Deals Shaping the Medical Industry
In Vitro Diagnostics
Acquisitions
Animas Corp.
Cygnus Inc.
As part of its plan of dissolution, diagnostic device company Cygnus is selling substantially all of its assets to insulin pump manufacturer Animas for $10mm in cash. (Dec.)
In its 10Q filed November 2004, Cygnus reported that it has $12.8mm in cash on hand. Its revenue for the previous twelve months was $1.2mm with a net loss of $4.9mm. The company's cash and cash equivalents, accounts receivables, and some liabilities are not included in the deal. Its litigation against Johnson & Johnson's Ortho-McNeil Pharmaceutical and obligations with Sanofi Aventis are also excluded. The assets include supplier, manufacturing, and license agreements, fixed assets, inventory, tangible personal property, and over 237 US and foreign patents. These patents, relating to continuous glucose sensing, extraction of interstitial fluid by reverse electro-ionophoresis, and electrochemical sensors, complement Animas's implantable optical sensor, which provides continuous monitoring of blood glucose levels. Cygnus's approved products are three generations of GlucoWatch Biographers, which are glucose monitors used in conjunction with traditional "finger-stick" methods for frequent, automatic, and noninvasive measurement. Investment Banks/Advisors: First Albany Capital Corp. (Cygnus Inc.)
Joint Arrangements
3M Company
3M Medical Specialties
Response Biomedical Corp.
Response Biomedical (point-of-care tests) and 3M Medical Specialties have agreed to co-develop a rapid POC diagnostic for infection prevention that implements Response's RAMP technology. (Nov.)
3M has agreed to pay for the development of the test. The two companies plan to enter a supply agreement in the future in which Response will manufacture and 3M will exclusively sell a line of microbiology diagnostics. RAMP contains a portable fluorescent reader and single-use cartridges. The technology is currently used for early detection of a heart attack, to detect West Nile virus in the environment, and for on-site detection of anthrax, smallpox, ricin, and botulinum toxin. Response estimates RAMP could be used in more than 250 medical and non-medical tests that are already performed in laboratories.
Abbott Laboratories Inc.
Competitive Technologies Inc.
Competitive Technologies (technology transfer and licensing provider) has licensed Abbott a patent relating to homocysteine tests. (Dec.)
Competitive Technologies will receive sales royalties on homocysteine assays that Abbott develops using the licensed patent. The technology was discovered by the University of Colorado's Drs. Robert Allen and Sally Stabler, and Columbia University's Dr. John Lindenbaum. It covers assays for determining levels of sulfhydryl amino acids, particularly total homocysteine levels, and methods for detecting and distinguishing cobalamin and folic acid deficiency. Under the agreement, Abbott's homocysteine assay customers will be covered by the license and will not be required to pay royalties to Competitive Technologies.
Applied NeuroSolutions Inc.
bioMerieux SA
bioMerieux SA has received an option to nonexclusively license Applied NeuroSolutions' (formerly Hemoxymed; diagnostics and therapeutics for Alzheimer's ideas) technology for use in developing a diagnostic for Alzheimer's. (Dec.)
Applied NeuroSolutions could receive over $5mm, consisting of an up-front payment and milestones. Additionally, the company is eligible for substantial royalties on the worldwide sales of any tests developed by bioMerieux using the licensed technology. BioMerieux would handle all activities related to obtaining regulatory approvals for the AD diagnostic. There are currently no FDA-approved tests for Alzheimer's. With help from the Albert Einstein College of Medicine, Applied NeuroSolutions has developed a cerebrospinal fluid assay, which has been able to identify (with 85-95% sensitivity and specificity) patients with very early-stage AD. Applied NeuroSolutions is also developing a blood-based AD test and therapeutics to treat the disease.
Chiron Corp.
Laboratory Corp. of America Holdings
National Genetics Institute
Chiron has given Laboratory Corp. of America and its National Genetics Institute subsidiary a semi-exclusive license to its hepatitis C virus technology. The license enables LabCorp and NGI to use the IP to screen plasma donations made in the US. (Dec.)
As part of the deal, LabCorp will not challenge certain of Chiron's HCV patents. NGI, which was established in 1991, is using molecular biology and PCR techniques to test for the hepatitis C virus and other infectious diseases to improve plasma screening. It is also developing diagnostics to detect genetic disorders.
ChondroGene Ltd.
Pfizer Inc.
In a two-year agreement worth $7.35mm, ChondroGene Ltd. (functional genomics) and Pfizer will work together to identify targets and biomarkers to diagnose and treat osteoarthritis (OA). (Dec.)
