Financings of the Fortnight Sees Signs That Point To Going Public

Oh, the siren song. The new year arrives, the buzz and handshakes at the JPMorgan conference get everyone hopped up, and a scramble of biotech IPO activity lights up the wires. In 2012 it was Verastem, Adocia, Cempra and Chemocentryx all going through the looking glass by early February. This year, the early birds are KaloBios Pharmaceuticals, Stemline Therapeutics, and Zoetis, the last being an outlier in that it’s Pfizer’s animal health products division, not a human biopharma, and it instantly zoomed to a $13 billion market capitalization. (If you’ve read The Omnivore’s Dilemma, by the way, you’re not likely to invest.)

Two diagnostics firms and an Israeli drug developer could also jump soon, and back on the mega-IPO front, there are stories afoot that Quintiles is eyeing the public markets. Whatever the actual fervor of behind-the-scenes activity, the leaks are a sign that the market is at least promising enough to float a trial balloon through the press.

After the initial flurry in 2012, however, the rest of the year brought about a dozen more IPOs. That same count in 2013 would be a disappointment. Sure, the U.S. government’s chronic can-kicking of fiscal cliffs, debt ceilings, and sequestrations means that we’ll probably never have the predictability markets crave, but the economy continues to creep forward, regulations are in place to (theoretically) make IPOs easier, and the FDA is approving more drugs than ever, except for 1996. No, really. The final count last year was 39 novel drugs; the only year in the PDUFA era with a higher total was 1996, with 56.

What’s more, the class of 2012 has had a strong post-IPO performance – shares up 41% mean, 36% median – which should give them the luxury of financing less frequently, according to a recent BMO Capital Markets analysis. In turn, that might free up more investor cash for new issues. That’s our own speculation. The thing is, a few high-profile biotechs recently have brought on board crossover investors who expect an IPO in the not-too-distant future. They really want to get deals done, and they're motivated to buy shares on the public side, too. Like the economy, it's not a slam dunk indicator of more IPO activity, but it's another potential factor to add to the mix.

One veteran biotech investor now in the thick of all this crossover action is Jim Tananbaum, and his new firm Foresite Capital just closed a $100 million fund. It already has six investments on its books, and we have the details below in our roundup.

We’ve discussed the crossover-biotech relationship quite a bit lately, and we bring it up again with regard to antibody developer KaloBios' new listing. Mutual fund giant Fidelity led its Series E round last May, about six months before KaloBios said it would attempt to sell 3.85 million shares for $12 to $14 apiece; it later  lowered the range to $8-$9. It sealed the deal February 1, selling 8.75 million shares at $8 apiece. (The upcoming Start-Up magazine will take a closer look at KaloBios’ winding path to the public markets.) The other biotech IPO this fortnight was Stemline Therapeutics, which closed its IPO of 3.8 million shares including the overallotment at $10 per share, netting $35.5 million. The firm had been on file since April.

It's been a winding path, perhaps even a long strange trip, just to get to this point in our every-other-weekly wordfest. Time to cross over to the other side of this snappy little JPEG, where you, dear reader, will find yourself soaking in the latest edition of...

Zoetis: Pfizer continued its march toward pharma-only status by debuting shares of its animal-health division, Zoetis, in an initial public offering on January 31 that raised $2.2 billion and immediately valued the new company at $13 billion. Since the start of 2011, Pfizer has sold off its formulation business Capsugel to private equity firm KKR for $2.4 billion and its nutritionals unit to Nestle SA for nearly $12 billion. The moves were set in motion by CEO Ian Read, who took the reins in late 2010 and put everything in the drug giant’s portfolio up for review. Pfizer retains an 80% stake in Zoetis, although analysts say it’s likely to divest the rest through a stock swap later this year to avoid taxes, a move similar to Bristol Myers Squibb’s IPO-fueled sale of its Mead Johnson Nutrition infant formula unit in 2009. Pfizer and its underwriters, led by JPMorgan Chase, Bank of America Merrill Lynch and Morgan Stanley, first aimed for a target between $22 and $25 a share. Zoetis sold 86.1 million shares at $26 apiece, and the price rose as high as $31.74 during the first day of trading. The stock closed February 6 at $31.01. – Lisa LaMotta

