Happy Thanksgiving from Deals of the Week!

This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why the post is called Deals of the Week ... (cont.)

As always, thanks for reading. Happy Thanksgiving!

Bayer/Algeta: Not quite a deal just yet, but we give thanks for the heads up this slow holiday week: On Nov 25 details began trickling out about Bayer's NOK14.8 billion ($2.4 billion) bid to buy Xofigo partner Algeta. The companies have high hopes for Xofigo, the recently launched prostate cancer therapy, and it's unsurprising that Bayer might move to control 100% of the potential blockbuster. The NOK336 per-share bid represents a 27% premium to Algeta's price before the brouhaha. Analysts expect Bayer to sweeten the bid for the Norwegian biotech -- of course they do! -- with which it has been partnered since 2009. For now, neither company is talking (someone's leaking, of course, but talking? Not so much). Not about the potential and probable deal anyway. Algeta's been out talking to analysts and investors during its recent Capital Markets days, pointing out its technological prowess and pipeline of assets beyond Xofigo. All that chatter might be helpful especially if Bayer decides it only wants Xofigo (sometimes the Bayer gets only part of you? Sorry). We'll have more in next week's issue of "The Pink Sheet". -- CM

Merrimack/Actavis: Merrimack Pharmaceuticals’ stock got a boost Nov. 26 from back-to-back announcements including encouraging Phase II data on one of its lead cancer drugs, the HER3 blocker MM-121, and a drug delivery technology deal with Actavis Inc. The stock closed the day up about 11% at $3.50, though that's only half what it debuted at in March 2012. Still that's some trick, considering one of the announcements was for a trial that didn't meet its primary endpoint. Most of the bump probably came from that Phase II data, which only trended in favor of MM-121 in patients with ER/PR+ and HER2- breast cancer, but suggested even better results in a subpopulation of patients with an undisclosed biomarker. That asset is partnered with Sanofi, which has seen its share of bad luck in its oncology pipeline lately, so the silver lining is particularly welcome. Meanwhile, the deal with Dublin-based Actavis offers revenue upside, the company said. Under the arrangement, Actavis will pay the cancer specialist $2 million upfront. In exchange, Merrimack will use its nanoliposomal technology platform to develop and manufacture various drugs for Actavis. It already uses the technology in some of its own drug candidates. Merrimack is eligible to receive another $13.5 million in funding and milestone payments tied to development, regulatory and sales milestones related to the first product to come out of the collaboration. It will also receive a double-digit share of profits on future sales of any commercialized products. -- Jessica Merrill

Egalet/Shionogi: Egalet Corp. will get access to cash ahead of a planned IPO in a deal with Shionogi & Co. Ltd. announced Nov. 26. The Danish specialty pharma will receive $10 million upfront from Shionogi, which has also agreed to buy approximately $15 million in common stock in a private placement to close with the IPO. In exchange, Shionogi gets rights to multiple oral abuse-deterrent hydrocodone opiod product candidates in preclinical development. Egalet specializes in abuse-deterrent technology and has developed two drug delivery systems that can be applied to multiple drug candidates. The deal will give Egalet some cash and breathing room as it prepares for the IPO while still allowing the company to retain its priority assets, two abuse-deterrent formulations, one morphine and one oxycodone, both in clinical development. In its registration statement filed with the Securities and Exchange Commission Oct. 16, Egalet said it had just $3 million in cash. Egalet could also receive $300 million in development and regulatory milestone payments and tiered royalties on sales, as well as $100 million in sales-based milestones. For Shionogi, the deal builds on the company’s existing presence in pain. The company manufactures the hydrocodone product Xodol, the oxycodone product Magnacet and several other pain therapeutics it acquired from Victory Pharma Inc. in 2011. On Nov. 19, Shionogi announced a licensing deal with Mundipharma International Ltd. under which Shionogi would sell Oxycontin Neo tablets, a tamper-resistant version of oxycodone, and an oxycodone/naloxone combination product in Japan. -- JM

SillaJen/Jennerex: The Korean CRO SillaJen is buying the cancer vaccine company Jennerex for up to $150 million (no specifics on the breakdown of payments have been disclosed). News of the deal came Tuesday from the french biotech Transgene, which is both a Jennerex shareholder as well as its partner in development Jennerex's lead vaccine Pexa-Vec, which did not meet its primary endpoint in a Phase IIb study in advanced liver cancer earlier this year. Transgene said that the companies' Pexa-Vec development and commercialization deal will "remain intact," with SillaJen taking over Jennerex's end of the bargain, and the companies plan to continue development of the GM-CSF vaccine in multiple other indications. SillaJen has been a partner and "major investor" in Jennerex since 2006, according to the latter company's web site.  -- CM

Myriad Genetics/Crescendo Bioscience: On Tuesday, Myriad Genetics expressed its desire to merge with fellow molecular diagnostics maker Crescendo Bioscience, under a three-year option it obtained as part of a $25 strategic debt investment in Crescendo in 2011. (We wrote then about how the deal strengthened Myriad’s expertise in protein-based testing and would potentially help diversify its revenues beyond oncology [Crescendo launched its Vectra DA rheumatoid arthritis test in November 2010].) The move by Myriad, which is subject to completion of due diligence, was triggered by Crescendo’s having reached a minimum revenue milestone set under the 2011 agreement: as noted in a November 27 Myriad 8-K filing, the purchase price will be based on a multiple of revenue determined by the revenue growth rate of Crescendo at the time of option exercise. If Myriad ultimately declines the option, Crescendo might opt for an initial public offering, an event that would allow Myriad to convert the debt to equity at the IPO price. An IPO would be tempting given the recent IPOs of several standout molecular diagnostics firms including Veracyte and Nanostring. -- Mark Ratner

Deals of the Week Lovingly Massacrees the Classics

This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why I called the post Deals of the Week.

