Friday, February 29, 2008

Deals of the Week: the Good, the Bad and the Ugly

We're usually bad-news-first kind of bloggers, but that's not how the old spaghetti western poster reads, so you'll just have to wait. It was a bit of a mixed bag this week for the industry, with a couple of solid slugs of clinical data from Novartis (its mTOR inhibitor everolimus impressed in a Phase III study) and Alnylam (Phase II data for ALN-RSV01 were positive). AZ even got approval for Nexium in kids aged 1-11 (at $164 for 30 capsules those kids are gonna have to sell a lot of lemonade). Bad news, typically, seemed easier to come by: Lilly's long-acting Zyprexa injection was deemed not approvable, Elan and Biogen's warned docs of Tysabri liver damage potential, FDA decided to scrap its anti-infectives panel meeting to the chagrin of Basilea and Theravance, and AZ's lung cancer drug Recentin failed its pivotal study. On top of all that, a few entire classes of drugs (antidepressants, EPOs) had pesky and problematic meta-analyses to contend with. Pfizer's pitchman Dr. Jarvik row, row, rowed gently down the stream (but not before Pharmagossip unearthed this hilarious 1986 Playboy article about the artificial heart pioneer). And then there's the ugly:

As we mentioned earlier this morning: the heparin story continues to get worse, and if we see any more pictures of pig intestines in China we are going to be sick. But lets forget all that for just a moment. Lets get to the point of this rambling post. Lets settle in.

Because you see, in this world there's two kinds of people, my friends ... those with loaded guns, and those who dig. You dig ...
Galderma/CollaGenex: Galderma’s $420 million tender offer on Tuesday for CollaGenex marks the third recent major acquisition of a specialty dermatology company, joining Nycomed/Bradley ($330 million, in October 2007) and Almirall/Hermal (July 2007, for $518 million) as part of a trend initiated in October 2006, when Steifel Laboratories bought Connetics for $640 million. The CollaGenex deal, at a 30% premium to its recent price and a 100% increase over the company’s stock price less than four months ago, was the result of a competitive bidding process, according to the company. “The price tag reflects how hungry the dermatology companies are for assets,” notes Leerink Swann analyst Gary Nachman. The merger will place two products often used in combination under the same roof: Galderma’s topical rosacea drug MetroGel, one of the privately held company’s key branded products, and Collagenex’s Oracea, the first systemic drug for treating rosacea. Approved in the US in July 2006, Oracea, a low-dose, delayed release formulation of doxycycline that works as an anti-inflammatory but not an anti-bacterial drug, will comprise $50-51 million of CollaGenex’s projected $61-62 million revenues for 2007. Galderma also gets an 80-person sales force, and with an existing US commercial presence, it should be able to experience some cost savings through the combination. (Medigene holds the EU rights to Oracea.) Galderma could further bolster its rosacea franchise down the road with CollaGenex’s COL-118, a formulation of the ophthalmology drug brimodine, expected to move into Phase III in mid-2008 as the first potential treatment for erythema, the skin redness associated with rosacea. Galderma also gets Collagenex’s early Phase II vitamin D analog becocalcidol, licensed from QuatRx Pharmaceuticals in May 2007, in development for mild/moderate psoriasis.

Actelion/Nippon Shinyaku: Terms of this (impending) licensing deal weren't disclosed, but nevertheless the agreement underscores the momentum in pulmonary arterial hypertension therapies--Just last week Pfizer announced it was buying Encysive, another PAH-driven deal. Today, Actelion has signed a "binding letter of intent" to license Nippon Shinyaku's novel PGI-2 receptor agonist NS-304, and is responsible for global development and commercialization of the candidate ex-Japan (in Japan, the two co's will co-develop and co-promote). The project is currently in Phase II development in Europe. Actelion, built on the back of the success of its own PAH therapy Tracleer, isn't likely taking much of a financial risk to add this orally available compound to its pipeline.

Cypress/Proprius: Cypress Bioscience said on Monday it was acquiring Proprius Pharmaceuticals, a privately held "specialty pharma company," for up to $75 million--half now, half later, based on milestones. Proprius bills itself as a personalized medicine play, with a focus on rheumatology diagnostics and therapeutics. Should those dx/rx candidates make it to market, Cypress aims to capitalize on the specialty rheumatology/pain sales force it will unleash to market its lead milnacipran fibromyalgia drug, which is being co-developed and co-promoted with Forest Labs, and is currently under FDA review. Proprius' investors didn't have to wait long for a return: the company's first venture round was last January, when it raised $11 million of a planned $17 million Series A.

And finally a bonus no-deal of the week: Wyeth has dumped its bifeprunox partner Solvay, citing commercial considerations. In a statement the jilter noted it was terminating the deal after "assessing the opportunity for bifeprunox and determining it would not have sufficient commercial value for the two companies to share." Solvay investors sent the company's shares down more than three percent. We noted Wyeth's pipeline troubles in a post last year.
soundtrack sample from Shobary's Spaghetti Westerns

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