Financings of the Fortnight Ponders Haircuts and Waves Its Freak Flag High

There was an unexpected twist last weekend in the health care reform implementation: Docs based in the Delaware Valley got hit harder than expected. It was a rather freaky turn of events, and as of this writing, the boys from our nation's medicine chest (hey, how about working on a better anti-emetic?) are clinging to faint hopes that they can repel the upstarts from the world's biggest biotech hub, also home of some of the world's leading research on cannabinoid receptor agonists.

In its younger, rasher days, Financings of the Fortnight might have begun to gloat, but there's still more baseball to play. Our foam FOTFingers are crossed. Yes. We. Cain.

Away from the diamond, Aegerion Therapeutics has its fingers crossed, too. Its IPO is scheduled for this week, but as of noon Thursday, no word. If it can't get out, it'll be the firm's third IPO swing and miss. It withdrew efforts in 2007 and 2008, and now it's gunning for a $70 million debut. Its latest terms were 4.67 million shares for sale between $14 and $16 a pop. If it gets out, don't be surprised if executives doff their caps to reveal drastic haircuts.

Seven pure-play biotechs have gone public in the US this year with debuts that have averaged 28% below their original target. Add more discounts post-IPO, as six of the seven are below their debut price. It's not that investors are generally IPO-shy. Overall IPO returns are above 15% so far this year, with average first-day "pops" of 7%, according to Renaissance Capital. Yet there's still no clear path forward for biotech issues.

One biopharma-related firm managed to squeeze through the door this week: ShangPharma, a Chinese CRO whose contracts with GlaxoSmithKline and Eli Lilly account for 37% of its revenues, raised $87 million by selling 5.8 million depository shares and is now listed on the New York Stock Exchange. It priced at $15 a share, within its target range of $14.50 to $16.50.

Our advice to Aegerion as it steps up to the plate: Don't worry about the haircut, or even eine kleine chin musik. But fear the beard. Go Giants! It's another installment of...

Celgene: Celgene's $1.25 billion debt issue closed Oct. 7, and it tells us at least two things. First, the financing, its first big debt raise, cements Celgene as a drug company that can raise a ton of cash in an uncertain economy, something bigger brethren Amgen, Pfizer, Merck and Novartis have done during the financial crisis. If there were any doubts about Celgene in the industry's inner circle, dispel them. (Celgene is also under investigation for improperly fighting generic competition. We told you they're all grown up.) Second, and more interesting to this blog, is the debt issue as a tacit stamp of approval of Celgene's run of growth by acquisition. For many years Celgene shunned dealmaking; not so anymore, as our DOTW colleagues are more than happy to discuss. Celgene's long-term R&D partnership with Agios is certainly going to get some votes for "Deal of the Year." And Celgene seems to get more creative as it goes along; no doubt some of the $1.25 billion raised will go toward transactions. (It just sealed its acquisition of Abraxis BioScience that included cash, stock and -- speaking of creative dealmaking -- a tradable contingent value right coupon.) The Celgene debt is in three tranches: $500 million at 2.45% interest will mature in October 2015 and are priced to yield 2.481% ; $500 million at 3.95% will mature in October with 3.981% yield; and $250 million at 5.7% interest will mature in October 2040 with 5.713% yield. Citigroup, JP Morgan and Morgan Stanley are the underwriters. -- Alex "UUUU-RIBE" Lash

Pearl Therapeutics: South San Francisco-based Pearl Therapeutics, which spun out of Nektar in 2006, announced a monster $69 million Series C on October 19. According to Elsevier’s Strategic Transactions, the financing is the 5^th largest private placement this year, outclassed only by by Pacific Biosciences, Archimedes, AiCuris, and Immatics. The money, which comes from Pearl’s existing venture syndicate of Clarus, New Leaf, and 5AM Ventures and includes new investor Vatera Healthcare, will be used to support ongoing clinical trials of the biotech’s PT003, currently in Phase IIb trials for patients with chronic pulmonary obstruction disorder. PT003 is a combination of glycopyrrolate, a long-acting muscarinic antagonist (LAMA), and formoterol, a well-known long-acting β2-agonist (LABA), delivered via a metered dose inhaler (MDI). The drug is being positioned as superior to Boehringer Ingelheim’s Spiriva, the only once daily COPD medicine currently approved in the U.S. which generated over €1 billion in 2009 sales. PT003 will be administered twice daily, but Pearl’s interim CEO Howard Rosen doesn’t think that will curb uptake, especially if the data from ongoing head-to-head trials with Spiriva show superiority. Data will be available by year’s end. Of the backers, Vetara is a relative newbie in the staid, clubby world of venture, founded and funded in 2007 by Michael Jaharis, former co-founder of Kos Pharmaceuticals. Jaharis and his team should provide Pearl valuable commercial advice as the biotech moves PT003 along, having already successfully shephered combo products to market. -- Ellen Foster "Buster" Licking