Now it all started four Thanksgivings ago; it was four years ago on Thanksgiving, when Chris Morrison and I started writin' a blog about deals, but not every day, just once a week. And writin' about deals once a week, you know it's a lot of work. (Hint. Hint.)

And there's a lot of garbage you gotta sift through, but we decided it would be a friendly gesture on behalf of readers. So we trolled around the Internet with our shovels and rakes and other implements of destruction (a.k.a. EBI's Strategic Transactions database) looking for deals to analyze. But then a big bad editor (also known as Officer Roger) said why are you doin' that? We are closed on Thanksgiving.

And we had never heard of a blog closed on Thanksgiving before (we don't get out much) so with tears in our eyes we drove off into the sunset looking for another place to dump our garbage -- I mean our deals.

We didn't find one. So we wrote our post anyway, went back and had a Thanksgiving Day that couldn't be beat, went to sleep, and didn't get up until the next morning when we got a call from Officer Roger... And it's been a recurring feature here at IVB ever since.

But fortunately, not another case of American blind justice since we always arrive at the truth of the matter and it doesn't even require 27 eight-by-ten color glossy pictures with circles and arrows and a paragraph on the back of each one.

In honor of the day, we hope you consider joining the IN VIVO Blog Movement. All you've got to do is walk into the office wherever you are, just walk in and say ,"You can get anything you want at IN VIVO Blog." And walk out.

You know if one person, just one person does it, they might think he's really sick and they won't take him... And can you, can you imagine fifty people a day, I said fifty people a day (okay, we'd really like 1000) walking in, quoting a line from IN VIVO Blog and walking out?

And friends, they might think its a movement. And that's what it is, the IN VIVO Blog Movement.

Remember Deals of the Week? (This is a post about Deals of the Week.)

Without further ado, we bring you this week's installment. Feel free to sing along in four-part harmony. With feeling. Cuz'...

You can get anything you want at IN VIVO Blog.
You can get anything you want at IN VIVO Blog.
Log right in, it's a click away.
Just a finger tap. You don't have to pay.
You can get anything you want at IN VIVO Blog. (Excepting Roger.)

Alice parody by Ellen Licking, Arlo Guthrie's original here (or catch it on Thursday -- we'll be listening to WMMR at 2p). Happy Thanksgiving from EBI's IN VIVO Blog.




Algeta/Ablynx: Ablynx and Algeta hope that by linking their cutting-edge technologies in a joint feasibility study they can make a quantum leap in cancer therapy innovation. Their 12-month “targeted radiotherapy” project entails Ablynx generating a nanobody that will deliver Algeta’s alpha-particle emitting radio therapeutic thorium-227 against an undisclosed cancer target. Algeta will also provide the linker technology for the conjugate. Financial terms were not disclosed. Ablynx’s nanobody will deliver the thorium radiotherapeutic payload to a cancer cell, where the high energy of the alpha particle emitted by the attached thorium would kill the tumor tissue at a distance of a few cell diameters while sparing the remaining body. The therapeutic principle is akin to that of antibody-drug conjugates, such as Roche’s T-DM1, where a chemotherapeutic is selectively targeted to cancer cells to kill the malignant cell while sparing healthy tissues.--Sten Stovall

Pfizer/Cystic Fibrosis Foundation: Following up on the January approval of Vertex Pharmaceuticals Inc.’s Kalydeco (ivacaftor), the first drug to address the underlying cause of cystic fibrosis, Pfizer Inc. and the Cystic Fibrosis Foundation are teaming up in a $58 million, six-year extension of an existing R&D alliance to bring additional root-cause-focused drugs into clinical development for cystic fibrosis. Maryland-based CFF is partnered with multiple companies, including Vertex and Genzyme Corp., to help fund CF drug development. CFF President and CEO Ronald Beall says the foundation will invest about $114 million in medical science efforts in 2013, with about $80 million of that going to support drug-discovery and development. Pfizer’s work in CF stems from its 2010 acquisition of FoldRx Pharmaceuticals Inc., a biotech that focused on developing oral therapeutics for protein-misfolding-related conditions. That buyout was part of the world’s largest pharma’s move into drugs for orphan and rare diseases. The goal of the Pfizer/CFF agreement, announced Nov. 19, is to bring one or more drug candidates addressing mutations of the Delta F508 protein, a misfolding defect implicated in roughly 90% of CF cases, into the clinic.--Joseph Haas

Paladin Labs/Ativa Pharma: Montreal-based Paladin Labs is expanding its Mexican operations with the acquisition of Guadalajara-based Ativa Pharma. The deal, announced Nov. 19, will give the specialty pharmaceutical company an established distribution network in the country and an existing team that is familiar with the Mexican regulatory authorities. Paladin estimates that the Mexican pharmaceutical market could be worth $8.1 billion. The company will be introducing several of its own products to the market, including Travelan, a traveller’s diarrhea prevention; Abstral for breakthrough cancer pain; and Tostran for hypogonadism. The company will also seek approval for several compounds already in Ativa’s pipeline. Paladin expects that the first regulatory approvals and commercial launches will begin in the second half of 2013. The company would not reveal any financial details pertaining to the acquisition.--Lisa LaMotta

