Friday, December 14, 2007

Deals of the Week: Beyond Biogen

Most of the chatter over the past few days has been about you-know-who and the deal that wasn't. Or the Novartis pink slips. Or the letter written to Schering-Plough and Merck by a couple of Michigan congressmen. But plenty of ink dried elsewhere this week, and we know that you know that we know that you've grown to expect Deals of the Week to talk about deals, not so much the deals that didn't happen, the layoffs, or the House Committee on Energy and Commerce. And damnit, we're not going to let you down.

  • Eisai/MGI Pharma: We wrote a bit about this acquisition on Monday, and look for more in the January issue of IN VIVO. The short of it is this: the price tag, at $3.9 billion, suggests more than a little competition for the oncology/acute care specialist, and following on the heels of Celgene's $2.9 billion acquisition of Pharmion only a few weeks ago, reinforces our view that consolidation in the specialty pharma space will continue. And although the deal is by far the largest acqisition of a non-Japanese company by a Japanese pharma, perhaps it is not predictive of a wave of similar deals. Eisai boasts more of a US base, and we're told therefore, more of a dealmaking culture than its compatriots.

  • Boston Scientific/Avista Capital Partners: Consider this the other shoe. Boston Scientific officials promised during their round of conference presentations last month that they’d be announcing the sale of its fluid management and venous access business sometime this month, and they did just that. The Natick, Mass. company agreed to sell the business to private equity firm Avista Capital Partners, $425 million in cash. This sale is be the last significant piece of their wholesale restructuring that would cut costs by $500 million and trim its headcount by 12% to 13%, and it’s a nicely matching bookend to last month’s sale of its cardiac and vascular divisions to the Getinge Group for $750 million. Analysts covering the company say the restructuring should help Boston Scientific go forward with its cardiovascular and cardiac rhythm management businesses. The cash also could come in handy to pay the $1.15 million Boston Scientific will pay to Advanced Bionics Corp. for its pain management program, a result of the nasty break up between the neurostim company and its one-time acquirer. Read more in the upcoming IN VIVO magazine.

  • GSK/Oncomed: GSK's external development CEEDD and Oncomed inked a strategic alliance to discover and develop up to four antibody therapeutics against cancer stem cells, emerging oncology targets discussed in depth in this 2006 START-UP feature. The potential biobucks deal value is enormous, but the upfront payment, which is a mix of licensing fees and an equity stake, is undisclosed. Oncomed will handle development through clinical proof-of-concept, at which GSK has an option to license the MAb. The most advanced candidate, OMP-21M18, should enter the clinic next year. Bonus GSK: The pharma also teamed up with Belgian biotech Galapagos this week, paying €3.5 million in technology access fees plus milestones and 'double-digit' royalties to tap Galapagos' natural product discovery platform in the anti-infectives space.

  • Shire/Alba: Prolific dealmaker Shire strikes again, landing ex-US, ex-Japan rights to Alba Therapeutics' AT-1001, an inhibitor of barrier dysfunction in GI disorders. The peptide is in Phase II for Celiac disease and Shire will have a look-see at Crohn's disease and other potential indications as well. Alba scored solid terms: $25 million in up-front payments plus milestones and royalties. In other Shire news, in the understated press release "Board Changes," the company said CEO Matt Emmens is stepping down, er, up, to the chairman's role, replacing retiring chairman James Cavanaugh. CFO Angus Russell will succeed Emmens next June. Somehow we doubt this is Emmens' last deal in the drivers' seat.

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