Synosia Therapeutics: The Swiss biotech's latest round of equity funding coincided with a licensing deal, as Belgian biopharma UCB contributed $20 million of Synosia’s new $30 million Series C round while licensing a pair of Parkinson’s Disease drugs from the startup. Existing investors Versant Ventures, 5AM Ventures, Novo A/S, Aravis Venture, Investor Growth Capital and Swiss Helvetia Fund also participated in the round, which brings Synosia’s total funding to about $90 million. The UCB arrangement also included a non-dilutive upfront payment of undisclosed size, and milestone payments built into the deal could yield up to $725 million. The partnership covers adenosine A2a antagonist SYN-115 and 4-hydroxyphenyl-pyruvate dioxygenase inhibitor SYN-118 for Parkinson’s. Synosia will complete Phase II work on the two drugs on its own before handing them over to UCB for Phase III development and commercialization. The agreement also includes provisions for collaboration on additional drugs originating from either company, at terms to be negotiated in the future. Synosia, which typically obtains compounds abandoned by other pharmas including Roche, also has drugs in its pipeline targeting Alzheimer’s, cocaine dependence and bipolar depression. Aravis and IGC led Synosia’s CHF 32 million ($29 million) Series B round in January 2009. -- Paul "Babe Ross" Bonanos and John "The Count" Davis

Regeneron Pharmaceuticals: The antibody company tapped the public markets for $175 million in an oversubscribed public offering of 5.5 million shares plus 825,000 more for the underwriter, Citi. It's the first follow-on offering for Regeneron since 2006, when it also scooped up $175 million. Meanwhile, the firm secured a steady source of cash by partnering long-term with Sanofi-Aventis, a deal that turns Rengeneron into Sanofi's main source of antibody R&D; the big pharma has options on all molecules from the . The December 2009 extension of their relationship promises Regeneron $160 million a year through 2017, though Sanofi can dial it back to $130 million after 2013. The full skinny on the deal is here. So why the huge injection of dilutive follow-on cash? One answer lies in Regeneron's ambitions. It has programs outside its collaboration with Sanofi, the most advanced being Arcalyst (rilonacept), on the market for the ultra-orphan cryopyrin-associated periodic syndrome (CAPS) and in Phase III for gout. Officials make no bones about their goal of becoming a FIPCO; pushing Arcalyst to market in gout would get them a lot closer. -- A.L.

Triple Check that Scorecard: Lessons from the Links for Health Care Reform?

These days, insurers are widely depicted as the villains in health reform, a group that takes advantage of enrollees in ways both known and secret.

But the pharma industry has buffed up its image, coming in as a generous player and offering $80 billion over 10 years toward making reform work. That figure will require great sacrifice and is a number we can count on, pharma assures us.

Now comes a lesson from the links that gives us pause.

As we learn today from NPR's Marketplace, Behavioral economist Dan Ariely recently surveyed 17,000 golfers from a number of industries. He asked them to report how often they cheat at golf. He also asked them to rank how honest their industry is compared to others.

His premise is that golf can offer insights into business world attitudes. Like many business fields, golf has "lots and lots of rules," and players have some individual latitude to decide which rules to bend and which corners to cut.

Turns out "that people in the pharmaceutical industry cheated a lot, but they also said their industry is the most honest there is," he reports.

[A transcript and podcast of the Marketplace segment are available here.]

And "the most honest quite surprisingly were people from the insurance industry," he said. When host Kai Ryssdal seemed startled, Ariely added: "Could you believe it? Yeah, they cheated…it turns out they thought they were not particularly honest as an industry, but in our sample, they cheated the least."

Another finding: individuals in law enforcement, education, government, sales, marketing and advertising all cheated at about average rates. But the first three groups think they're among the most honest, while folks in the sales, marketing and advertising "think they come from industries that are much less honest."

People also felt better about cheating earlier in the game, and in writing down wrong numbers on their scores than in adding them up incorrectly once written.

It remains to be seen, of course, how many mulligans we'll be taking on health reform.

- Denise Peterson

image from flickr user chispita_666 used under a creative commons license

While You Were Throwing Snowballs

At least on the East Coast, March has apparently lived up to its reputation and come in like a large cat. Here at IVB we're not so much concerned with the way it begins and ends, but instead would rather focus on the Madness in between.

Speaking of madness: while you were making snowmen ...

• That Sebelius/HHS announcement that made so much news this weekend? Ramsey Baghdadi had the scoop for the IN VIVO Blog.
  
• Art imitates life imitating comedy imitating sad state of the world: Pharma Giles at PharmaGossip.
  
• Wyeth's Prevenar approved in Russia.
• Roche scheme to enhance Pulmozyme compliance probably needed a little more thought, don'cha think? The company has now been censured in the UK for giving out Toys R Us gift certificates to children on the drug, reports the FT.
  
• Actelion's application to expand Tracleer's use into PAH patients with less severe disease greeted with a complete response letter from FDA. FDA says Actelion's REMS first needs to be finalized and approved before it can finish its review of the sNDA.
• Have higher regulatory hurdles affected investment in early-stage Type-2 diabetes companies? VCs weigh in at The Pink Sheet.
  
• Offenses across the NFC East are breathing easier. Sadly, Brian Dawkins, no longer an Eagle, signs 5-year deal with Denver Broncos.
  

