Friday, February 15, 2008

Deals of the Week: The Song Remains the Same

Are you having a case of deja vu? We don't blame you. The main headlines this week echoed those of last week and the weeks prior.

Vytoringate reared its ugly head again. This time Congress is requesting that Internet site CafePharma reveal the identities of contributors who anonymously discussed the controversial ENHANCE trial for the Merck/ Schering Plough cholesterol drug on its message boards. Meantime, more firms announced job cuts this week; among them the drug delivery firms Nektar and Nastech, which both lost partners in high-profile divorces last year.

And here's a shocker: another pharmaceutical company has been accused of anti-competitive practices. No, we aren't talking about Bristol-Myers Squibb, which took some heat last year for its botched negotiations with Apotex over the blood thinner Plavix. Nor are we referring to GlaxoSmithKline, AstraZeneca, or Sanofi-Aventis, whose offices were raided last month by European Commission officials as part of a broad probe into possible industry efforts to delay the arrival of generic medicines. This time the industry bad guy is Cephalon, which apparently spent $200 million to delay generic versions of its blockbuster anti-drowsiness pill Provigil. (You can read the details of the FTC's suit here.)

You see? The song remains the same. Thank god, it's time for deals of the week.

AstraZeneca/ Albireo Pharma: If you feel like AZ's spin-out of its GI assets into Albireo is old news, you're right. We broke news of the rumored event back in November. On Thursday came more specifics about the new Swedish biotech, which is named after a double star in the Cygnus constellation, and has raised $27 million out of a planned $40 million Series A. The new venture inherited several early stage assets and one clinical stage compound from AZ, which maintains a significant minority stake in the company. (For an in-depth discussion of GI R&D strategies, see this story in the November IN VIVO). In their write-up of the deal, our good friends over at the WSJ Health Blog and Fierce Biotech noted that this is an example of pharma's "dis-integration," the industry's need to shed some of its weighty infrastructure, particularly in R&D. Hmmm, that ought to sound familiar to loyal Windhover readers too. (Check here and here and here for more.)

Sanofi-Aventis/Dyax: Another week, another tie-up between an antibody player and a pharma company interested in building its biologics capabilities. This week the honor goes to Dyax and Sanofi, which inked a deal Tuesday worth up to $500 million in up-front and milestone paytments. (Under the terms, Dyax could get as much as $25 million this year.) The agreement gives Sanofi exclusive rights to Dyax's DX-2240, a preclinical monoclonal antibody and cancer therapy that inhibits tumor progression via the Tie-1 receptor. In addition, Sanofi also has non-exclusive rights to use the biotech's phage display technology to discover and develop additional compounds. In addition to illustrating the continuing desire of big pharma to play in the biologics sandbox, the deal also reflects pharma's increased interest in the industry's new blockbusters, specialty products.

Newron/Hunter-Fleming: When we last checked in with Hunter-Fleming, we were quizzing them about VC reluctance to fund early-stage Alzheimer's R&D. And this week we can see the result of a tough fundraising environment for the biotech. H-F was looking to raise about GBP 7 million to finish off proof of concept studies for its lead AD treatment, HF0220, a naturally occurring human steroid that drives production of prostaglandins key for cellular protection and repair. The going back then, in September 2007, was tough. And on Monday the company was acquired by Newron for €8 million (minus net debt) in stock, plus a further potential €17 million in "success-based milestones."

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