--Wendy Diller</i><br />
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<i>Credit to <a href="http://paxsims.wordpress.com/">the PAXsims blog</a> by Rex Brynen for the image </i></div>
<div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Wendy Dillerhttp://www.blogger.com/profile/03585826601777354053noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-32498385283194958772013-12-24T07:45:00.001-05:002013-12-24T07:45:04.413-05:00Three Polls, One Page: Vote for IVBs Deals of the YearWe've set up a <a href="http://pages.elsevierbi.net/DOTY/2013/">single page</a> where you can vote on <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-m-of-year-are.html">M&A</a>, <a href="http://www.blogger.com/blogger.g?blogID=36634196#editor/target=post;postID=4272270948918161671;onPublishedMenu=allposts;onClosedMenu=allposts;postNum=2;src=link">Financing</a>, and <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-alliance-of.html">Alliance</a> of the Year. Polls open til January 7. Good luck to the nominees! VOTE <a href="http://pages.elsevierbi.net/DOTY/2013/">HERE</a>.<br />
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<br /><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-6353206038242298472013-12-23T14:38:00.001-05:002013-12-23T14:39:22.495-05:00And the Nominees for IVB's 2013 M&A of the Year Are ...<i>We've nominated five 2013 Deals for M&A of the Year. It's time for you, esteemed readers of The In Vivo Blog, to decide the winner. It's an eclectic bunch this year -- we can't wait to see what you'll choose. Our polls will stay open through the New Year, until Noon ET on Tuesday, January 7. Good luck to the nominees!</i> VOTE BELOW! IF YOU ARE VIEWING VIA EMAIL AND CAN'T SEE THE POLL, <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-m-of-year-are.html">CLICK HERE</a>.<br />
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<b>Valeant/B&L</b>:<i> The May 2013 deal was a big win for private equity owners Warburg Pincus. It put some extra shine on the reputation of then-B&L CEO Brent Saunders, who has moved on to Forest to work his Hassanian brand of turnaround-magic in the world of primary care. And it again highlighted ophthalmology -- and B&L's diversified pharma/device/consumer approach to the field -- as an industry hotspot. But the main reason we've nominated Valeant/B&L for the M&A Roger this year is that it underscores the increased activity on the big deal front of specialty pharma over its supposedly deeper pocketed Big Pharma rivals. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-m-of-year-nominee-valeantb.html">here</a>.</i><br />
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<b>McKesson/Celesio</b>: <i>McKesson’s purchase of German drug wholesaler Celesio for $8.3 billion is one of the largest deals of 2013, but that is not what puts it on the In Vivo Blog Deal of the Year map. More to the point, and the reason it should be on the radar of everyone in the biopharma industry, is its likely impact on pharma and the drivers that led it to consolidate in the first place. Although the deal focuses on distribution and supply chain management, some of the duller aspects of an industry prone to flaunt its contribution to saving lives, it is every bit just as important to pharma’s health as the next big deal in cancer immunotherapy. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-m-of-year-nominee-mckesson-celesio.html">here</a>.</i><br />
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<b>Biogen/Elan's Half of Tysabri</b>: <i>Elan’s move to sell its share of Tysabri (natalizumab) to long-time partner Biogen Idec was the ball that set the Rube Goldberg device in motion, precipitating its endgame and eventual sale to Perrigo, and landing it on the 2013 shortlist for M&A deal of the year. Ultimately, this sale gave Elan the thing it needed to become appealing to virtually any acquirer – lots of cash. Tysabri fits right into Biogen’s sweet spot; alongside Avonex (interferon beta-1a) and Tecfidera (dimethyl fumerate) Biogen's locked down about 40% of the total MS market. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-m-deal-of-year-nominee-biogen.html">here</a>. </i><br />