Shire/Boston Children’s Hospital: Shire PLC is expanding its presence in rare diseases, an area that already makes up about one-third of the company’s business, through a collaboration with the Boston Children’s Hospital. Announced Nov. 20, the three-year agreement will focus on developing treatments for pediatric diseases with high unmet medical needs. The partnership will leverage Shire’s commercial expertise in the area, as well as Boston Children’s Hospital’s understanding of pediatric disease and its clinical network. In exchange for an option to license any products that emerge from the collaboration, Shire will make an undisclosed upfront payment to fund specific programs. The Hospital will receive milestone payments and royalties upon commercialization of any products.--Lisa LaMotta

NeuroVive/Sihuan: The importance of China as a growing market for pharmaceuticals was underscored Nov. 20 when NeuroVive, a tiny Swedish biotech, forged its first product development agreement, with Sihuan Pharmaceutical Holdings, one of the largest domestic pharmaceutical companies in China. The deal also is the first Sihuan has entered into with a non-Chinese pharmaceutical company. Sihuan will conduct clinical trials in China on NeuroVive's two investigational tissue repair products, CicloMulsion and NeuroSTAT, which have potential in the treatment of acute cardiovascular and neurological conditions, respectively. CicloMulsion, a formulation of cyclosporine A found in initial studies to protect mitochondria from destruction during trauma, is in a Phase II/III study in Europe, and NeuroSTAT, another cyclosporine A formulation, is about to start a Phase IIa study. Sihuan is paying just $7.5 million in upfront and milestone payments initially, reflecting Sihuan's funding of the Chinese development work and its pioneering nature, but will pay a 10% royalty on any sales. At the same time, the alliance will go some way to validate NeuroVive's research focus on mitochondrial medicine. The Chinese market for acute cardiovascular and neurological conditions is currently worth around RMB 2 billion ($321 million) annually.--John Davis

Wright Medical/BioMimetic: Wright Medical Group gains a near-term commercial opportunity in regenerative medicines with the acquisition of BioMimetic Therapeutics Inc. for what could amount to $380 million. Under the deal announced Nov. 19, Wright Medical will pay $190 million down in cash and stock, plus up to $190 million more in milestone payments. BioMimetic’s key product is the Augment bone graft, which is under review by FDA as a replacement for autologous bone graft in foot and ankle fusion procedures. The product could receive PMA approval “between late April next year and … the end of the year,” Wright Medical CEO Robert Palmisano said during a Nov. 19 analyst call announcing the deal. Wright is obviously confident in the approvability of Augment, despite FDA’s initial “not approvable” determination in January. BioMimetic submitted a PMA amendment in June responding to questions raised by the agency. FDA’s Orthopaedic and Rehabilitation Devices advisory panel had narrowly supported approval at a May 2011 meeting. Augment is a synthetic alternative to autologous bone graft, made of recombinant human platelet-derived growth factor (rhPDGF-BB) and beta-tricalcium phosphate (β-TCP) granules, which form a scaffold to support cell attachment. The two components are mixed during surgery and applied directly to the surgical site during open orthopedic procedures. Besides Augment, BioMimetic also markets its Augmatrix biocomposite bone graft substitute line of products for orthopedic indications. -- Sue Darcy 

BASF/Pronova BioPharma: German chemical firm BASF casts a voluntary cash offer of NOK4.845 million ($846 million) to hook omega-3 fatty acid maker Pronova BioPharma ASA on Nov. 21. While some Pronova investors were disappointed with the 24% premium offer of NOK12.5 per share, according to media reports, BASF said it already has irrevocable pre-acceptance commitments from shareholders representing approximately 60% of Pronova’s share capital. It needs at least 90% of the total shares for the deal to move forward, the firm says in a release. BASF says closure of the deal, which is expected in the first quarter of 2013, “immediately” would give BASF “a leading position in the global market for omega-3 fatty acids,” when combined with its prior acquisition of omega-3 fatty acid maker Equateq Ltd. The deal would give Pronova, which makes the omega-3 heart prescription drug Lovaza for GlaxoSmithKline PLC, enhanced manufacturing capabilities through BASF’s global platform and resources, the Norwegian firm says in a Nov. 21 release. The deal reflects industry’s growing interest in omega-3s, which also led to the recent acquisition by Royal DSM NV of Ocean Nutrition Canada Ltd. in May.--Elizabeth Crawford

Financings of the Fortnight Gives Thanks

You'll have to forgive your fortnightly columnist. Thanksgiving, our favorite holiday, always makes us a little maudlin. Too few people do what the holiday intends us to do: stop, smile, look at the faces around the table, and be thankful for what we have, wherever we are.

We won't be gnawing turkey legs with her tomorrow, so we want to give our thanks today to Ellen Licking, our friend and colleague, who is moving on to work for our former boss. (You can follow her odyssey tweet by tweet at @RealEndptsEllen when it goes live.)

Ellen has been one of many colleagues from whom we learn every day; we're thankful for those generous with their knowledge, and we're thankful for being able to write about an industry filled with folks who, once past the elevator pitch and into a more expansive mood, just might blow your mind. When we were young, Mama FOTF told us, "Try to learn something new every day." No better way than to be a journalist. Folks in our profession have many and various reasons for doing what they do, not all of them savory, but for us, being able to talk regularly with brilliant people working on fascinating, often intractable problems is a main reason we get out of bed in the morning. (Oatmeal with walnuts and brown sugar is another.) We're also thankful that we can say, "I don't understand, please explain," and on the whole people are happy to do so.