While You Were Getting Your Guthrie On

Welcome to the Inauguration Edition of your (long) weekend roundup here at the IN VIVO Blog, and remember: this blog was made for you and me. On to the news!

So, while you were bird-watching ...

• Is Lundbeck considering a takeout of up-for-sale Elan? According to The Independent it is, but the paper doesn't name any sources. (h/t Reuters) But after the Flurizan debacle it seems like a strange move to us, despite the therapeutic area tie up in CNS. Lundbeck is 70% privately owned, however, and so mightn't have difficulty moving forward with a deal if its investors are on-side.
  
• Swiss biotech Arpida received an FDA 'complete response' letter for its NDA on the intravenous version of its antibiotic iclaprim. FDA, says Arpida, is requesting new clinical studies. The drug was dinged by FDA's advisory committee back in November.
  
• Galapagos and GSK expanded their alliance in anti-infectives to cover three additional targets, triggering a payment of €2 million to the Belgian biotech.
• Put down the knife, and STEP AWAY FROM THE PEANUT BUTTER.
• What? Football? Well that didn't go very well, did it? Congratulations to the Steelers and the Cardinals and their fans.
  

Deals of the Week Loves A Parade

Have you heard? There's a parade in Philadelphia today. Maybe it's going on as you're reading this (streaming video feed here)! How about that?

Beyond the obvious occasion of the Philadelphia Phillies' World Series victory (woooo hoooo!) there are other reasons for a parade, you see. You mightn't have noticed, but today is DOTW's first birthday. Much thanks goes to Ellen Licking whose keen and often lovingly acerbic observations fill this space most weeks.

Which reminds us to make a programming note: we'll be stretching the format a bit in the coming weeks and introducing you to our Deals of the Year Top Ten Countdown. (We hear World Series MVP Cole Hamels did last night's Top Ten on Letterman, BTW. Just sayin'.) Got any favorites? Make your case in the comments!

Oh yeah, and it's Hallowe'en!

We're going to skip the weekly wrap-up this week--at the moment we have a bit of a one-track mind. But never fear: we won't go all Bud-Selig on you and suspend this post two-thirds of the way through. Just like Brad Lidge (video), there's no stopping your weekly Closer. Forthwith, a parade of deals unlike any others, for they are:


Clinical Data/Avalon: Biomarker aggregator Clinical Data continued its acquisition spree this week (the week the Phillies won the World Series), snapping up Avalon Pharmaceuticals’ biomarker discovery capabilities and a pipeline of potential oncology compounds for $10 million in stock. The transaction also included a private placement of Avalon stock, a $3 million term loan to Avalon, and an exclusive license to its biomarker platform. For struggling Avalon, the deal is a bailout that will allow it to continue development of its therapeutics, including drug discovery partnerships with Merck and Novartis. For Clinical Data, the deal is part of its ongoing plan to develop and acquire key biomarkers of drug response, to enhance its bargaining position with potential drug development collaborators and as an in-licenser. We discussed their strategy in an IN VIVO feature story on biomarkers for psychiatric drugs in July, when we focused on Clinical Data’s Phase III drug vilazodone, which it acquired from Merck KGAA via the acquisition of Genaissance Pharmaceuticals in 2005. Shortly after that story ran, Clinical Data bought Adenosine Therapeutics in an $11 million cash deal that also included issuance of $25.2 million in promissory notes. Adenosine brought it preclinical drug candidates in cardiology, diabetes, inflammatory diseases, and sickle cell anemia, around which it expects to use its biomarker expertise to target likely responders, and Stedivaze (apadenoson), an experimental adenosine-based stress agent for myocardial perfusion imaging. These deals, along with earlier pick-ups of biomarker developers Epidauros, Genaissance, and Icoria, reflect the opportunistic attitude of Clinical Data’s chairman, Randal Kirk, which has transformed the company over the past three years. It also shows that with biotech assets available on the cheap these days, even for smaller companies, if they’re willing to spend their cash or are in a position to extend short-term credit, it’s a good time to be identifying opportunities.--Mark L. Ratner

GSK/Genelabs: GlaxoSmithKline PLC said on Thursday (the day after the Phillies won the World Series) it was acquiring the hepatitis-focused infectious disease play Genelabs Technologies for $1.30/share, approximately $57 million. The deal, by GSK's infectious diseases CEDD, brings the Big Pharma a bunch of HCV-focused assets in research, lead, and preclinical stages. GSK already has rights to Genelabs Phase II Hep E vaccine, which was in-licensed by then-SmithKline Beecham waaay back in 1992. A Phase III SLE candidate, Prestara, has been in development since the early/mid '90s; Genelabs received an FDA approvable letter for the candidate in 2002 and two Phase III trials later the company had been looking for a development partner to conduct further clinical work. That the companies' release doesn't mention Prestara probably shouldn't therefore be a surprise. GSK instead heralds Genelabs' early stage work in HCV, which will give it a drug discovery platform in this hot therapeutic space.