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<b>Amgen/Onyx</b>: <i>Onyx serves as a leg up for Amgen as it looks to establish itself as a major oncology innovator and bring forward a pipeline of oncology drugs it has cobbled together partly through acquisitions. Despite the possibility of drama, the deal wound up as a straightforward acquisition that hedges risk for the buyer and still rewards the seller, one where the purchase price, at $125 per share, meets a middle ground. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-m-of-year-nominee-amgenonyx_12.html">here</a>.</i><br />
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<b>The Ibrutinib Royalty</b>: <i>Royalty deals have long been the provenance of more conservative private-equity vehicles. And so it was odd not just to see two venture firms join the royalty deal but also to hear how much each was putting up. Aisling Capital and Clarus Ventures said in August they had paid $48.5 million to acquire a tiny slice of sales royalties from ibrutinib, a cancer drug that hadn't been approved yet. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee_18.html">here</a>.</i> <br />
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<noscript><a href="http://polldaddy.com/poll/7668548/">IVB's 2013 M&A of the Year Is ...</a></noscript><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-42722709489181616712013-12-23T14:37:00.002-05:002013-12-23T14:38:19.377-05:00And The Nominees for IVB's 2013 Financing of the Year Are ...<i>We've nominated six 2013 deals for Financing of the Year. It's time for you, esteemed readers of The In Vivo Blog, to decide the winner. From Series A to IPO, from twinkle-in-the-eye science to Phase III drug candidate, we've got it all. Our polls will stay open through the New Year, until Noon ET on Tuesday, January 7. Good luck to the nominees!</i> VOTE BELOW! IF YOU ARE VIEWING VIA EMAIL AND CAN'T SEE THE POLL, <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-financing-of.html">CLICK HERE</a>.<br />
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<b>Ophthotech's IPO</b>: <i>In a year filled with impressive public market debuts when public market debuts of biotechs were one of *the* top stories, Ophthotech's IPO hauled in $192 million and rightfully sits atop a heap of newly public biotech offerings. And Ophthotech might need every bit of that cash, and maybe more, for an ambitious Phase III program. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee.html">here</a>.</i><br />
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<b>Editas' Series A</b>: <i>Polaris, Third Rock, and Flagship more often than not will work in stealth on new potential breakthrough technologies on their own. Not the case with Editas, where the trio have teamed up to turn one of the hottest research tools around into a new wave of therapeutics. One might call it gene therapy, version 2.0: the technology known as CRISPR/Cas9 allows researchers working with cells or model organisms to delete genes or replace them with new ones, but in ways considered more precise than other gene-editing systems currently in use. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-deals-of-year-financing-nominee.html">here</a>.</i><br />
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<b>Google backs Calico</b>: <i>Just Google, Art Levinson, and a small handful of drug discovery and development luminaries getting together to combat diseases of aging. Anyone else out there planning to 'solve death'? Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee-calico.html">here</a>.</i><br />
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<b>CHOP backs Spark Therapeutics</b>: <i>Spark sprung nearly fully formed (with a Phase III asset) from CHOP this year, with $50 million in funding. That's enough to carry its lead program to market, a gene therapy for an inherited form of blindness. In doing so it is riding a wave of recent high-profile investment in gene therapy. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee-chop.html">here</a>.</i><br />
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<b>Juno Therapeutics' Series A</b>: <i>Juno unites researchers from three different institutions: Fred Hutchinson Cancer Center and the Seattle Children’s Research Institute in Seattle, and Memorial Sloan-Kettering Cancer Center in New York to pursue multiple avenues of cancer immunotherapy, and its $120 million Series A instantly sets the Seattle-based company up to become a major player in the rapidly evolving sector. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee-juno.html">here</a>.</i><br />