We're thankful for a few days off, and to spend those days with family, which the people we write about sometimes don't have time to do. Please do so; as we all learned this week, life can play cruel tricks. We wish everyone a happy, healthy and safe Thanksgiving.

Agios Pharmaceuticals: Agios has plenty to be thankful for. Nowhere close to having a compound in the clinic, the Cambridge, Mass. firm closed a Series C financing on Nov. 17, bringing in $78 million to help fund new research in rare genetic disorders. Agios CEO David Schenkein said the money would help fund the company’s research for the next “three to four years” and that it will allow the pre-clinical company to bring “multiple programs into the clinic simultaneously.” The cancer metabolism firm was backed by previous investors Third Rock Ventures, ARCH Venture Partners, and Flagship Ventures, along with Celgene and three undisclosed public investment funds. Agios previously raised $33 million in a Series A and struck a lucrative deal with Celgene for its pre-clinical cancer metabolism research in April 2010. The deal included a $130 million upfront and gives Celgene the exclusive option to any products that result from the platform. The deal included a modest equity investment. Celgene extended the deal in October 2011, providing Agios with a $20 million payment and gaining further equity in the company. The new research program will focus on diseases caused by inborn errors in metabolism and will give Agios some distance from its partner, Celgene. The close relationship was exactly why Schenkein decided to gauge the interest from public investors and begin research in an area outside cancer metabolism. Prior to the recent round of financing and the new research platform, Agios was so closely tied to Celgene that it cut off any chance that it could be bought by another company. -- Lisa LaMotta

Idenix Pharmaceuticals: Now that Hepatitis C competitor Pharmasset has been snapped up for a stunning $11 billion by Gilead Sciences, Idenix is one of two firms remaining with unpartnered nucleotide polymerase inhibitors, or "nucs," in the clinic to treat HCV. The firm raised needed cash in a registered public offering of its stock Nov. 21, selling 9.4 million shares at $6.50 a piece, but its timing was unfortunate; since the Pharmasset news, Idenix shares have traded nearly a dollar higher (they're were at $7.45 in mid-day trading Nov. 23). The clinical-stage biotech, which is focused on developing oral, direct-acting antiviral drugs for Hepatitis C, lately has placed its bets mainly on Phase II nucleotide polymerase inhibitor IDX184. Even before the Pharmasset announcement, Wedbush Securities analyst Duane Nash wrote Nov. 15 that Idenix itself could be ripe for a merger or acquisition, as it and Inhibitex own the only unpartnered nucs in the clinic, and virtually every player in HCV believes such a compound will be part of the next HCV standard of care. Meanwhile, Idenix has suspended development of its other Phase II asset, IDX375, a non-nucleoside polymerase inhibitor, also for HCV. During its quarterly earnings call Nov. 2, the Cambridge, Mass. firm reported $64.7 million cash on hand as of Sept. 30 and a nine-month net loss of $33.9 million, attributable mainly to R&D spend. The biotech noted its net loss was $11.5 million lower than a year earlier, due in part to the shelving of ‘375. -- Joseph Haas

Oxyrane UK: In a bid to trump Shire and Genzyme at their own rare diseases game, British biotech Oxyrane on Nov. 17 pulled in $26.5 million in a D round led by Morningside Group, with participation from Forbion Capital Partners and existing investor New Science Ventures. The round hardly wins any records for size, but the idea’s nice: to create enzyme replacement therapies (ERT) for orphan diseases that are more effective, and cheaper and easier to manufacture, than current ERT drugs like Genzyme’s Cerezyme (imiglucerase). The funds will be used to advance a pre-clinical ERT candidate in Pompe’s disease, and to validate Oxyrane’s technology platform, which uses the Yarrowia lipolytica yeast to produce human lysosomal enzymes that are taken up faster by cells, and are more targeted, than existing commercially-available versions. Relatively simple batch production processes may also allow Oxyrane to scale up manufacturing so as to “dramatically alter” production economics, according to investors. It wasn’t just the prospect of cheaper ERTs that pulled investors in. Oxyrane’s technology could have far broader application, for instance, in more efficient antibody production. That opens the door to future partnering deals with companies looking for large-scale antibody production capability, or with those trying to create cheaper biosimilars. -- Melanie Senior

Portola Pharmaceuticals: It’s tough to partner an anticoagulant these days, thanks to an increasingly crowded market that already includes Bayer and Johnson & Johnson’s Xarelto (rivaroxaban) and Boehringer Ingelheim’s Pradaxa (dabigatran), and which may soon feature Bristol-Myers Squibb and Pfizer’s Eliquis (apixaban). Case in point: Astellas Pharma gave up on Phase II candidate darexaban in September after failing to find a partner. Portola Pharmaceuticals could have been in the same boat after its two-year arrangement with Merck concerning Factor Xa inhibitor betrixaban fell apart in March, but instead the eight-year-old company has turned to private investors yet again, securing $89 million in new Series D funding that will give it enough cash to launch a Phase III trial on its own. Portola will also bring a companion Factor Xa antidote into the clinic. The new money brings the total invested in the company to $306 million, not counting a $9 million equity investment from Biogen Idec last month in connection with a partnership for spleen tyrosine kinase inhibitors; the company also has received non-dilutive money from Novartis for its 2009 elinogel partnership, as well as $36 million from Biogen and Merck’s $50 million up-front payment from the since-scuttled deal. Eastern Capital of the Cayman Islands and Temasek Holdings of Singapore led Portola’s new round, which also included longtime VC backers Frazier Healthcare Ventures, Advanced Technology Ventures, Alta Partners, MPM Capital, Prospect Venture Partners, Clarus Ventures and Sutter Hill Ventures. -- Paul Bonanos


Photo courtesy of flickr user Sugar Daze via a Creative Commons license.