Bone Therapeutics: The Belgian regenerative medicine firm announced January 28 it has raised €7.7 million ($10.4 million) in a Series D funding round from current investors and regional bodies to support Phase III trials of its lead cell therapy, PREOB, in patients with osteonecrosis or non-union bone fractures. Like other clinical-stage private European biotechs, Bone Therapeutics is tapping its existing investment syndicate for a relatively small amount to fund a Phase III clinical study while it waits for a more benign investing climate. As our colleague Mark Ratner explained in the most recent issue of In Vivo, the field of cell therapy is undergoing a prominent evolutionary step right now as scientists reconsider the role cells play in the regeneration of tissue, but few large firms except for Shire have invested aggressively in the area. The financing includes €6.1 million from existing investors including Nausicaa Ventures, BAMS Angels Fund I and Life Science Research Partners and €1.6 million in grants from the Societe Regionale d'Investissement de Wallonie (SRIW) and Sambrinvest, both in the Walloon region of Belgium. Up to now, the company has raised around €30 million in funding since it was set up in 2006, including €18 million in capital and €12 million in grants and subsidies. PREOB’s production involves extracting mesenchymal stromal cells from patients' bone marrow, and treating and culturing them ex vivo using a proprietary method, so they develop into bone-forming cells, osteoblasts. These are then injected percutaneously into the necrotic or fracture region, avoiding the need for more invasive surgical procedures. "We think we are the only company pursuing osteoblast cells for therapeutic purposes in oesteonecrosis, whereas potential competitors are using differentiated bone stem cells,” CEO Enrico Bastianelli told our Pink Sheet DAILY colleagues. Osteonecrosis is a progressive degenerative disease of bone, most commonly seen in the hips of relatively young patients age 30 to 50 years. – John Davis

Ariad Pharmaceuticals: Fresh from the FDA’s accelerated approval of its chronic myeloid leukemia treatment Iclusig (ponatinib), Ariad raised $310 million, the latest in a series of follow-on mega-financings for for mid-tier biopharma companies. The firm sold 16.5 million shares at $19.60 each, with the cash going to help marketing and manufacturing of Iclusig, which is aimed at patients with a genetic profile associated with resistance to currently approved tyrosine kinase inhibitors. J.P. Morgan, Cowen and Co., and Jefferies & Co. led the underwriting. Iclusig was one of several oncology drugs in 2012 that earned FDA approval before their user fee date, a remarkable trend in a year that saw the most novel drug approvals from the agency since the mid-1990s. Ariad owns full rights to Iclusig, and CEO Harvey Berger said it will “move heaven and earth” to get it approved next for front-line CML by the end of 2014 before generic versions of Gleevec (imatinib), the breakthrough therapy for the indication, hit the market. It remains to be seen, then, how much Ariad will spare for its other pipeline candidates from the follow-on bounty just raised. In October the firm reported Phase I data for AP26113, its dual ALK/EGFR inhibitor, at the European Society of Medical Oncology meeting, and noted that patients on the drug did not develop the rash typically produced by EGFR inhibitors. AP26113 is designed not to inhibit “native” EGFR, which is widely expressed in normal tissue like the skin. – Alex Lash

Foresite Capital Management: A bit of fund news comes this fortnight from a grizzled industry veteran. Jim Tananbaum was among the founding partners at Prospect Venture Partners’ second and third funds in the 2000s, and the decade before that, he founded GelTex Pharmaceuticals and sold it to Genzyme for $1.6 billion. Now his investment firm, Foresite, has closed its first fund with $100 million committed. It’s already made six investments: AcelRx Pharmaceuticals, Intarcia Therapeutics, Keryx Biopharmaceuticals, Puma Biotechnology, Solta Medical, and Tarsa Therapeutics. Two of those companies have been in the news recently. Puma rewarded its shareholders with an unusual path to a New York Stock Exchange listing last year. It used the Form 10 pathway, reverse-merging into a public company shell, then making a pit stop on the bulletin boards on its way to the Big Apple. Intarcia, developing an implantable version of type-2 diabetes drug exenatide, attracted a huge mezzanine venture round last November: $160 million in equity, $50 million in debt. We assume it’s mezzanine, because it featured a host of cross-over investors who, as has become more common in biotech, are looking for late-stage private companies that will be ready to go public fairly soon. New to Tarsa, Foresite led its Series B round in 2012; at the time the firm already had in hand a Phase III oral candidate to treat osteoporosis, but the drug class, recombinant salmon calcitonin, is drawing regulatory scrutiny for possible ties to cancer. – A.L.