The new deal is an extension of a similar agreement signed in October 2002. Pfizer will use ChondroGene's database containing information related to OA tissue-specific clinical and gene expression in an effort to discover targets for the disease. As a result, ChondroGene will be able to expedite its research in the area of OA biomarkers. The company uses its genomic capabilities to develop tests that can detect the disease before symptoms appear. Currently there are no drugs available that can slow or stop the progression of OA; a diagnostic for early detection is crucial to developing new therapeutics for the disorder.
Financings
Adaltis Inc.
Canadian medical device company Adaltis Inc. has netted $43.35mm ($Cdn51.43mm) in its initial public offering of 10mm shares priced at $4.64 each on the Toronto Stock Exchange. (Dec.)
The company plans to use the funding to launch certain diagnostic products, including the Eclectica compact combination immunoassay and clinical chemistry platform. It also intends to continue expanding into emerging markets, especially China, in the area of infectious diseases including HIV. Adaltis has various reagent kits to test for hormones and fertility, tumor markers, autoimmune and infectious diseases, thyroid conditions, diabetes, adrenal function, hypertension, drugs of abuse, and over 350 specific allergens. It is currently creating new tests for microtiter, radioimmunoassay, and magnetic bead technology. Investment Banks/Advisors: Loewen, Ondaatje, McCutcheon Ltd.; CIBC World Markets Corp.; National Bank Financial Corp.; Desjardins Securities Inc.; BMO Nesbitt Burns Inc.
Adeza Biomedical Corp.
Adeza Biomedical (diagnostics for pregnancy-related and female reproductive disorders) netted $62.4mm (including the overallotment) with its initial public offering of 4.31mm shares priced at $16 each. The company, which originally filed for the offering in August, will trade on the Nasdaq under the symbol ADZA. (Dec.)
Adeza's technologies are used to predict preterm birth and assess infertility. Its fetal fibronectin (Ffn) test, which is analyzed on Adeza's FDA-approved TLiIQ system, utilizes a single-use, disposable cassette to measure a pregnant woman's risk for preterm delivery in the absence or presence of symptoms. The Ffn test can detect the fetal fibronectin protein in vaginal secretions during pregnancy and is designed to enable a more accurate assessment than traditional methods of the likelihood of a preterm birth. Investment Banks/Advisors: William Blair & Co.; Thomas Weisel Partners LLC; SG Cowen & Co.; UBS Securities LLC
Pharmaceuticals
Acquisitions
Aphton Corp.
igeneon AG
Aphton Corp. (immunotherapies for cancer and other diseases) has entered into a definitive agreement to acquire privately held igeneon AG (cancer therapeutics). Igeneon shareholders will receive 21.5mm shares of Aphton's stock for all of the company's outstanding equity; based on Aphton's pre-announcement market average price, the deal is valued at about $74mm. (Dec.)
Igeneon is based in Austria and is developing immunotherapies designed to prevent or slow the progression of metastases in epithelial cancers. Its lead product candidate is IGN101 and is in Phase II/III clinical trials as a cancer vaccine to trigger an immune response in EpCAM positive tumor cells. IGN311--the company's second-most advanced project--was in-licensed from Protein Design Labs in 2002 and is in Phase I trials to target and kill Lewis Y-positive tumor cells by activating other cytotoxic cells in the body. Aphton will incorporate igeneon's late-stage activities into its own to complement its lead candidate Insegia that is currently in clinical trials for cancers of the stomach, pancreas, and esophagus. Investment Banks/Advisors: UBS Securities LLC (Aphton Corp.); UBS Securities LLC (igeneon AG)
Bristol-Myers Squibb Co.
Oncology Therapeutics Network
Bristol-Myers Squibb is selling its Oncology Therapeutics Network subsidiary to One Equity Partners for an undisclosed amount. (Dec.)
Axion originally formed OTN in 1990, then turned it into a JV when Bristol made an equity investment in the firm in 1993. Bristol bought out Axion's 50% share in 1996. OTN provides oncology and supportive care products and related supplies to office-based oncologists in the US. Bristol says the division's aim has been to reduce the cost and administrative work for these oncologists (who cannot rely on support in a hospital setting) by serving as a single supply source for their anticancer drugs and related supplies. For the year ended December 31, 2003, OTN generated revenues of $2.2bn with EBIT earnings of $14mm. Bristol says the divestiture will enable it to focus on developing its product pipeline in ten disease areas related to unmet medical needs.
Dainippon Pharmaceutical Co. Ltd.
Sumitomo Chemical Co.
Sumitomo Pharmaceuticals Co. Ltd.