Merck-Serono/Theratechnologies: Canadian biotech Theratechnologies said on Wednesday (the day the Phillies won the World Series) that it licensed to Merck-Serono US rights to tesamorelin, a Phase III treatment of excess abdominal fat in HIV patients with lipodystrophy. Theratechnologies will receive a license fee of $22 million, an equity investment of $8 million (at C$4.73/share, a 130% premium on the previous day's close) plus milestone payments and a royalty on net US sales. Theratechnologies will continue to develop tesamorelin for additional indications, which M-S has the right to option (and thus pay equal development costs). Theratechnologies holds an option to co-promote tesamorelin in additional indications. Merck-Serono has a bit of history in HIV-related lipodystrophy, though not the particularly good kind. In 2003 then-Serono paid the US Justice Department a whopping $704 million in a settlement related to the company's alleged illegal promotion (in lipodystrophy and other areas) of its human growth hormone Serostim, which is approved for HIV-related cachexia.

Cephalon/Acusphere: Expect to hear about more deals like this one that escaped us last week (the week before, well, you know): cash-desperate Acusphere, a drug delivery specialist, granted Cephalon an option to license its ultrasound contrast agent Imagify, which is awaiting an FDA decision next February, as well as an exclusive WW license to its preclinical injectible version of celecoxib, AI-525. (The Pink Sheet Daily's coverage of the deal is here.) Essentially a complex deal boils down to this: Acusphere gets $20 million from Cephalon upfront (comprising a $15mm senior secured convertible note and $5mm cash for AI-525) so it doesn't go bust before FDA weighs in on Imagify, and Cephalon gets a very good price on a product candidate that--if it had to wait until post-approval or post-Advisory Committee (which is scheduled for December 10th), would certainly be a lot more expensive. If Cephalon exercises its option, that triggers a $40mm payment to Acusphere upon approval and a double-digit royalty on net sales.

Celgene/MethylGene: The rising tide of Philly baseball supremacy couldn't lift all ships this week. Call this the honorary Tampa Bay Devil Rays no-deal of the week. Montreal-based MethylGene has fallen on hard times now that Celgene has decided to pull out of a 2006 licensing agreement with the biotech. (That deal was originally inked by Pharmion, which was acquired by Celgene in late 2007.) As a result of the decision MethylGene will halt basic research, layoff about half its employees, and focus its resources on its three lead drug candidates: MGCD0103, '290, and '265. '0103, the lead project in the Pharmion/Celgene collaboration, has been under a clinical hold since August, when the company reported 19 instances of pericarditis or pericardial effusion in trials of the HDAC inhibitor. MethylGene is confident it can convince FDA to lift the hold, though it has not yet met with FDA to do so. The Pink Sheet Daily's coverage of the deal is here.

image: philadelphia inquirer/Michael Perez

While You Were Homering

There were nine home runs hit at Citizen's Bank Park this weekend--seven by the good guys and three of those courtesy of the man pictured above. The Fightin's took games three and four to take a 3-1 Series lead and game five is tonight at the Bank. One more. Please?

We know you come here for more than just baseball coverage on Monday morning (yes, the Eagles and Flyers also won), and there was plenty of action on the drug development front at both ICAAC and ACR. We'll unpack some of it below, in your weekly roundup of weekend events that happened on the weekend this week that weren't sports-related.

While you were crossing your fingers ...

• The news out of the joint Infectious Disease Society of America/Interscience Conference on Antimicrobial Agents and Chemotherapy is coming thick and fast. Just a taste: data from Rib-X here, on Merck's Rotateq here and Isentress here, and on Progenics' PRO140 here. The co-conferences run through tomorrow: more infectious disease news than you can shake a stick at, here.
  
• Plenty of arthritis news out of the American College of Rheumatology meeting in SF as well. Wyeth talks up Enbrel's advantages over DMARDs here, Roche's Actemra's positive Phase III data discussed here, and Reuters reviews the outcome of trials of JNJ/S-P's golumumab here. More ACR headlines here.
  
• EyeonFDA points us over to Covalence's quarterly rankings of ethical companies, where GSK leads the way among pharmaceutical companies (while BMS is apparently making the most 'progress'). But with no pharmas cracking the top ten that probably isn't much to crow about. Like winning the NL West.
  
• mmm, beer. mmm mmm, beer that's good for you?
• It wasn't just ICAAC and ACR on the clinical acronym front this weekend. The EAP (European Academy of Pediatrics) got in on the action as well. At EAP, Ikaria Holdings (a quite interesting biotech focused on therapeutic gases--read more here) announced Phase III results from a trial of inhaled nitric oxide for the treatment of bronchopulmonary disease (BPD) in premature babies, though sadly the treatment unexpectedly failed to show any benefit.
• Ben Goldacre's Bad Science column this weekend highlights the work done by ClinPsych blog examining "yet another small print criticism of a trivial act of borderline dubiousness which will ultimately lead to distorted evidence, irrational decisions, and bad outcomes in what I like to call 'the real world'". What's that, exactly? The duplicate publication of positive data on Lilly/Boehringer's duloxetine (Cymbalta). Last week, the drug was turned down in Europe today as a treatment for fibromyalgia.
• Why Can't Us?
  

image from World Series game 4 by flickr user mjkmjk used under a creative commons license.