Deals of the Week, Arlo, Ellen, and Eleven Billion Reasons to Invest in Biotechs

No 'official' Deals of the Week post this week, but we wanted to drop in and wish all stateside and US expat IVB readers a Happy Thanksgiving. The rest of you too -- enjoy either a long, turkey-scented weekend or a couple of quiet days before Saturday.

We'll be back next week with the launch of this year's Deals of the Year competition. For now our only deal-related comment is this: Eleven Billion Dollars for a Phase II Biotech? Eleven Billion Dollars for a Phase II Biotech.

Meanwhile, enjoy IVB's take on an old classic. And join us in wishing well Ellen Licking, who's off for challenges anew and who among much else wrote the parody below that we dust off each Thanksgiving week. In Vivo magazine readers will continue to see her by-line now and then, but we'll miss her around the virtual office and in our small, hopefully sharp, and sometimes sarcastic corner of the internet. All the best. --CM
  This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why I called the post Deals of the Week.

Now it all started four Thanksgivings ago; it was four years ago on Thanksgiving, when Chris Morrison and I started writin' a blog about deals, but not every day, just once a week. And writin' about deals once a week, you know it's a lot of work. (Hint. Hint.)

And there's a lot of garbage you gotta sift through, but we decided it would be a friendly gesture on behalf of readers. So we trolled around the Internet with our shovels and rakes and other implements of destruction (a.k.a. EBI's Strategic Transactions database) looking for deals to analyze. But then a big bad editor (also known as Officer Roger) said why are you doin' that? We are closed on Thanksgiving.

And we had never heard of a blog closed on Thanksgiving before (we don't get out much) so with tears in our eyes we drove off into the sunset looking for another place to dump our garbage -- I mean our deals.

We didn't find one. So we wrote our post anyway, went back and had a Thanksgiving Day that couldn't be beat, went to sleep, and didn't get up until the next morning when we got a call from Officer Roger... And it's been a recurring feature here at IVB ever since.

But fortunately, not another case of American blind justice since we always arrive at the truth of the matter and it doesn't even require 27 eight-by-ten color glossy pictures with circles and arrows and a paragraph on the back of each one.

In honor of the day, we hope you consider joining the IN VIVO Blog Movement. All you've got to do is walk into the office wherever you are, just walk in and say ,"You can get anything you want at IN VIVO Blog." And walk out.

You know if one person, just one person does it, they might think he's really sick and they won't take him... And can you, can you imagine fifty people a day, I said fifty people a day (okay, we'd really like 1000) walking in, quoting a line from IN VIVO Blog and walking out?

And friends, they might think its a movement. And that's what it is, the IN VIVO Blog Movement.

Remember Deals of the Week? (This is a post about Deals of the Week.)

Without further ado, we bring you this week's installment. Feel free to sing along in four-part harmony. With feeling. Cuz'...

You can get anything you want at IN VIVO Blog.
You can get anything you want at IN VIVO Blog.
Log right in, it's a click away.
Just a finger tap. You don't have to pay.
You can get anything you want at IN VIVO Blog. (Excepting Roger.)

While You Were Eating Leftovers

As collective food coma descended on much of the US (and of course the various outposts of expat households worldwide) this long weekend, we like many of you stayed as far away from our PCs as possible, logging in only to get a quick glimpse at sale prices and dig up a few leftover turkey recipes. Next thing you know it's December already and you've eaten sixteen turkey sandwiches.

So, what did you miss while you were eating turkey tikka masala (or checking out some healthier options) ...

• $45 billion is really hard to come by these days. Coincidentally, bankers in the know suggest that's about how much Roche will need to borrow to finalize its acquisition of Genentech. Reuters writes that perhaps its time Roche started considering alternative sources of funding. Quoth the newswire on Sunday: "The question is about size. In light of the current climate, a $45 billion loan looks large. It would have to be a combination of everything -- Roche would have to print bonds to get the deal done," a senior banker close to the deal said.
• Scientists affiliated with Regulus Therapeutics have taken a big step toward proof-of-concept for anti-microRNA therapy. A study to be published in Nature this week detailed the role of miR-21 in heart failure in mice and demonstrated that an anti-miR-21 single-stranded oligonucleotide could prevent or treat heart failure in mouse models.
• Sometimes the life-cycle gets a flat tire or two. Following its October rejection in Europe as a fibromyalgia treatment, Lilly has pulled its NDA for Cymbalta for management of chronic pain. Lilly said it planned to resubmit the application in the first half of 2009.
• Another installment of the New York Times' 'Evidence Gap' series looks at the minimal impact a landmark 2002 hypertension study had on use of generic diuretics. The NYT writes that the Allhat study, as it was called, may be a useful case study about the difficulties of changing established medical practice, regardless of the savings, for policy experts and others pushing comparative effectiveness trials to lower the nation's prescription drug bill.
• Studies abroad: sure they're cheap and it's easier to recruit patients, but the WSJ this morning points out the various pitfalls, and notes that the increasing percentage of drug trials run in low-to-middle income nations are receiving increased scrutiny.
• Vaccination: not so profitable for many doctors, and some are considering eliminating jabs from their practices, says this AP piece (via the Boston Globe).
• Biotech: Just add water, some day.

image from flickr user Muffet used under a creative commons license.