Dainippon Pharmaceutical and Sumitomo Pharmaceuticals (SP) have signed a basic agreement to merge in October 2005, a move that will place the combined company among the top 10 Japanese pharma firms, with anticipated annual sales of $2.67bn (Y280bn) by 2008. (Nov.)
SP's 2004 sales were about $1.3bn and Dainippon's about one-fourth greater than that. It is anticipated that Dainippon will issue Sumitomo Chemical about 233mm new common shares (1,290 for each share of SP); based on Dainippon's trading price soon after the companies announced the deal, the acquisition is worth about $2.2bn. The new company (not named yet, but Dainippon will be the surviving entity and will remain listed) will be a consolidated subsidiary of Sumitomo Chemical, which currently controls 78% of SP and will hold 50.1% of the voting stock after the merger. The new company's 1,500 medical reps will focus on marketing four major products: Sumitomo's Amlodin (hypertension and angina) and Meropen (antibiotic), and Dainippon's Gasmotin (GI therapy) and Prorenal (circulatory agent). R&D spending will mainly go to the areas of diabetes, CNS, immunology, and allergy. Dainippon and Sumitomo say they intend to fuse their corporate cultures and nurture a spirit of enterprise. The current presidents of the two firms will take the roles of chairman and president after the combination, and Dainippon and Sumitomo will have equal representation on the board. Investment Banks/Advisors: JP Morgan Chase & Co. (Dainippon Pharmaceutical Co. Ltd.); Nikko Cordial Corp. (Sumitomo Pharmaceuticals Co. Ltd.)
Guilford Pharmaceuticals Inc.
ProQuest Pharmaceuticals Inc.
Guilford Pharmaceuticals has acquired ProQuest Pharmaceuticals for about $7mm in Guilford common stock (1.32mmm shares). The number of shares it issued ProQuest stockholders was determined by dividing the purchase price by Guilford common stock's average price for the 30-day period ending two days before the deal's close. (Dec.)
ProQuest will become a wholly owned Guilford subsidiary. The merger, which does not include ProQuest's staff or facilities, gives Guilford full IP rights to Aquavan, a candidate that the two companies have been developing under an agreement they signed in March 2000. Aquavan, an injectable prodrug formulation of the anesthetic propofol, is currently in Phase III clinical trials for use with patients undergoing colonoscopy, bronchoscopy, and minor surgical procedures. Guilford is also planning a fourth trial for cardiac surgeries. In the first half of 2006, it expects to file for Aquavan's approval as a sedative in brief diagnostic and therapeutic procedures. The present agreement supercedes the prior deal, canceling any milestones and royalties that were part of that arrangement.
Kyorin Pharmaceutical Co. Ltd.
ActivX Biosciences Inc.
Diversified Japanese drug company Kyorin Pharmaceutical Co. Ltd. is buying ActivX Biosciences (uses proteomics technologies to develop small-molecule drugs) for $21mm in cash. (Dec.)
As a result of the deal, ActivX becomes a wholly owned subsidiary; most of the company's 30 employees will keep their jobs, with the exception of its CEO and CFO who will be leaving. ActivX's Xhibit high-throughput analysis technology uses probes to identify highly selective drug targets and biomarkers, and profile off-target activities of both drugs and candidates. The company has been focused in the areas of blood disorders, cancer, and metabolic and inflammatory diseases. Its lead compound AX8000 is a small molecule in preclinical studies to treat the blood disease neutropenia; human clinical trials are expected to commence in 2005. Kyorin says the acquisition will help it improve its lead identification and optimization activities and increase its worldwide network. The companies first began collaborating in June 2002 in the area of Type II diabetes; in January 2004, ActivX agreed to help Kyorin develop protein activity profiles for some of its compounds.
NPS BioTherapeutics Inc.
Bayer AG
Bayer Biological Products
Bayer HealthCare LLC
Bayer AG has agreed to sell the plasma products business of Bayer Biological Products, a division of its US subsidiary Bayer HealthCare, to NPS BioTherapeutics, a new company controlled by affiliates of the private US investment groups Cerberus Capital Management and Ampersand Ventures. The total consideration is €450mm ($590mm) in cash, a 10% stake in NPS, and potential earn-outs of up to $60mm. (Dec.)