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<b>GSK/Avalon Ventures</b>: <i>Pharma needs innovative pipeline candidates. VCs need faster, cheaper and easier exits. The partnership between Avalon Ventures and GlaxoSmithKline aims to accomplish both. The model sees up to $30 million from Avalon and up to $465 million from GSK come together to fund up to 10 new companies, each built around a single drug candidate. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-financing-of-year-nominee_17.html">here</a>.</i><br />
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<noscript><a href="http://polldaddy.com/poll/7668535/">IVB's 2013 Financing of the Year Is ...</a></noscript><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-80602239271684226172013-12-23T14:36:00.000-05:002013-12-23T14:37:00.058-05:00And the Nominees for IVB's 2013 Alliance of the Year Are ...<i>We've nominated five 2013 deals for Alliance of the Year. It's time for you, esteemed readers of The In Vivo Blog, to decide the winner. From medication adherence to geographic diversity to hot new technologies, there's something for everyone. Our polls will stay open through the New Year, until Noon ET on Tuesday, January 7. Good luck to the nominees! </i>VOTE BELOW! IF YOU ARE VIEWING VIA EMAIL AND CAN'T SEE THE POLL, <a href="http://invivoblog.blogspot.com/2013/12/and-nominees-for-ivbs-2013-alliance-of.html">CLICK HERE</a>.<br />
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<b>GSK/Community Care of North Carolina</b>: <i>The deal may seem like a small marketing alliance between a big pharma company and a local provider of health care services in the medication adherence arena. But in reality it is much, much more. The alliance tackles critical challenges that are clearly on top of executives’ minds, in pharma and elsewhere in the health care system. Given the difficulties of closing deals between a pharma company and non-traditional commercial partners, notably like providers or payers, GSK certainly has pulled off a coup.Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee-gsk.html">here</a>. </i><br />
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<b>Celgene/Oncomed</b>: <i>The deal once again put Celgene at the forefront of early-stage oncology dealmaking and added to the already impressive smorgasbord of drug candidates and technologies to which it holds rights or options. This is not to say the complicated deal with OncoMed was business as usual, for it was one of the most complicated agreements of the year in biopharmaceuticals, necessitating a term sheet that might have resembled a Rube Goldberg machine, and quite lucrative for OncoMed -- potentially very lucrative. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee_19.html">here</a>.</i><br />
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<b>Amgen/Astellas</b>: <i>In announcing a strategic alliance with Astellas Pharma in May, Amgen has placed an economic bet on Japan. It is also, indirectly, a bet on economic recovery in the U.S. and Europe, Japan’s two biggest export markets. The partners will co-develop and co-commercialize five Amgen drugs for the Japanese market, as well as establish a joint venture that is 51% owned by Amgen, opened in Tokyo in October. Operating as Amgen Astellas BioPharma KK, the JV is structured to allow Amgen to turn the operation into a wholly-owned Japanese affiliate as early as 2020, and a direct channel into Japan for any molecule in its portfolio including its six biosimilars in development.Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee_17.html">here</a>.</i><br />
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<b>Roche/Polyphor</b>: <i>Roche has given notice that it’s back in the antimicrobials space. For the first time in 30 years. Roche and Polyphor believe the timing of their alliance is good. Others have cut back, including onetime leader Pfizer, which closed its antibiotic R&D center in Connecticut in 2011, as well as Bristol-Myers Squibb Co. and Eli Lilly & Co., leaving only a few players, such as AstraZeneca, GlaxoSmithKline and Merck & Co. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee_13.html">here</a>.</i><br />