DotW: You Can Get Anything You Want at IVB

This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why I called the post Deals of the Week.

You can get anything you want at IN VIVO Blog.

You can get anything you want at IN VIVO Blog.

Log right in, it's a click away.

Just a finger tap. You don't have to pay.

You can get anything you want at IN VIVO Blog.

Now it all started one Thanksgiving ago, was on--last Thanksgiving, when Chris Morrison and I start writin' a blog about deals, but not every day, just once a week. And writin' about deals once week, you know it's a lot of work, and there's a lot of garbage you gotta sift through, but we decided it would be a friendly gesture on behalf of readers.

So we trolled around the Internet with our shovels and rakes and other implements of destruction (aka FDC-Windhover's Strategic Transactions database) looking for deals to analyze. But then a big bad editor said why are you doin' that? We are closed on Thanksgiving.

And we had never heard of a blog closed on Thanksgiving before (we don't get out much) and with tears in our eyes we drove off into the sunset looking for another place to put the garbage--I mean our deals.

We didn't find one. So we wrote our post anyway, went back and had a Thanksgiving Day that couldn't be beat, and it's been a recurring feature here at IVB ever since.

In honor of the day, we hope you consider joining the IN VIVO Blog Movement. All you've got to do is walk into the office wherever you are, just walk in and say "You can get anything you want at IN VIVO Blog." And walk out.

You know if one person, just one person does it, they might think he's really sick and they won't take him...And can you, can you imagine fifty people a day, I said fifty people a day (okay, we'd really like 1000) walking in, quoting a line from IN VIVO Blog and walking out?

And friends, they might think its a movement. And that's what it is, the IN VIVO Blog Movement.

Remember Deals of the Week? (This is a post about Deals of the Week.) Without further ado, we bring you this week's installment inspired by Arlo Guthrie. Feel free to sing along in four part harmony. With feeling.

King/Alpharma: King Pharmaceuticals' is finally king of pain. Its relentless--and often contentious--battle to win Alpharma came up aces this week. The two companies announced Nov. 24 that they have signed a definitive merger agreement in a deal that values Alpharma at $37 a share or roughly $1.6 billion. The deal, which remains subject to approval by the Federal Trade Commission, substantially bolsters King's pipeline of marketed pain products, adding Kadian and the Flector pain patch. The merger also gives King Alpharma's experimental Embeda, an abuse-resistant oral form of morphine that won a positive but not overwhelming vote of support from the FDA's Anesthetic and Life Support Drugs and Drug Safety and Risk Management Advisory Committee on Nov. 14. Together with King's own tamper-resistant version of oxycodone, Remoxy XRT, whose approval also is under review at FDA, the addition of Embeda stands to make the Bristol, Tenn.-based specialty pharma a leader in the abuse-deterrent opioid market. Analysts lauded the news: Corey Davis, of Natixis Bleichroeder called the deal "a no-brainer for King", while Cowen and Company's Ian Sanderson wrote in a same-day research note that "the merger is a strategic and financial plus for King. Still it almost didn't come to pass. Even after Alpharma had a change of heart and began entertaining the offer, King still had to come up with the financing to get the deal done--no mean feat in the current business climate. In the end, the company's lenders came up with a smaller total loan package than was originally proposed: a combined debt financing that provides King with $775 million in cash to complete the Alpharma acquisition and another $430 million on the books post-acquisition for drug development and additional deal-making. But it didn't come cheap: Cowen's Ian Sanderson estimated the proposed interest rates on both facilities were LIBOR plus 500 basis points, or 7.15 percent. "The debt repayment terms are fairly onerous, reflecting the risk aversion of the lending banks even to a well-capitalized merger transaction," he said in an interview with "The Pink Sheet" DAILY.

Novo Nordisk/Merrion: Diabetes powerhouse Novo Nordisk announced Nov. 24 that it would continue it's collaboration with Merrion Pharmaceuticals to develop and commercialize oral insulin analogs, despite its wishy washy approach to another alternate delivery technology, inhaled insulin. Under the deal, Merrion will apply its proprietary GIPET process to synthetic insulin candidates selected by Novo Nordisk. In return, the Dublin, Ireland-based biotech will receive €47.5 million ($58 million) in up-front fees and milestone payments, plus royalties, for the first product developed under the partnership. In an interview with "The Pink Sheet" DAILY, Merrion CEO John Lynch declined to break out the upfront and milestone-based deal figures. (Translation: there ain't a lot of money flowing into Merrion's coffers just yet.) The move isn't too surprising. Novo Nordisk has a history of hedging its bets when it comes to insulin delivery. That was very much the company's strategy when it partnered with Aradigm for that biotech's inhalable insulin. But following the failure of Exubera in the marketplace--and the rapid exits of both Pfizer and Lilly from the inhaled insulin stage, Novo Nordisk quickly followed suit, transferring its entire portfolio of inhaled-insulin patents to Aradigm earlier this year. Merrion might want to have a chat with another Novo partner: Emisphere. Earlier this summer Novo and Emisphere teamed up to develop an oral version of Novo's long-acting GLP-1 analog Victoza in a deal worth $10 million up-front. Emisphere is no stranger to the oral insulin field. It gave up on that delivery route some months ago.