The division, which employs about 1,600 people in the US, realized revenues of $593mm for the first nine months of 2004. All but one of its products are derived from human blood plasma (the liquid portion of the blood), including Polyglobin, Gamunex, and Gamimune for immune deficiencies and Prolastin for congenital pulmonary emphysema. Hemophilia therapeutic Kogenate, which is made from hamster kidney cells combined with a human gene, is excluded from the deal. Bayer has been reorganizing its health care business since the recall of its cholesterol drug Lipobay/Baycol and an unsuccessful search for a partner. It wants to concentrate more on consumer health, new drugs for humans and animals, and diagnostic systems with a focus on the European market and fields where it already has successful products. In July 2004, Bayer bought Roche's OTC business for $3bn. Two months later, it licensed Schering-Plough US and Puerto Rican marketing rights to all of Bayer HealthCare's primary care pharma products.
PhotoMedex Inc.
ProCyte Corp.
PhotoMedex has agreed to buy ProCyte (develops wound healing and skin care products) in a stock-swap valued at $23.25mm. For each ProCyte outstanding share, PhotoMedex will issue 0.6622 shares of its own stock, worth $1.47 based on PhotoMedex's 10-day average market price--a 26% premium over ProCyte's market average. (Dec.)
Following the transaction, ProCyte will own 21% of the merged company. PhotoMedex says the acquisition allows it to increase its presence in the dermatology market and accelerate the sales of its XTRAC laser therapy system for patients with psoriasis. ProCyte's products are based on its patented copper peptide technology, which uses a sequence of amino acids as a delivery vehicle for carrying health-essential copper throughout the body to aid in tissue repair and the health of skin and hair. The company's pipeline includes the Neova, VitalCopper, AquaSante, Simple Solutions, and Complex Cu3 lines of skin care products, and GraftCyte and Tricomin brands for hair care. Procyte currently uses a 25-person sales team to market such products to cosmetic surgeons and dermatologists worldwide. The company has ongoing licensing agreements with partners including Tanox Biosystems and J&J's Ortho Neutrogena. ProCyte reports that it currently has $6mm in cash on hand. Investment Banks/Advisors: CIBC World Markets Corp. (PhotoMedex Inc.); Wells Fargo Securities LLC (ProCyte Corp.)
ProStrakan Group Ltd.
Elfar SA
ProStrakan Group Ltd. (specialty pharmaceuticals) has acquired Madrid-based Elfar SA for an undisclosed cash sum. (Dec.)
ProStrakan says the deal allows the company to expand its presence in the European market, specifically in Spain. In September it bought another Madrid-based company, Devon Farmaceutica, which it plans to merge into Elfar. The newly acquired company uses its 45-person sales team to market its own branded products and inlicensed therapies in the areas of benign prostatic hypertrophy (tebetane and alfaprost), prostate cancer (flutamida), and urinary tract infection (piprol ciprofloxacino). Last year it reported sales of €8.5mm ($11.3mm). In October, ProStrakan raised $40.2mm to finance company or product acquisitions.
Stada Arzneimittel AG
Nizhpharm JSC
Stada Arzneimittel AG (generics and branded and specialty drugs based on off-patent active ingredients) has signed a provisional agreement to acquire Nizhpharm JSC, one of Russia's top three or four pharmaceutical companies, for €80-85mm ($101-108mm). (Nov.)
Nizhpharm had sales of €40.8mm in 2003, mostly to the Russian market and some through its subsidiaries in Ukraine and Kazakhstan. Its portfolio covers a number of therapeutic areas and includes over 40 brand-name products, mostly OTC, that use off-patent ingredients. The company's production facilities are modern and may achieve GMP certification soon. Nizhpharm is currently owned 39% by institutional and private investors, 36% by company management, and the other 25% by the European Bank for Reconstruction and Development. Last summer the number one Polish drug maker, Polpharma, had shown an interest in buying out the EBRD's stake, but now Stada will have exclusive rights through January 2005 to negotiate a nearly full acquisition (97%) of Nizhpharm.
Xanodyne Pharmaceuticals Inc.
PX Pharmaceuticals Inc.
Xanodyne Pharmaceuticals (focused on drugs to treat women's health conditions, urology, and manage pain) has agreed to acquire PX Pharmaceuticals (non-injectable vaccines) for cash and stock. (Dec.)
PX has been developing a Phase II/III transmucosal vaccine delivered via a suppository to prevent urinary tract infections from recurring; the vaccine is expected to be launched before 2009. The company's technology may also be used to develop other vaccines to improve women's and men's health. PX's drug candidate complements Xanodyne's product offerings, which include already-marketed products: Amicar for excessive bleeding, Duet prenatal vitamins, Hycet for moderate-to-severe pain, Lucidex for fatigue and drowsiness, and Urimax for pain, spasms, and burning that can accompany urinary tract infections. Xanodyne's pipeline also consists of candidates XP12B for heavy menstrual bleeding, and Misopess, in Phase III studies for cervical ripening that accompanies labor induction (under an agreement with Cytokine PharmaSciences). Earlier this year, Xanodyne merged with Integrity Pharmaceutical, which specialized in drugs to treat urological and women's health conditions.