While You Were Advancing

Despite Saturday's game three hiccup the Fightin' Phils advanced to the NLCS this weekend with a 6-2 win over Milwaukee to cap a 3-1 NLDS victory, taking the sting out of another Iggles loss at the Linc. (Celebrate while you can, Ramsey, St. Louis is tough coming off the bye week ... OK maybe not.)

It's nearly enough to take one's mind off the economic crisis--now spreading even further--and the potential impact that broader financial malady might have on the health care world. For those of you keeping score at home more than two out of three of our respondents agree that the industry universe is shrinking.

While you were dusting off your Beat L.A. signs from 1983 ...

• We get a lot of crazy ideas (support of Philadelphia sports teams can do that to blogger) so we're not normally ones to throw too many stones. But we simply can't get our heads around this 'fast track IPO' proposal described in this Guardian article from last week. Please, anyone, explain it to us. Does this make any sense whatsoever?
• OSI and Genentech report that Tarceva plus Avastin didn't improve survival in advanced non-small cell lung cancer patients better than Tarceva alone, though there was a clear improvement in progression-free survival.
• Genome sequencing is getting cheaper. Harvard's George Church, an adviser to Complete Genomics, the company that this morning announced it could lower the cost of sequencing your As, Ts, Gs and Cs to a cool $5k, called the price "shockingly low." In this economy, George? Call us when we can buy a kit at the Dollar Store.
  
• Biolex this morning bought OctoPlus's 50% commercial rights to the companies' Locteron interferon alfa, which is in Phase II in HCV. Octoplus gets $11mm upfront and up to $138mm in milestones. Meanwhile Biolex also said it raised $60 million in Series D funds in a round led by Clarus Ventures.
  
• Oh yeah. It seems Lilly is buying Imclone. You may have heard about this one. But why do we feel like there's going to be a some sort of Scooby-Doo-esque plot twist at the end of this too-long drama? As of 5a ET still no official word from the companies nor any last minute rubber mask reveals or muttering about getting away with it if it weren't for those meddling kids. Yet. [UPDATE: 7am, and it's official. the deal values Imclone at $6.5bb, or $70/share.]
  

game 2 photo from flickr user nickhall used under a creative commons license.

While You Were Pursuing Happiness, and a Wimbledon Championship

We hope our US readers enjoyed the long holiday weekend, and did your part to pursue happiness. We dodged raindrops on the Jersey Shore and took in the amazing action at Wimbledon (a condensed version of the fifth set is embedded above if you've got 20 minutes to kill), which oughtta qualify.

• The New York Times asks the hard questions about Genentech and Roche's Avastin, specifically, when does a drug's high cost and modest efficacy combine to make doctors and patients think twice about its worth?


• The Philly Inquirer notes that researchers writing in Nature Medicine are hoping that work in mice with tuberous sclerosis complex (TSC) holds the key to a variety of learning disorders.


• According to a Phase III study from Teva, doubling the dose of Copaxone doesn't result in better efficacy (though safety and tolerability didn't seem to be an issue).


• Investors apparently don't like German dialysis specialist Fresenius' proposed $3.7 billion acquisition of injectible products play APP, according to this Reuters report. The WSJ has the story here.
  
• Angiotech is spinning out its Taxus royalty stream and other assets into a new business with financing from Ares Management and New Leaf Venture Partners.

While You Were Cheering on the Celtics

Yes, yes, yes, the rolling rally for the World Champion Boston Celtics was Thursday, not this weekend, so the typical "While you were.." parameters might not apply. And, IN VIVO Blog hears that Boston sports teams and their fans aren't all that popular these days, so it's unlikely many of you were cheering for the Green anyway.

But Mark Wan, general partner of Three Arch Partners, was cheering, and we've got pictures (courtesy of the Boston Globe.)

Wan, the cross-armed fellow in the Celtics Green T-shirt, is part of the ownership team that includes many life sciences/

venture capital types including Wyc Grousbeck, Highland Capital Partners, Richard H. Aldrich, Senior Vice President and Chief Business Officer, RA Capital Associates; David Bonderman, Managing Director, Texas Pacific Group; James Breyer, General Partner, Accel Partners and many others.

No doubt, Wan hasn't faced this big or energetic a crowd since he attended one of our medical device conferences.


Now, onto some news from this weekend.

Eli Lilly might hire a few Duck Boats itself if the FDA gives a thumbs up this week on use of its anticlotting drug prasugrel. The Wall Street Journal says analysts aren't ready to hop on Lilly's bandwagon just yet, in some cases giving Lilly slightly better than a 50% chance of getting approval. That's okay, seven out of eight of ESPN's so-called experts picked the Lakers.

European pharma execs are at a bit of a loss. The International Herald Tribune reported on the gloomy mood from the European Federation of Pharmaceutical Industries and Associations where executives at top European pharmaceutical companies wondered how to stop the industry's tailspin. Diversification? Increased R&D? Everything is on the table.