Roche/Memory: Thanks for the memories, Memory Pharmaceuticals. The latest cash-strapped biotech lost its battle for independence on Tuesday Nov. 25, when Roche announced it would put an end to its partner's misery, buying the company for just $50 million, or 61 cents per share. Having seen its share price drop to just pennies on the dollar, the struggling Memory Pharmaceuticals faced an impending NASDAQ delisting on Dec. 3 and had just a few months of cash left in its coffers. The acquisition gives Roche full ownership to Memory’s nicotinic alpha-7 agonist program, including the Phase IIa drug R3487/MEM 3454 currently in Phase IIa trials for Alzheimer’s disease and cognitive impairment associated with schizophrenia, as well as the Phase Ia Alzheimer’s medicine R4996/MEM 93608. “This deal represents a 319 percent premium to the previous day’s closing price of $0.15, which we believe is fair given the current environment for small cap biotechnology valuations and Memory’s balance sheet,” wrote Rodman & Renshaw analysts Christopher James and Jason Butler in a Nov. 25 research note. Hmm. Wonder if Memory's private investors, which include MPM Capital and Great Point Investors, feel the same way. With just $20 million on its books and another $50 million from Roche, this can't be a money-making deal for investors. According to FDC-Windhover's Strategic Transactions database, Memory raised $80.3 million through a variety of financings, including an $11 million debt placement and a PIPE worth $32.7 million since it went public in 2004. According to the company's CFO, Michael Smith, the news for investors is even more grim: since its founding Memory has accumulated $250 million in deficits. We are tempted to sing a revised version of "Where have all the flowers gone?"--"Where has all the money gone?" Perhaps "Brother can you spare a dime?" is more appropriate.

Cephalon/ImmuPharma: Analysts such as Barbara Ryan at Deutsche Bank may wring their hands at Big Pharma's unwillingness to buy assets (Roche and J&J being this week's exceptions). But we aren't surprised to see more deals like tie-up between Cephalon and ImmuPharma announced this week. The terms of the deal give Cephalon an option to obtain exclusive worldwide rights to ImmuPharma's experimental lupus medication Lupuzor, currently in Phase IIb clinical trials, for a $15 million up-front fee. Cephalon--like King--fits what T. Rowe Price portfolio manager Kris Jenner believes is the profile of the industry's less obvious deal-makers. “There are lots of cash-rich companies short on product flow,” he argues in an upcoming IN VIVO feature. Moreover, while investors are clamoring for acquisitions, licensing arrangements that provide pharmas with valuable products and biotechs with cash to keep the lights on--could become the norm in today's tough business climate. Certainly, the Cephalon/ImmuPharma deal fits that model. ImmuPharma gets some much needed cash right away--as of June 30, the company was down to it's last £1.6 million according to its quarterly filings. (In July, the company announced a private placement worth £2.7 million, making its cash position marginally better. But still...) And if the drug works as advertised, ImmuPharma also stands to gain up to $500 million in various milestones. Cephalon, meanwhile, gets to defray the commercial and regulatory risks associated with buying 100% of Lupuzor until it is much further along in the clinic, when much of the scientific uncertainty about the product has been removed. If Cephalon exercises its option, it will assume all expenses for Phase III studies and beyond. "Our current cash position has created the opportunity to make this type of deal, which helps to position Cephalon and our pipeline for longer term growth," Frank Baldino, chairman and CEO of Cephalon, said in a press release announcing the news.

J&J/Omrix: Johnson & Johnson began its cash tender offer for biosurgical sealant specialist Omrix Biopharmaceuticals this week, valuing the company at $438 million or $25 per share. Omrix will operate separately and report through J&J’s Ethicon unit, which already sells Omrix’s fibrin sealant and thrombin-based product lines. Ethicon will also get a line of antibody-based immunotherapy products for immune deficiencies and various infectious diseases. Sales of those products hit $10.1 million in 3Q 2008, up 40% from the same period in 2007. J&J will take a $120 million charge to complete the deal, which could signal the beginning of an opportunistic J&J buying spree as the medical products giant looks to use its $14.8 billion in cash to buy up assets from companies pressured by shrinking valuations. Leerink Swann analyst Rick Wise calculates Omrix will add a tenth of a percent to 2009 top-line growth, as J&J weathers declines in Procrit and Cypher sales (5% and 3% of total 2007 sales, respectively) and generic pressure on Risperdal and Tomamax, which accounted for just under 10% of total 2007 sales. Although J&J already had a relationship with Omrix and the deal can be seen mainly as a low-risk way to leverage its sales force in new territories, it also shows the logic of Omrix’s development strategy of sourcing multiple products from human plasma (fibrin, thrombin, immune globulins). It stands in contrast to thrombin competitor ZymoGenetics, whose recombinant human thrombin Recothrom, a higher priced product, has been struggling to gain market share since its launch in early 2008. In the face of Recothrom’s troubles and a poor cash position, on November 21, Zymogenetics’ CEO Bruce Carter retired--Mark Ratner.

Just remember. You can get anything you want at IN VIVO Blog. Excepting Roger. Happy Thanksgiving!

Deals of the Week: The Alice's Restaurant Edition [UPDATED]

This post is called Deals of the Week, and it's about deals, and the week, but Deals of the Week is not the name of the blog, that's just the name of the post. And that's why I called the post Deals of the Week.

You can get anything you want at the IN VIVO Blog.
You can get anything you want at the IN VIVO Blog.

Log right in, it's a click away.
Just a finger tap. You don't have to pay.
You can get anything you want at the IN VIVO Blog.

Now it all started three days ago--it's been three business days since our last DotW posting, but we decided it would be a friendly gesture for us to fill you in before the tryptophan coma sets in.