Joint Arrangements
Ansata Therapeutics Inc.
Medicis Pharmaceutical Corp.
Dermatology company Medicis licensed exclusive rights to Ansata Therapeutics' (topical drugs for dermatology) early-stage antimicrobial peptide technology. (Dec.)
Ansata receives $5mm up front and could get an additional $9mm based on specific developmental milestones. If Medicis then chooses to further develop the technology, it makes subsequent payments to the company. Ansata is using its peptide technology in the development of topical therapies for dermatological conditions that result from infectious organisms. Peptides can stimulate the immune system to fight multi-drug resistant pathogens.
Arena Pharmaceuticals Inc.
Johnson & Johnson
Janssen Pharmaceutica NV
Johnson & Johnson Pharmaceutical R&D LLC
Ortho-McNeil Pharmaceutical Inc.
Just days after penning its $25.38bn acquisition of Guidant, Johnson & Johnson has signed another deal. This time it involves its Ortho-McNeil Pharmaceutical division developing and globally marketing two of Arena Pharmaceuticals' (focused on metabolic, cardiovascular, inflammatory, and CNS diseases) preclinical therapeutics to treat Type II diabetes and other disorders. (Dec.)
Arena gets $17.5mm up front, $4.8mm in funding over the course of two years, and up to $132.5mm in development and approval milestones for the first indication, $62.5mm for the second indication, and sales milestones of $100mm for each compound; the company will also receive low double-digit royalties that will increase with improved sales. Johnson & Johnson Pharmaceutical Research & Development (a division of J&J's Janssen Pharmaceutica NV) will be in charge of future development of the drug candidates and will be responsible for expenses that are incurred throughout the collaboration. The agreement initially focuses on drug candidates that modulate orphan G protein-coupled receptors (GPCRs) called 19AJ receptors; they are located on pancreatic islet beta cells that serve as a source of insulin to humans. Arena's researchers have already identified the role 19AJ plays in Type II diabetes; when tested in animals, the compound provided lower fasting blood sugar and glycosylated hemoglobin (HbA1c) levels. Ortho-McNeil intends to develop the compounds for administration alone or in conjunction with other pharmaceuticals that act upon different pathways.
Barr Pharmaceuticals Inc.
Duramed Pharmaceuticals Inc.
King Pharmaceuticals Inc.
In settlement of pending patent litigation, King Pharmaceuticals has licensed Barr Pharmaceuticals' subsidiary Duramed exclusive US manufacturing and marketing rights to its menopausal drug Prefest (estradiol/norgestimate). (Nov.)
Duramed pays King $15mm for the rights. Prefest, a single tablet combination hormone replacement therapy with an intermittent progestin and continuous estrogen administration, is designed to treat moderate to severe vasomotor symptoms, vulvar and vaginal atrophy, and postmenopausal osteoporosis in women with an intact uterus. Barr says the drug will complement Duramed's other female health care products, which include Seasonale extended-release oral contraceptive and Cenestin synthetic conjugated estrogens. King, which is being acquired by Mylan Laboratories under a $4.2bn stock-swap deal signed in July 2004, says the agreement is part of its strategy to divest many, or all, of its women's health products to focus on in-licensing, development, acquisition, and promotion of branded prescription pharma products in those therapeutic areas it deems more significant to its growth.
Barr Pharmaceuticals Inc.
Duramed Pharmaceuticals Inc.
King Pharmaceuticals Inc.
King Pharmaceuticals has given Barr Pharmaceuticals' Duramed division exclusive US manufacturing and marketing rights to its Nordette (levonorgestrel and ethinyl estradiol) contraceptive tablets. (Dec.)
Duramed has agreed to pay King $12mm for rights to the drug. Barr says it is now able to sell both brand and generic versions of the oral contraceptive, adding to its existing offerings in the women's health field, which include Cenestin, a synthetic estrogen therapy and Seasonale extended-cycle oral contraceptive. Barr licensed the contraceptives Ovcon, Loestrin, and Loestrin Fe from Galen (now part of Warner Chilcott) in late 2003, and just last month got US rights to King Pharmaceuticals' Prefest.
BioMarin Pharmaceutical Inc.
Daiichi Pharmaceutical Co. Ltd.
Daiichi Suntory Pharma Co. Ltd.