According to the The Wall Street Journal, Merck and Schering-Plough got a dose of bad news/good news regarding US prescriptions for their co-marketed cholesterol drugs, Vytorin and Zetia. IMS Health Inc. says sales of the drugs slipped in May, but at a smaller rate than in previous months. Prescriptions for the two drugs dropped 1.1% to 2.5 million last month after declining 23% since January. The drugs began taking a dive when data from an "Enhance" trial showed showed that Vytorin, which is a combination of Zetia and the generic drug simvastatin didn't perform any better than simvastatin alone "at slowing thickening of the arteries despite producing a greater decline in bad cholesterol." Simvastatin was once known as Merck's Zocor before its patent expired in 2006.

Finally, the Corn Refiners Association wants you to have a Coke AND a smile.

Deals of the Week: Play Ball

Fans of peanuts, popcorn, and Joe Torre bobbleheads unite. America's national pastime is again underway. (Contrary to popular opinion, it's NOT bashing pharma.) On March 30 President Bush threw out the ceremonial pitch at the Washington Nationals' home opener; the pitch wasn't bad but the crowd booed loudly anyway.

Schering Plough's Fred Hassan and Merck's Dick Clark can probably emphasize with POTUS. The stocks of both companies took a beating this week after results of the long-delayed ENHANCE study were finally presented at the ACC meeting in Chicago. Following the presentation of data showing that Vytorin does not lower the risk of heart attack more than generic statins, a panel of four independent cardiologists opined that the results meant the drug should be used less often. And then the gloves came off, as the soap opera escalated into a "he said, he said" affair played out in the blogosphere. (Seems like at least one phama exec could use a review of basic kindergarten etiquette.)

In other news, Pfizer also struck-out, announcing that it's antibody-based drug, tremelimumab did no better than conventional chemotherapy in treating patients with advanced melanoma judged to be surgically incurable. Medarex and its partner Bristol-Myers Squibb also got caught up in the fall-out: some industry experts doubt their ipilimumab, also in Phase III trials, will prove effective given that it has a similar mechanism of action to the Pfizer molecule.

And with that, it's clearly time for the seventh inning stretch...or maybe simply a break from the baseball metaphors.

Takeda/Cell Genesys: Cell Genesys tied up its Phase III GVAX Prostate immunotherapy with Takeda in a deal worth $50 million upfront and an additional $270 million in milestones. In addition, Takeda will pay Cell Genesys tiered, double-digit royalties based on net sales of the GVAX immunotherapy in the US; in all other regions, Cell Genesys will receive flat double-digit royalties. Just as important, going forward Takeda will pay for all external development costs associated with the the immunotherapy's clinical development and will also pick up the tab for all additional development and commercialization costs. For more on why the deal makes financial sense for Cell Genesys check out this post from earlier in the week and our coverage in the April issue of IN VIVO.

Teva/Bentley Pharmaceuticals: The Israeli generics monolith is at it again. This time the acquisitive Teva acquired Bentley Pharmaceuticals, a generic maker with a strong presence in Spain, in a deal worth about $360 million. For Teva, the driving factor behind the deal was its desire to boost its presence in sunny Spain, where generics are one of the fastest growing sectors of that country's pharmaceutical market. Wachovia Capital Markets analyst Michael Tong told Reuters that the deal further reinforces Teva's position to be "best in class" in generics. "The potential growth of generic utilization in international markets represents a key growth driver for generic drug companis in the near to intermediate term," he said. Curious to know more about Bentley? Check out this article from 2003, when we chronicled the New Hampshire-based company's hard-driving strategy to exploit Spain's intellectual property loop-holes.

Paul Capital Healthcare/Plethora Solutions Holdings: Plethora Solutions, which develops drugs to treat various urological conditions, is celebrating a plethora of riches thanks to a financing agreement reached with Paul Capital. As part of a revenue interest financing agreement, Plethora could receive up to $28 million from the international healthcare fund, which has invested more than $900 million in the biopharma and medtech sectors. Upon signing the deal, Plethora will receive $15 million upfront, which the company says it will use to fund late stage trials of two drugs, PSD502 to treat premature ejaculation, an PSD510 to treat erectile dysfunction. In return for Paul Capital's generosity, Plethora has agreed to pay the firm revenue interest generated based on the sales of PSD502, PSD510, and ErecAid. Financings of this kind have become more common in recent months as private equity plays flush with cash look to deploy their riches to needy companies who aren't feeling the love from the public markets.

LATE UPDATE: Plethora isn't the only firm in some cash-for-royalties action this week. Just this morning we noted VIVUS Inc.'s deal with Deerfield Management, coincidentally also in the ED space. Deerfield is providing $30 million for Phase III studies of VIVUS's PDE5 inhibitor avanafil in exchange for $10 million worth of the biotech's stock plus a royalty on sales of the biotech's already marketed ED treatment alprostadil (MUSE) and potential royalties on avanafil. Interestingly, VIVUS has retained the rights to buy back the royalty stream from Deerfield at a set price of $25 million during the first three years of the deal, and $28 million during the fourth year (that option cost Vivus $2 million).

(Image via Wikimedia Commons)

While You Were Almost Upsetting

We've been told by certain football (soccer) fans that there are not enough allusions to the beautiful game in our weekend roundups. So as equal opportunity sports enthusiasts we thought Saturday's FA Cup fourth round near-upset of Premier League giants Liverpool by the part-timers from the curiously named Havant and Waterlooville away at Anfield warranted a mention. (And hey it's the NFL's ridiculous weekend off anyway.)