(News flash: The NY Times reports here on the possible health dangers of the annual holiday feast. Sadly, the palpitations induced by the requisite Thanksgiving toast were not mentioned. Thankfully, humorist Brian Unger has some helpful suggestions in this NPR podcast.)

In honor of the day, we hope you consider joining the IN VIVO Blog Movement. All you've got to do is walk into the office wherever you are, just walk in and say "You can get anything you want at the IN VIVO Blog." And walk out.

You know if one person, just one person does it, they might think he's really sick and they won't take him...And can you, can you imagine fifty people a day, I said fifty people a day (okay, we'd really like 1000) walking in, quoting a line from IN VIVO Blog and walking out?

And friends, they might think its a movement. And that's what it is, the IN VIVO Blog Movement.

Remember Deals of the Week? (This is a post about Deals of the Week.)

Without further ado, we bring you this week's installment: the Alice's Restaurant Edition. (Feel free to sing along in four part harmony. With feeling.)

• Celgene/Pharmion: As pharma-land speculated on the fates of BiogenIdec and Genzyme, Celgene surprised the Street with its $2.9 billion cash and stock offer for Pharmion (35% cash, 65% equity, at an almost-50% premium to Friday’s close). As colleague Melanie Senior notes in this post, the deal makes exquisite sense, given Pharmion's six year relationship with Celgene for ex-US rights to the controversial cancer treatment thalidomide (Thalomid). While the acquisition certainly gives Celgene heft, it may also make the company even more attractive as a take-over candidate for desperate Big Pharma. One reason (described by Michael McCaughan in more detail here): Celgene's restricted distribution program for Thalomid is routinely cited by FDA as one of the few, clear successes in the industry. And as pharmas move into specialty areas where risk management is critical, having Celgene's in-house expertise could be a boon.
  
• BiogenIdec/Neurimmune Therapeutics: As noted here, Neurimmune eschewed VC funding, opting instead for an undisclosed upfront and biodollars that could one day reach $390 million. (Another case of American blind justice?) Interestingly, this marks the third early stage neurodegenerative deal BiogenIdec has inked in the past 15 months. In August 2006, the biotech signed a deal worth up to $25 million with Amorfix, a Canadian theranostic company profiled in this START-UP article, for potential ALS therapeutics. And in September 2007, Biogen teamed up with the Brain Science Institute at Johns Hopkins University to identify and develop therapeutics for MS and Parkinson's and Alzheimer's Disease.
  
• Olympus/Gyrus: When you plunk two billion buckaroos on the table, people tend to take notice--even if it isn't a particularly crowded or dynamic space. Tongues were wagging after Olympus announced its decision to acquire UK-based Gyrus, which makes visualization devices for use in minimally invasive surgery. It's interesting that Olympus appears willing to pay a premium—by some estimates up to 60%--for a publicly held company that has had its share of struggles. It's not clear what's driving the big dollar value. Perhaps Olympus's desire to dominate in the endoscopy market--or did they sense someone else was going to play? An FT article speculates that there may have been other suitors. Among the rumored contenders: Johnson & Johnson and Stryker. At the same time, Monday's deal clearly validates Gyrus' 2005 acquisition of ACMI, a merger that (as we wrote here) helped solidify Gyrus's position in a number of urologic and gynecologic categories.
  
• Merck/ Nicholas Piramal: Call it the first step to off-shoring proof of concept. With the price of Phase II deals climbing ever higher, Merck took an unusual step this week to get POC compounds on the cheap. It's going to India. (Not China!) The company announced a deal with Nicholas Pirama India to research and develop new oncology drugs against two selected targets. Under the agreement, Nicholas Piramal will develop the targets from the discovery stage up to proof-of-concept and then hand them back to Merck, which will handle late-stage clinical trials and commercialization. For its work, Nicholas Piramal stands to receive milestone payments of up to $175 million per target, as well as royalties on sales of any products resulting from the collaboration. Here's the release.

And remember, you can get anything you want at the IN VIVO Blog.
(Excepting Roger)
Da da da da da da da dum
At the IN VIVO Blog.
(apologies to Arlo Guthrie)

UPDATE: Because excess is de rigueur at Thanksgiving, we give you this bonus deal, just announced: GSK has ponied up $1.65 billion for Reliant Pharmaceuticals, a privately held company focusing on in-licensing and developing late stage cardiovascular drugs. Reliant has four marketed products, including US rights to Lovaza, an omega-three derivative designed to treat high-triglyceride levels. Reliant's certainly had it's ups and downs: in 2005 the company tried to go public and failed and this past August it filed again for a public offering potentially worth $400 million (for our analysis of Reliant, see this IN VIVO article). Reliant's acquisition adds credence to our twin track IPO/M&A thesis: i.e when companies register for IPOs they are effectively putting themselves on the auction block. (Remember Adnexus?) In addition, it's the second spec pharma tie-up this week, coming just days after Celgene's take-out of Pharmion. It seem's likely that other spec pharmas could be acquired near-term. MGI is reportedly for sale, and there could be increased pressure on ProNovo BioPharma, the original developer and manufacturer of Lovaza, which still retains ex-US rights to the product. On a conference call this morning, ProNovo management refused to speculate on that possibility. One final note: ProNovo and Reliant aren't the only ones benefitting from GSK's deep pockets: the Boston Business Journal reports that Alkermes will receive $175 million when it sells its stake in Reliant to GSK. Not a bad Thanksgiving present, eh?