Merck KGAA
Merck Eprova AG
Daiichi Suntory Pharma and BioMarin Pharmaceutical (therapeutics for serious pediatric diseases) are collaborating to develop Phenoptin (6R-BH4), BioMarin's oral formulation of the naturally occurring enzyme cofactor tetrahydrobiopterin, to treat phenylketonuria (PKU), a genetic disease in evidence within moments after birth. (Nov.)
Daiichi supplies the ingredients and exclusively licenses BioMarin rights to certain preclinical and clinical data related to 6R-BH4, in addition to exclusive access to a commercial-grade version of the enzyme co-factor. In return, Daiichi gets regulatory milestones and royalties on sales outside of Japan where it retains rights. Daiichi shares royalties with Merck KGAA, which has a November 2003 agreement with BioMarin to develop and manufacture Phenoptin (BioMarin says Merck's royalty rate is lower than Daiichi's). Patients with PKU lack tetrahydrobiopterin, which is an essential element in the metabolism of phenylalanine (Phe), an amino acid (found in most protein foods) that can accumulate in the blood and result in severe mental retardation and brain damage if not controlled with a protein-free diet. Phenoptin, which demonstrated efficacy in lowering blood Phe levels, has received orphan drug designation in the US and Europe. BioMarin filed an IND application for PKU in August 2004 (6R-BH4 has received Japanese approval for BH4-deficiency, also a genetic disorder). The company will initiate a Phase II trial by end of 2004 and possibly move the candidate into Phase III next year.
Bristol-Myers Squibb Co.
Bristol-Myers Squibb Medical Imaging Inc.
Imcor Pharmaceutical Co.
In a nonexclusive deal, Bristol-Myers Squibb and specialty pharma company Imcor Pharmaceutical have cross-licensed specific patents to develop and commercialize ultrasound contrast imaging agents. (Nov.)
The deal allows the companies to develop their own imaging agents without risk of patent infringement. Imcor gets $8.5mm and a right of first negotiation for select BMS Medical Imaging compounds. Imcor is developing PH-50, an iodinated formulation for use as a subcutaneous or IV agent in cardiovascular imaging and lymphography. BMS Medical Imaging's products include Cardiolite, Definity, and Miraluma injectable formulations, which are used to image the heart and vasculature.
Bristol-Myers Squibb Co.
Somerset Pharmaceuticals Inc.
Somerset Pharmaceuticals (a joint venture between Mylan Laboratories and Watson Pharmaceuticals) has licensed Bristol-Myers Squibb exclusive US and Canadian distribution rights to its Emsam (selegiline transdermal system). (Dec.)
BMS also gets the chance to negotiate for any or all rights in the rest of the world. Somerset gets an up-front payment, additional funds after the candidate gets regulatory approval, sales-based milestones, and royalties, and it may be reimbursed for some development costs. Somerset will supply BMS with the product. Emsam is an investigational monoamine oxidase inhibitor that is administered via a patch to treat patients with major depressive disorder. The FDA sent Somerset an approvable letter for Emsam last February; if approved, it will be the first transdermal therapeutic for major depressive disorder. Somerset is also developing a selegiline transdermal system to treat Alzheimer's and Parkinson's diseases.
CancerVax Corp.
Serono SA
CancerVax (cancer therapeutics) and Serono SA have entered into an agreement to further develop CancerVax's Canvaxin, a Phase III immunotherapeutic to treat advanced-stage melanoma. (Dec.)
CancerVax gets $37mm up front--$25mm in cash and $12mm for Serono's purchase of 1mm CancerVax common shares--and is also eligible for up to $253mm in development, regulatory, and commercialization milestones. The companies will co-promote Canvaxin in the US (equally sharing in certain expenses and profits), and Serono gets exclusive rights in the rest of the world; it will pay royalties on sales in the exclusive territories. In the early stages of the deal, CancerVax will continue to manufacture the candidate for worldwide supply but Serono is contemplating a secondary manufacturing site solely for supply outside of the US. Canvaxin is a therapeutic vaccine designed to stimulate the immune system against cancer. In addition to melanoma, CancerVax also has it in Phase I/II trials for colorectal cancer. With the deal, Serono is looking to boost its own oncology portfolio (which currently includes candidates for non-Hodgkin's lymphoma) while CancerVax hopes to take advantage of Serono's strong presence in the dermatology market as a way to more effectively market Canvaxin.
Celgene Corp.
Pharmion Corp.
As a revision to their 2001 Thalomid (thalidomide) deal, Pharmion (cancer therapeutics) and its partner, small-molecule immunotherapeutics developer Celgene, have signed a new three-year-agreement for worldwide development of the candidate--which is now pending FDA approval in the US--for multiple myeloma. (Dec.)