Even though they lost 5-2, this team of teachers, builders and trash collectors (not sure if there are any pharma bloggers on the team, but who knows maybe the mysterious Insider from Pharmagossip plays for them) led twice and gave one of the top teams in Europe quite a scare, at least in the first half.

What else was going on this weekend?

• Vytorin snafu: New York State AG Andrew Cuomo piles on. More at Pharmalot.
  
• Ben Goldacre highlights a few recent studies about publication bias (including one concerning SSRIs from last week's New England Journal of Medicine). Your indispensible Bad Science is here.
  
• Our Vytorin poll is closing today. Vote here.

Here's Looking at You, Barry

Genentech held its mega-Christmas party this past weekend. This year's venue: AT&T Park, home of the San Francisco Giants and, until recently, home field for the star slugger Barry Bonds. The day before, Bonds pleaded not guilty to charges that he'd lied to federal investigators about taking steroids.

Nice timing for the makers of human growth hormone, don't you think?

Forsight Scores Big

With the Red Sox and Indians facing off in the American League Championship Series, IN VIVO Blog would like nothing more than to toss in an old baseball metaphor to describe how well investors in Forsight Labs second company did with their investment, but even the ever popular grand salami falls a bit short.

So with the shameless favorite sports team plug firmly inserted, we can go on to tell you that Forsight Newco II, founded just 10 months ago, raised approximately $5 million from investors to cover costs of product development and some early clinical testing of the company’s drug-eluting ocular punctual plug, a technology that can deliver drugs through the eyes’ own tears. For a video showing the product go here.

Now, just 10 months after the company’s inception, QLT stepped forward to pay $42 million upfront for the company. But the potential returns don't stop there. QLT also agreed to pay $5 million payment upon the initiation of phase III clinical trial for the first product; $20 million for the first commercialization of a product; $20 million for the commercialization of a second product; and $15 million on first commercialization of each subsequent product.

For those keeping score at home, that’s $67 million if QLT succeeds in getting one of these products on the market; $87 million if it gets two; $102 million for three and so on. To be sure, all of these potential payments are years off. QLT will need a few years to run the plugs through clinical study and isn't likely to get a product to market until 2011 or 2012.

QLT management is being criticized for overpaying, but Bob Butchofsky, president and chief executive officer of QLT, says the company’s punctual plug, which is inserted in one of the two ducts that drains tears from the eye, will put QLT in position to challenge the $6 billion eye drop market.

Unlike standard punctual plugs, which only slow the drainage of tears from the eye as a means of treating dry eye, QLT’s new plug contains a drug core. As the tear film flows against the plug, the drug is released delivering a steady stream of drug. The Newco identified glaucoma as a first application for the device, but the plug could be used to deliver any drugs currently delivered as eye drops. “I believe this is a start of a major change on how we treat ocular disease,” Butchofsky told analysts in a conference call this morning.

Others aren’t as impressed. QLT shares hit a 52-week low today after the deal was announced. An item on the Globe and Mail web site reported:

National Bank Financial analyst Prakash Gowd calls the deal pricey, citing “very limited data supporting the theoretical benefits of [ForSight’s] punctal plug technology. Moreover, he figures the technology is likely to be a “very competitive area and patents have not yet been clarified.”

QLT must be high on the technology as it made the only real bid for the company. Forsight CEO K. Angela Macfarlane says while Forsight had talks with other companies about its various programs, Newco II wasn’t being shopped around. (Curious about Forsight's first product? Go here.)

Robin Bellas, general partner at Morgenthaler Ventures, one of the investors, called the acquisition, "quite a surprise. We always expected to raise another round. It was unusual that QLT came to us and expressed strong interest in the program. We had no plans to sell it.”

For more about Forsight Labs go here.

While You Were Winning the NL East!

M-V-P

How 'bout them Phillies! Could we be heading for an intrablog standoff between IN VIVO's Philly and Boston contingents? Only time will tell...

Sorry for the late and skinny weekend roundup; our flight was delayed several hours returning to the UK after the PSA conference and we were too excited about the Phillies victory (and frankly, without an easy internet connection) to post yesterday.

So we'll keep it short:

• Vernalis' and Endo's Frova hits the wall. The migraine drug's second time around at FDA--its supplemental NDA for expansion of its label into menstrually associated migraine--turned ugly over the weekend when the agency sent the companies a surprise "Not Approvable" letter. As one analyst told IN VIVO Blog today, "there's a lot of egg on a lot of faces" at Vernalis and Endo. The companies had been extremely optimistic about the drug's label expansion prospects.

(AP Photo/Tom Mihalek)

Going, Going.....Google

Two bits of follow up on previous posts about the health care IT space.

AthenaHealth absolutely hit one out of the park with its IPO.

Shares opened at $18 and nearly doubled, hitting $35.50. This could be a big win for its VC investors including Oak Investment Partners, Venrock Associates, Draper, Fisher Jurvetson and Cardinal Partners. All together the four owned 65% of the company prior to the opening. IN VIVO Blog talked about the importance of this IPO back in June.