All of the Rest: In an extension to its February 2011 Series D financing, Ocular Therapeutix (ophthalmic drug hydrogel delivery) raised an additional $9.8mm tranche for a total round of $23.8mm… In what appears to be its Series C round, cancer, infectious disease, and biodefense vaccine developer Aduro Biotech has brought in $6.5mm… Connecticut Innovations has backed CyVek’s $5.5mm Series D round to support commercialization of its immunoassay technology, CyPlex, a biomarker analysis platform with applications in life sciences, drug discovery, and clinical research… Baxter Ventures participated in a $2.7mm Series A round for start-up Zytoprotec GmbH, a start-up developing peritoneal dialysis solutions and cytoprotective peptide treatments... MentiNova, which has filed an IND for an oral medicine for Parkinson’s symptoms, has raised $500k in early-stage capital from Foundation Venture Capital… German biotech Apceth received funding to accelerate the progress of its first cancer therapeutic, Agenmestencel-T, which uses a patient's own modified adult mesenchymal stem cells… Recently formed Avillion, with a business plan to partner with biopharmas to co-develop and finance late-stage therapeutics, closed an initial financing round through Abingworth and Clarus… Through a private placement, publicly traded Champions Oncology grossed $9.3mm… Nasdaq-traded Israeli biotech BioLineRx brought in $8mm with a private offering of units… Public NanoViricides raised $6mm through a private placement to fund clinical trials of its influenza vaccines… Concurrent with a reverse acquisition for a public listing on the OTC BB, cancer treatments company DelMar Pharmaceuticals completed a $5.4mm PIPE… First planning to bring in money through a FOPO, but later deciding on a private offering, Canadian company Immunovaccine hopes to gross $2mm to support preclinical/clinical trials of infectious disease candidates… Antibody developer Celldex Therapeutics netted over $83mm in its public offering of 12mm shares at $7.50… Keryx Biopharmaceuticals is putting its $70mm in FOPO proceeds into continued studies of iron-based compound Zerenex (ferric citrate), which has completed a US Phase III trial for treating elevated phosphate levels in end-stage renal disease patients… NewLink Genetics will apply the $42.8mm raised in a public offering to progress its clinical-stage cancer pipeline… Anthera Pharmaceuticals (candidates for inflammatory conditions including cardiovascular and autoimmune diseases) netted $37.6mm in a FOPO of 60.6mm shares at $0.66… A follow-on for GI-focused Ventrus Biosciences brought in $20mm… Transdermal drug delivery firm Echo Therapeutics netted $9.5mm in a FOPO… Tel-Aviv-traded Can-Fite BioPharma, in a public offering of units, raised $7.2mm… An at-the-market financing garnered almost $4.5mm for Navidea Biopharmaceuticals to fund further development/launch of cancer and CNS radiopharmaceutical imaging agents including Lymphoseek (technetium tc 99m tilmanocept), NAV4694, NAV5001, and RIGScan… Through an offering of common stock and warrants, Opexa Therapeutics raised $3.25mm to support continued trials of Phase IIb MS vaccine Tcelna... Research-focused Pacific Biosciences completed a $20.5mm debt offering through Deerfield Management to support continued adoption by biological research firms of its SMRT sequencing technology… Deerfield also led a $15mm debt offering for Flamel Technologies to advance its R&D pipeline of drugs formulated with its Medusa and Micropump delivery technologies... Nutritional supplements company MusclePharm completed a $3.5mm RDO of convertible preferred shares led by the Frost Group… In an SEC filing, cardiovascular device maker Covidien restated its previously announced intent to spin-off its Mallinckrodt pharma business.

Photo courtesy of the U.S. Navy.

Deals Of The Week: Pfizer Goes For An IPO

The big news this week was the deal that didn’t happen: the sale of Pfizer’s animal health division. Pfizer announced June 7 that it will split off the business into a new standalone company to be called Zoetis instead and that it is preparing to file an initial public offering of a minority ownership stake in the new company.

Investors had been anticipating either a sale of the business or a split-off since CEO Ian Read announced plans to shed the business last year along with its nutrition business, so the news isn’t exactly a surprise.

Still, Pfizer inked a deal for its nutritionals business with Nestle S.A. in April, offloading the business for $11.85 billion, a price that reflects a pretty premium over the $9 billion to $10 billion some analysts had predicted.