In the modified deal, Celgene could stand to get $88mm in new monies, but forfeits termination rights it holds related to Thalomid's regulatory approval in Europe by November 2006. Pharmion will make an up-front payment of $77mm, reducing its thalidomide purchase price as well as its royalty obligation (from 36%) to 23.5% of Thalomid net sales. Pharmion will also pay $3mm up front for expanded development and marketing rights in territories that now include Hong Kong, Korea, and Taiwan (areas excluded from the original deal), plus it provides $8mm over the next three years to support R&D and regulatory approval costs. In October, Celgene exercised its previous option to acquire Penn Pharmaceutical Services' division Penn T, thalidomide's UK manufacturer. Thalomid, currently marketed as a leprosy drug, was originally prescribed in the 50's as a sedative for nausea and insomnia in pregnant women, but later taken off the market due to findings that it could cause severe birth defects.
Cellegy Pharmaceuticals Inc.
ProStrakan Group Ltd.
Specialty pharma company ProStrakan Group (formed through the 2004 merger of Strakan Pharmaceuticals and ProSkelia) has taken on European marketing of a second product, Rectogesic, for partner Cellegy Pharmaceuticals. (Dec.)
In 2002, the companies signed an agreement giving ProStrakan (then Strakan) the rights to market Cellegy's male hypogonadism treatment Tostrex in Europe. The current deal calls for ProStrakan to be responsible for regulatory filings, sales, marketing, and distribution of Rectogesic--which has been approved in the US and sold there under the brandname Cellegesic for the treatment of anal fissures--in 38 European territories. Cellegy gets up to $5.6mm in up-front and milestone payments, including payments if the drug is further approved to treat hemorrhoids. It also gets payments in excess of 25% of the net sales of Rectogesic in Europe. Similar to the 2002 deal, ProStrakan again grants a right of first negotiation to Cellegy, this time for a Phase I oral estradiol-glucoside candidate or an alternative gastrointestinal treatment.
Cerus Corp.
Roche
Chugai Pharmaceutical Co. Ltd.
Cancer vaccine and infectious disease drug developer Cerus has licensed from Roche's Chugai Pharmaceutical unit exclusive rights to a patent covering the use of the DNA sequence of the mesothelin antigen (expressed in ovarian and pancreatic tumors) to develop cancer vaccines. (Dec.)
Chugai gets an undisclosed up-front payment, development milestones, and royalties on sales of resulting products. In early 2004, Cerus licensed mesothelin rights from Johns Hopkins University, and will use the patent licensed under the current deal to further expand on its immunotherapy program. The preclinical platform combines listeria monocytogene strains with mesothelin strains to create a therapeutic vaccine to stimulate a cancer patient's immune system to recognize and attack pancreatic and ovarian cancer cells that express mesothelin.
Chromos Molecular Systems Inc.
Pfizer Inc.
Chromos Molecular Systems (cellular engineering and therapeutics) will use its ACE (Artificial Chromosome Expression) system to develop various high-quality cell lines that can express a recombinant protein provided by Pfizer. (Dec.)
Pfizer, which is funding the collaboration, will then assess the performance of the engineered cell lines. The ACE system is a gene expression technology that transports genes to the nucleus of cells to produce one or several proteins in a predictable and stable manner. Although it can be used in a wide range of applications, Chromos has been using the technology to create gene-based cell therapies and to engineer cells lines for the production of biopharmaceuticals.
CV Therapeutics Inc.
Solvay SA
Solvay Pharmaceuticals Inc.
CV Therapeutics (cardiovascular drugs) has agreed to co-promote Solvay Pharmaceuticals' Aceon (perindopril) tablets in the US. Aceon is an angiotensin-converting enzyme inhibitor that has received approval as a therapeutic for hypertension. The agreement was signed for an initial six years, with the option to extend it. (Dec.)
CV Therapeutics will be in charge of marketing the drug and will create a cardiology-focused sales team to sell Aceon. Solvay will keep manufacturing and distributing the product and will sell it through its primary care sales force. Solvay will book all Aceon sales, giving CV Therapeutics a royalty of between 50-60% on sales above certain pre-set levels; it is estimated the current annual sales of Aceon are about $30mm. The companies did not disclose further financials details, except to say that there was no up-front payment. Pending results of a European trial--to determine if perindopril (sold as Coversyl in Europe) can help lower cardiovascular death, myocardial infarction, and cardiac arrest in patients with stable coronary disease--Solvay plans to file a supplemental NDA to expand the label on Aceon. CV Therapeutics says the product could eventually be sold in conjunction with its Ranexa, a drug candidate for which the company has already filed an NDA to treat chronic angina.