Meanwhile, speculation abounds that Google, in a bid to bolster its presence on the Web, is eyeing an acquisition of health care Web site leader WebMD. Last month, IN VIVO Blog admitted to being slightly underwhelmed by the early glimpses of Google's health offerings.

Apparently, we're not the only ones. Dan Penny, director and lead analyst for publishing Outsell Inc., a market research firm focused on the publishing industry, writes:

Implications: The discovery in 2005 that 12% of individuals would consult Google before seeing a doctor has sent a message to the search giant that it should be doing something with health information, but it doesn't seem to know how to add value to an area where others have stolen a march. Google Health, as it stands, is a confusing experiment that offers little more than an old-fashioned portal for health information. Google now realises that it needs to do more than aggregate, because the boom in online health information has sent users flocking to WebMD and similar sites, such as AOL Health and RevolutionHealth. A year ago, the idea of Google acquiring WebMD would have seemed rather bizarre, but since the purchase of YouTube, Google has proven its willingness to spend, and to spend on content as well as technology. Moreover, its rival, Microsoft, bought Medstory earlier this year in a clear attempt to secure some of the healthcare vertical for itself.

Oh yeah, and Google's health care push probably wasn't helped by the fact the fellow in charge of the effort is leaving.

Now back to your regularly scheduled programming....

While You Were Finally Watching Some Football

Autumn's here, and the NFL is back. IN VIVO Blog's contingent of Philadelphia Eagles fans is predictably feeling a little uneasy about the season ahead. Meanwhile, here are a few odds and ends from the weekend.

• More GSK hand-wringing in the UK papers, this time it's the Financial Times. (Hat Tip: Pharmagossip.)
  
• Hey look, free access to medical journals. (via the NYT)
• The SF Chronicle looks at personalized medicine, and how the FDA is encouraging drug developers to find genetic patterns in responses to treatment.

(Photo by Jonathan Daniel/Getty Images)

While You Were Making History*

755*

IN VIVO Blog picked up on a few news items you may have missed over this fine summer weekend.

• The irony. Foot and mouth disease is back in Britain--though so far confined to a small area near the twin Pirbright laboratories of the UK's Institute for Animal Health and Merial Animal Health (a veterinary JV between Merck & Co. and Sanofi-Aventis).


• The agony. Mannkind is having trouble licensing its inhaled insulin product, the company's CEO said on Friday. The company's shares fell like they were whacked over the head with an Exubera bong. Wait, they were?


• The ecstacy! OK maybe not ecstacy, because we couldn't find anything resembling such excitement. But spending $16 billion (or selling out for $16 billion) must feel pretty good. The WSJ is reporting this morning ($ sub. reqd.) that Akzo Nobel is spending its Organon cash as ICI will accept a sweetened takeover offer.
  

(AP Photo/Chris Carlson)

While You Were Running with the Bulls

That's gonna leave a mark

A few notes from the weekend that was ...

• Satisfaction Gauranteed! Can pharmaceutical firms profit with variations on the no-cure-no-pay strategy? The New York Times takes a look. Incidentally, if that sounds familiar you may have read another take on that issue on the IN VIVO Blog about six weeks ago ... and there'll be more in the next issue of IN VIVO.
  
• Accept No Substitutes! The San Francisco Chronicle reviews the pros and cons of generic biologics. Biosimilars? Biogenerics? Whatever you're calling them these days.
  
• For Refined Tastes! Tom Wolfe won't be reading this. And IN VIVO Blog thinks white suits look pretty damn silly, so we're even.


• Breaking Hearts Since 1883! The Philadelphia Phillies, favorite baseball team of a few of us at the IN VIVO Blog, lost their record 10,000th game last night, falling to the Cardinals 10-2. That ignominious milestone got us thinking ... is there a parallel in the pharmaceutical world, a company with a particularly striking blend of poor luck and staying power (and bad pitching)?

(AP Photo/ Inaki Porto)

While You Were Dominating the Competition

If you were too busy playing in the Wimbledon semis and finals this weekend (or maybe just watching) to keep up with the news, IN VIVO Blog is here to help.

• Inhibition! Some news out of the International Society on Thrombosis and Haemostasis in Geneva this weekend. First up, Bayer's rivaroxaban was significantly more effective than Sanofi-aventis' Lovenox in preventing blood clots after knee surgery, Reuters reports. Rivaroxaban, a Factor Xa inhibitor, is being developed with Johnson & Johnson. Another Factor Xa inibhitor, Pfizer and BMS' apixiban (which is approximately a year behind rivaroxaban in development), also posted solid results, in a mid-stage trial. Reuters has the story.
  
• Indecision! UK's National Institute for Clinical Excellence (NICE) has changed its mind, and now considers Eli Lilly's Alimta cost-effective in treating mesothelioma in certain patients.


• Interference!! Roche and Alnylam announced this morning a broad alliance in RNAi therapeutics, worth up to $1 billion. Alnylam gets $331 million up-front in cash and equity payments. We hope you're not all RNAi'd out cause there'll be more on this later ...