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<b>AstraZeneca/Moderna</b>: <i>Shortly after unveiling a revised R&D strategy and organizational restructuring, AstraZeneca made a massive bet on an early-stage platform that suggested the big pharma has taken to heart new CEO Pascal Soriot’s directive to be more willing to embrace risk. The deal boasts $240 million upfront from AstraZeneca to privately held Moderna Therapeutics and is unusually broad-based, carrying options for up to 40 programs in different therapeutic areas using the biotech's messenger RNA (mRNA) technology. Read the full nomination <a href="http://invivoblog.blogspot.com/2013/12/2013-alliance-of-year-nominee.html">here</a>.</i><br />
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<noscript><a href="http://polldaddy.com/poll/7668560/">IVB's 2013 Alliance of the Year Is ...</a></noscript><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-43593256410652126102013-12-23T11:12:00.000-05:002013-12-23T11:12:38.568-05:002013 M&A of the Year Nominee: Valeant/B&L<i>It's time for the IN VIVO Blog's </i>Sixth<i> Annual Deal of the Year! competition. This year we're once again presenting awards in three categories to highlight the most interesting and creative deal making solutions of the year. The categories are: M&A of the Year, Alliance of the Year, and Financing of the Year. We'll supply the nominations (about a half dozen in each category throughout over the next week or so) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.</i><br />
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Valeant Pharmaceuticals -- the seemingly insatiable embodiment of growth-by-acquisition in modern pharmaceutical times -- has been party to more than a dozen significant M&A deals since acquiring Biovail in 2011. Its biggest move in 2013, earning an M&A-of-the-year nod from us, is the <a href="http://www.bausch.com/our-company/recent-news/2013-archive/valeant-pharmaceuticals-international-inc-to-acquire-bausch-lomb/">$8.7 billion takeover of ophthalmology specialist Bausch & Lomb</a>.<br />
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The May 2013 deal was a big win for private equity owners Warburg Pincus. It put some extra shine on the reputation of then-B&L CEO Brent Saunders, who has moved on to Forest to work his Hassanian brand of turnaround-magic in the world of primary care. And it again highlighted ophthalmology -- and B&L's diversified pharma/device/consumer approach to the field -- as an industry hotspot.<br />
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But the main reason we've nominated Valeant/B&L for the M&A Roger this year is that it underscores the increased activity on the big deal front of specialty pharma over its supposedly deeper pocketed Big Pharma rivals. In fact a look at the top biopharma deals by dollar value this year suggests none of the 'big' deals -- the recent exception of BMS selling its stake in its diabetes JV to AZ notwithstanding -- were Big Pharma deals.<br />
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Warner Chilcott went to Actavis for $8.1 billion. Shire bought ViroPharma for $3.3 billion. Onyx went to Amgen (OK we're splitting hairs there, but we'll call Amgen a 'big biotech'). The remains of Elan went to Perrigo. Big Pharma -- its stated penchant for bolt-ons be damned -- bolted on very little of substance this year. On the other hand, Spec Pharma <a href="http://www.elsevierbi.com/Publications/IN-VIVO/31/6/Biopharma-MampA-In-An-Era-Of-Elusive-Growth-Capital-Triage-and-New-Competitors">has the firepower</a>, as our friends at Ernst & Young reminded us this year. And it is using it.<br />
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<iframe allowfullscreen="" frameborder="0" height="375" msallowfullscreen="" oallowfullscreen="" src="http://www.flickr.com/photos/98091397@N00/4069840148/in/photolist-7cCZFJ-68vX3t-bxRJ5Q-6y5Prg-7DnSB-5ow5xK-ged9P4-8YKkJn-8hGitG-9aKS8u-bmaBxw-bz5uGt-bAe1Bk-xKm2f-4QBSZT-mUbeK-6Jcrqu-tL6ZW-28tLbQ-c45meq-8fhJkB-4T6Ehn-fSEPh-524DFV-bxzpsJ-5CxsfT-wsYxS-bSWvKB-4LnVTL-hpCJmu-hpC9u3-4nqHbz-5ZC2zB-6Uyaj4-dbW9xs-bDdWFz-bDdVjM-f6oLfj-5XDnQG-cZGSJJ-8Hdama-8HghHY-ipTM34-iiTgRe-3i21dM-iihJyR-soYDV-soYvZ-5gmJ7e-9wSnDZ-dwo4QQ/player/" webkitallowfullscreen="" width="500"></iframe><br />