Pfizer’s decision to spin-out the business means rival big pharmas like Merck and Eli Lilly won’t be expanding with Pfizer’s assets. The chiefs at both companies have said they remain committed to animal health and the diversified business model. Of the three, Pfizer’s business is the largest with $4.2 billion in sales in 2011. Merck’s animal health business brought in $3.25 billion in sales and Lilly’s $1.67 billion.

A split-off offers tax advantages of a sale, which Read called out in a press release. “Our focus continues to be on taking the actions that will generate the greatest after-tax value for our shareholders,” he said. Analysts had valued a potential sale of the business at around $15 billion.

With the decision to spin-out the business, Pfizer is following a similar route to the one Bristol-Myers Squibb took when it spun-out its Mead Johnson nutritionals business in 2009. That move has been well-received on Wall Street. The initial offering was $24 per share and the stock closed June 7 at $81.12, representing around 70% growth.

Pfizer hasn’t priced the IPO, so it remains to be seen how much it will cost to buy into Zoetis, but Read has vowed to make the company independent by July 2013 so there is plenty of time to analyze the numbers and start wagering.

Elsewhere in the news, GlaxoSmithKline announced June 8 that it has extended its offer to buy Human Genome Sciences from the prior deadline of June 7 to June 29. Otherwise, it was a slowgoing week on the business development front ...

Merck KGaA/ Dr. Reddy's Laboratories – India's global generics firm Dr. Reddy's Laboratories, announced June 6 it was linking up with Merck Serono, the pharmaceutical division of Germany's Merck KGaA, to develop and commercialize biosimilar cancer products, principally monoclonal antibodies. The collaboration will exploit Merck Serono's expertise in biologics manufacturing, development and marketing, which includes the MS therapy Rebif (interferon beta-1a) and the anticancer Erbitux (cetuximab), and Dr. Reddy's pioneering role in biosimilars (it already markets four such products in India). No money is changing hands and the collaborators will share risks and rewards, with Dr. Reddy's conducting early development through Phase I, and Merck Serono taking over further clinical development and manufacturing. Merck Serono will commercialize the biosimilars globally, with Dr Reddy's receiving royalties, except for the U.S., where the companies will co-commercialize on a profit-sharing basis, and certain unspecified emerging markets, where marketing will be co-exclusive, or where Dr Reddy's will have exclusive rights. Biosimilars is a new sphere of activity for Merck KGaA, and one it can enter at a relatively low cost. That's important for the company, as it has just started an efficiency program which calls for R&D facility closures and job losses in order to make around €300 million in costs savings by 2014. For Dr Reddy's, it provides a source of research funding while keeping its options open outside of the oncology sector. – John Davis

Onyx/ Anderson Cancer Center – In just the latest of its research ties to biopharmaceutical companies, the MD Anderson Cancer Center at the University of Texas announced June 4 that it will collaborate with Onyx Pharmaceuticals in an effort to delineate the potential of that company’s anti-cancer candidates carfilzomib and oprozomib in multiple myeloma and lymphoma. Financial terms of the two-year research agreement were not disclosed. Carfilzomib, to be marketed under the brand name Kyprolis, is under review at FDA for relapsed and refractory multiple myeloma. Oprozomib, like carfilzomib, is an oral proteasome inhibitor, is Phase Ib/ II study in hematological malignancies. Onyx and MD Anderson personnel will oversee the collaboration together in a joint steering committee, with MD Anderson conducting all studies related to the agreement. The focus will be on the potential of proteasome inhibitors in tandem with other novel, early-stage cancer candidates, as well as to increase the biological understanding and enhance the clinical profile of the two Onyx compounds. MD Anderson’s most recent deal with private industry was the licensing of an experimental folate-binding protein (FBP) E39 vaccine for the prevention of recurrence of gynecological cancer to Galena Biopharma. – Joseph Haas

Picture credit: Wikimedia Commons

DotW:Talk Is Cheap; Debt Is Cheaper

Sanofi-Aventis set the debt world aflutter (or is it atwitter these days?) with its massive $7 billion bond offer this week. We'll spare you the gory details; suffice to say there are six tranches and a mixture of fixed and floating rates (tied to the low low 3-month Libor of 0.31). The most important thing to keep in mind? The highest interest rate Sanofi could be paying? 4%.

With debt that cheap who needs to invest in R&D?

It's a relevant question. The only story generating more ink these days than Sanofi/Genzyme (which still manages to capture a weekly headline or two thanks to ongoing production snafus), is Big Pharma's R&D crisis.

Just this week GlaxoSmithKline's Witty took to The Economist with an op-ed about the perils of industrializing the drug model and the need to think (and act) smaller via a new kind of research environment. (Our take on that model is here.) The March IN VIVO has an article of a similar vein from Bernard Munos, the former Lilly exec, who's been one of the leaders in the debate on how to move big pharma out of its R&D slump.

Still, if you believe analyses by McKinsey and other consultancies that calculates the internal rate of return for in-house small R&D at 7.5% at a time when the cost of capital is around 10%, and balance that against the low cost of debt, you start to wonder. It sure seems like big pharmas might be better off in the short term shelving R&D in preference for a more -- how shall we put it? -- transactionally driven approach.

As much as big pharma likes to talk about the intrinsic value of R&D, the real problem for many biopharma players -- and Sanofi definitely falls in this camp -- is bridging the patent chasm looming as blockbusters like Plavix go generic. To solve that problem you don't need R&D, you need products with near-term revenue. A platform for growth is nice, but as the Genzyme purchase shows, $4 billion in annual short-fall is a lot nicer -- and more attractive to investors who are often weighing not whether to invest in Pfizer or Roche of Sanofi but whether to invest in pharma versus IBM and General Electric.

Certainly if debt stays this low, Deals of The Week! ought to continue to be a happening place. And you can't quibble with our value proposition. IN VIVO Blog is one of the few things cheaper than the current borrowing rate, something to consider as you peruse this weeks offering...

Teva/Procter & Gamble: Sanofi-Aventis, which has been snapping up consumer health outfits small and large --think Chattem--for the past two years, may have some competition. This week comes news that the Israeli giant Teva is joining forces with P&G (known to midwesterners as Procter & God --they make diapers so you can understand the appellation) to create an ex-US-focused over-the-counter J/V. Teva doesn't have a sizable presence in the OTC space currently, but P&G does, with its so-called "personal health care" business generating around $2.3 billion in 2010, mostly in the US market. According to execs at the two companies, combined ex-US sales of their OTC products were more than $1 billion in 2010, with projections soaring north of $4 billion in a "a few years." As part of the deal, Teva gains access to P&G's leading OTC brands, including Metamucil and Pepto-Bismol. In exchange, P&G said it will benefit from Teva's broad geographic reach, its manufacturing capability and portfolio of 1,500 active ingredients. Teva has a stronger distribution network to pharmacies, whereas P&G has a stronger network to food and mass retail outlets. P&G is a recognized world leader in consumer brand marketing, an expertise Teva plans to tap. But while the consumer space is hot -- Sanofi isn't the only big pharma avidly interested in selling medicines direct to consumer -- the real rationale for the deal may be in creating a powerhouse well positioned to move Rx products to OTC. It could be tough to beat a Teva/P&G juggernaut in the switch, given Teva's R&D capabilities and P&G's brand equity. Sanofi's Chattem, beware.--Jessica Merrill & EFL

Cephalon/Gemin X: When Cephalon announced March 21 it was buying privately-held Gemin X in a deal worth $225 million upfront, the twitterverse erupted, with at least one biotech watcher tweeting -- and we are paraphrasing -- "one of these days CEPH will buy a company I've heard of." You may not know Gemin X from Adam, but it's true the specialty pharma has a penchant for seeing value in companies Wall St. finds arcane. Mesoblast? Ception? BioAssets? The Gemin X deal gives Cephalon two mid-stage oncology assets, including the pan-Bcl-2 inhibitor obatoclax, which will help bolster an aging franchise dominated by CLL therapy Treanda and cancer pain treatments Fentora and Actiq. Given obatoclax's Phase IIb status, the deal's price tag seems to be at a discount to acquisitions of other oncology players with assets at similar stages of development. In particular the upfront is about 60% what Gilead paid for Calistoga to obtain that privately-held biotech's selective PI3 kinase inhibitor. Nor is this take-out providing Gemin X's dozen or so backers, which include Sanderling Ventures, HBM Partners, and ProQuest-- much of a return. The upfront price is about $100 million more than the company says it raised in private venture money since its 1998 founding.--Lisa Lamotta & EFL