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Valeant in particular has been using it to diversify. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2013/5/28/Eye-On-The-Prize-For-87-Billion-Valeant-Will-Acquire-Bausch-amp-Lomb">At the time of the deal</a>, CEO Michael Pearson said Valeant has made no secret of its interest in durable specialty sectors with low R&D risk such as eye care and dermatology (last year's big buy was derm specialist Medicis, for $2.8 billion). Acquiring B&L will enable Valeant to balance its revenue mix from both a geographic and therapeutic perspective, he added. Post-B&L, about 50% of Valeant revenue stems from the U.S., with Eastern and Central Europe comprising 15%, Western Europe and Japan 13%, and Latin America, Canada, Australia, Southeast Asia and South Africa rounding out sales.<br />
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In terms of therapeutic areas, dermatology and aesthetics contributes about 34%, eye health about 32%, neurology and “other” about 12%, and consumer and oral health about 11%, the CEO said. (Consumer businesses are absolutely on Valeant's radar since adding B&L's consumer brands, <a href="http://www.elsevierbi.com/Publications/The-Tan-Sheet/21/45/Valeant-Keeps-Door-Open-For-Consumer-Products-Acquisitions">the company has said more recently.</a>)<br />
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So vote Valeant for its personification of specialty pharma's growth ambitions, particularly in comparison to Big Pharma's 'hey everybody let's get small' religion. For the way it represents the shifting firepower available for the big deals (buybacks and dividend hikes aren't free -- and that's where a lot Big Pharma's money has gone over the past few years). And for its kid-in-a-candy-store, shopping-spree approach to building a large, specialist pharma player: think of it as a vote not just for Valeant/B&L, but for Valeant/Solta, Valeant/Obagi, Valeant/Medicis, and all the rest and what's to come.<br />
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<i>Artillery photo via flickr/Paul Campy // cc </i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Chris Morrisonhttp://www.blogger.com/profile/04075266444951558159noreply@blogger.com0tag:blogger.com,1999:blog-36634196.post-67395519699836266582013-12-23T07:25:00.000-05:002013-12-23T07:25:56.592-05:002013 M&A Of The Year Nominee: McKesson/ Celesio<i>It's time for the IN VIVO Blog's </i>Sixth<i> Annual Deal of the Year! competition. This year we're once again presenting awards in three categories to highlight the most interesting and creative deal making solutions of the year. The categories are: M&A of the Year, Alliance of the Year, and Financing of the Year. We'll supply the nominations (about a half dozen in each category throughout over the next week or so) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.</i><br />
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<div class="separator" style="clear: both; text-align: center;">
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<a href="http://www.elsevierbi.com/publications/the-pink-sheet-daily/2013/10/24/mckessoncelesio-deal-targets-generics-purchasing-synergies">McKesson’s purchase of German drug wholesaler Celesio for $8.3 billion </a>is one of the largest deals of 2013, but that is not what puts it on the In Vivo Blog <i>Deal of the Year</i> map. More to the point, and the reason it should be on the radar of everyone in the biopharma industry, is its likely impact on pharma and the drivers that led it to consolidate in the first place.<br />
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Although the deal focuses on distribution and supply chain management, some of the duller aspects of an industry prone to flaunt its contribution to saving lives, it is every bit just as important to pharma’s health as the next big deal in cancer immunotherapy.<br />