Sanofi-Aventis/The Vision Institute: So pharma’s sharing-caring, all-embracing, academia-targeted R&D approach continues: Sanofi Aventis this week added two further public-private partnerships to its research network, one on each side of the pond. The first was a three-year R&D alliance with the Vision Institute in Paris, France (the second is a three-year diabetes tie-up with scientists at Columbia University Medical Center in the U.S.). The ophthalmology deal stems directly from Sanofi’s 2009 purchase of eye-disease focused biotech Fovea, which is based on the Paris premises of the Vision Institute. Created in 2008, the Institute houses research teams from several of France’s top-ranking research centers, and is located within the Quinze-Vingts National Ophthalmology Hospital. Its director, Prof. Jose-Alain Sahel, helped found Fovea in 2005. Not content, it seems, with owning Fovea – now the Big Pharma’s ophthalmology division – this deal grants Sanofi “priority access” to the Vision Institute’s technological platforms, and commits the Big Pharma to supporting research projects in the areas of optical nerve regeneration, vascular biology, inflammation and gene therapy in various eye tissues. Sanofi will get exclusive global rights to anything resulting from the collaboration, and pay royalties. Fovea’s pipeline includes two Phase II compounds for retinal vein occlusion- induced acute macular edema and allergic conjunctivitis, respectively; Sanofi also has some pre-clinical gene-therapy candidates in eye-diseases from a 2009 deal with U.K. biotech Oxford BioMedica. It’s not clear how many Sanofi scientists are involved in the Vision Institute tie-up, nor what their hoped-for goals are for the three-year partnership. But the emphasis on translational R&D, the highly fashionable magic mix of private and public research, and on co-location – a driving force behind the creation of the Vision Institute as well as this deal – remind us of Pfizer’s flavor of public-private partnership, the city-based Centers for Therapeutic Innovation.--Melanie Senior


Merck/Portola: Is Merck still king in cardiovascular? In mid-January the big pharma pulled the plug on Phase III trials of its anti-clotting agent vorapaxar (remember, that was one of the major assets of the Merck-Schering reverse merger?). Now comes news that Merck is giving back to partner Portola Pharmaceuticals full rights to the Phase-III ready oral Factor Xa inhibitor betrixaban. The reason? Apparently a pipeline review. (Makes you wonder, huh?) Oh, we know the oral anti-coag space, one of the few arenas where you can point to drugs with blockbuster potential, could be a tough one to conquer if you're as far behind development-wise as betrixaban is. Boehringer Ingelheim's direct thrombin inhibitor Pradaxa is already on the market in the US and Europe; two Factor Xa inhibotors -- J&J/Bayer's Xarelto is pending with US regulators and apixaban (from Pfizer and BMS) is a not too distant third -- are next in line. In today's cost-constrained environment is there room for a fourth warfarin replacement? Maybe, but the drug won't just have to be superior to warfarin; coming so late to market, it's likely it would also have to be a damn sight better than the newer agents OR priced at a significant discount. And given the size of Phase III trials required to demonstrate the safety of cardiovascular drugs, pricing at a discount could be a money losing proposition.) Portola put a brave face on the news, talking up the advantages of having a wholly-owned Phase III asset and its desire to work with academic partners like Duke Clinical Research Institute. But the privately-held company, which has raised over $200 million in venture capital and debt since 2003, only has a $100 million in its coffers. Can it afford to run the Phase III trials on its own? Will its venture backers support such a decision? No and probably not. (In prior statements, Portola's CEO Bill Lis has estimated pivotal trials in just one indication could run as high as $400 million.) In the meantime, Portola and its venture backers have to be hoping partner Novartis, which paid $75 million for rights to the anti-thrombotic elinogrel doesn't have a change of heart.--EFL

Merial/Intervet: A little over a year after Sanofi-Aventis and Merck revealed they would combine their respective Merial and Intervet divisions to create the top dog in animal health, the pair decided to call the whole thing off. The logistics in settling anti-trust concerns are just too complicated to make the planned J/V worthwhile. It's not as if these anti-trust issues are new; since the 2010 announcement, market analysts have predicted a consummation would only occur if the companies divested assets worth about $500 million, much in the poultry vaccines arena. (In this case getting rid of the chicken would have had to come first.) In a joint statement, Merck and Sanofi announced each company will retain its current, separate animal health assets and businesses.There is no break-up fee and Sanofi and Merck will cover their individual expenses for the past year’s diligence. (Isn't it nice when a planned deal unwinds so easily?) --Joseph Haas

Image courtesy of flickrer Steve Rhodes via a creative commons license.