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<iframe 0="" allowfullscreen="" height="300" mozallowfullscreen="" msallowfullscreen="" oallowfullscreen="" src="http://www.flickr.com/photos/85853333@N00/4952761917/in/photolist-8xEcyR-avdTCD-5TsqAp-niYyT-aAJHJo-4sbDF4-4vvfbX-6PTKzG-6PPJZz-6PPFKK-6PTVsj-6PTXX3-7Keu7c-5JRGYH-5JRGeg-5JRGMx-5JVYLb-5JRGkp-5JRGSM-5JVYEU-5JRG6k-5JRGBP-6mEyGm-7ba6z7-5LX9WF-3Vroq-aDHUJH-aDHSV6-aDMJsQ-aDMNsw-aDHTF4-aF1GpJ-aF1FoQ-aEWToa-aF1HoS-aEWPrz-aBMNrh-cPAZFY-cPAYUQ-cPB1nC-aBMuk9-aBMH5d-aBK9JH-aBMuQC-aBMz1u-aBMxvo-aBMQKw-aBMuzj-aBMN4C-aBMvXE-aBK2kc/player/" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;" webkitallowfullscreen="" width="300"></iframe>Logistics, scale and geographic reach are increasingly critical competitive advantages as unprecedented pressures put margins under the microscope, and R&D productivity is too inconsistent to provide protection. In short, the onus is on industry to become more financially efficient. Germany-based Celesio is a leader in pharmaceutical wholesaling, with a presence in key markets in Europe and Brazil and an extensive network of several thousand retail pharmacies in those regions. McKesson is one of the world’s largest wholesalers, with a particularly strong presence in the United States, and $122 billion in annual sales. The combined company will have sales of more than $150 billion, and employ more than 81,500 workers worldwide. How's that for efficient positioning? </div>
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Quickly, the deets: McKesson is to acquire 50.01% of Celesio’s stock for €23 per share in cash from the Haneil group and acquire the rest of remaining publicly traded shares and convertible bonds through a parallel tender offer. Among other benefits, the deal will enable McKesson to recognize synergies of $275 million to $325 million by the fourth year. It will be accretive from Year One, which, because of certain German takeover laws, is likely to be fiscal year 2015, which begins April 1, 2014.<br />
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Upon completing the deal, McKesson should have the scale to provide its customers with a more efficient global supply chain and, as McKesson’s executives repeatedly have noted, global sourcing, as well as additional business services. The aim is to be a “one-stop shop for people to create global partnerships,” McKesson CEO John Hammergren told analysts on the day of the announcement in October. In pharma, the most obvious impact will therefore be on generic drug sourcing and distribution, since McKesson’s leverage over which generic version of a drug it distributes to customers will increase. Wholesalers do not have nearly as much control over brand pricing.<br />
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McKesson says it ranks number one in generic drug distribution in the U.S. The deal is the biggest and broadest of several initiated this year by drug wholesalers looking for more efficient ways of distributing and negotiating with generics suppliers. The trend started late last year, when the U.K’s <a href="http://www.elsevierbi.com/deals/201320133">Alliance Boots GMBH, Walgreen Co., </a>and the U.S. wholesaler AmerisourceBergen Corp. struck a three-way partnership around cooperative purchasing of generic drugs. <a href="http://www.elsevierbi.com/Publications/The-Pink-Sheet-Daily/2012/6/19/Walgreens-Grows-Internationally-With-Alliance-Boots-Stake?result=1&total=1&searchquery=%253fq%253d14120619004">Walgreen already owns 45% of AllianceBoots</a> and has an option to buy the rest of the company over the next three years; these two companies have an option to purchase up to 23% of AmerisourceBergen.<br />
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And the expanded network of retail pharmacies also is important in an era in which the pharmacy, both in the U.S. and abroad, is not just dispensing medicine, but also becoming more of a care provider as a lower-cost alternative to the emergency room or other providers. That may seem peripheral to business development priorities of innovative drug makers right now, but such an impression is misguided. Just ask vaccine producers and makers of diabetes drugs.<br />
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<i>thanks to flickr user Jeremy Brooks for McKesson photo // cc</i><div class="blogger-post-footer">Copyright © 2014 Informa Business Information, Inc., an Informa Company. All rights reserved. <a href="http://www.pharmamedtechbi.com">www.pharmamedtechbi.com</a></div>Wendy Dillerhttp://www.blogger.com/profile/03585826601777354053noreply@blogger.com0