Debio Group
Debiopharm SA
GPC Biotech AG
GPC Biotech AG (anticancer drugs) licensed Debiopharm SA (in-licenses preclinical candidates to take through development) exclusive worldwide rights to develop preclinical small molecule MHC (major histocompatibility complex) class II antagonists to treat autoimmune diseases. (Dec.)
Debiopharm is responsible for all development costs and pays GPC Biotech an up-front fee, milestones, and future sales royalties. The licensed compounds selectively block disease-associated MHC class II molecules, enabling the immune system to fight pathogens without harming the body's healthy tissue. Debiopharm plans to develop the candidates for rheumatoid arthritis, amongst other diseases.
Emisphere Technologies Inc.
Novartis AG
Novartis Pharma AG
Novartis Pharma AG has signed an option and license agreement with Emisphere Technologies (drug delivery) covering the development and marketing of an oral formulation of parathyroid hormone (PTH) using Emisphere's eligen delivery technology. (Dec.)
Emisphere is currently in litigation with Eli Lilly & Co. over the termination of an oral PTH deal (originally signed in early 1997 and worth $60mm); it has agreed to sign a licensing deal with Novartis once the dispute is settled. Novartis has made a $10mm equity investment in Emisphere in the form of a convertible note (repayment--in either cash or stock--is not contingent upon the legal outcome with Lilly); if Novartis exercises its option, Emisphere gets milestones up to $30mm, plus royalties. Eligen uses Emisphere agents (synthetic compounds) to deliver therapeutics orally; they can carry macromolecules across biological membranes, including the gastrointestinal tract. Recombinant parathyroid hormone is a bone-formation agent that helps to prevent bone loss and stimulate the formation of new bone. This agreement marks the third that the two companies have signed--the first covered the development of oral salmon calcitonin for osteoporosis and the second, oral human growth hormone.
Eurand
Par Pharmaceutical Cos. Inc.
Generic drug company Par Pharmaceutical received exclusive rights to sell and distribute drug delivery firm Eurand's potassium chloride tablets in the US. (Dec.)
Eurand gets an up-front payment and will share sales profits with Par. Eurand will manufacture the licensed drug, which received FDA marketing approval in the third quarter of 2004. Eurand developed the tablets with its Microcaps micro-encapsulation technology that efficiently and uniformly coats drug particles with polymeric membranes of various degrees of porosity. The technology enables taste and odor masking, sustained release dosing, conversion of liquids to solids, and separation of incompatibles.
Forest Laboratories Inc.
Gedeon Richter Ltd.
Forest Laboratories has licensed US and Canadian rights to Hungarian pharmaceutical company Gedeon Richter's RGH-188 antipsychotic drug candidate and related compounds. (Nov.)
Forest pays an undisclosed up-front fee and milestones upon successful development and commercialization in its territories; Richter retains rights for the rest of the world. RGH-188 is a D2/D3 antagonist that is currently in Phase I trials in the UK for schizophrenia and bipolar mania. (The companies believe that the candidate could be in US Phase III trials by the end of 2006.) The drug is covered under a patent application until 2024 and is being developed for sale in what is currently an $8bn US market for antipsychotics. Forest hopes to add the compound to its portfolio of CNS drugs currently on the market, including Lexapro for depression and generalized social anxiety disorder; Namenda for Alzheimer's disease; and Celexa for depression.
Genentech Inc.
Trillium Therapeutics Inc.
Trillium Therapeutics (therapeutics to re-balance a weakened immune system) has granted Genentech an exclusive worldwide license to its technology that will be used to develop and market products aimed at an undisclosed target. (Dec.)
Genentech has agreed to provide money up front, fund research, and make milestone payments, plus pay royalties. Trillium and Genentech will jointly finish preclinical development; however, Genentech will be in charge of clinical studies, achieving regulatory approvals, and manufacturing and marketing any resulting products. Although the therapeutic focus of the deal was not specified, Trillium officials say they used the company's core immunology R&D program to create a portfolio of therapeutic candidates that it may out-license. Trillium has been developing monoclonal antibodies, proteins, and peptides to treat autoimmune and inflammatory disorders, graft rejection, cancer, and chronic viral diseases.
Genentech Inc.
Xencor Inc.
Xencor (cancer, inflammation, and autoimmune disorders) has given Genentech an exclusive worldwide license to use its XmAb technology to develop and market cancer and autoimmune antibody therapeutics that target CD20 and Her2, plus another undisclosed antigen. (Dec.)
Genentech will pay a $5mm up-front fee as well as other yearly licensing fees, plus preclinical, clinical, and regulatory milestones for each target and royalties on any resulting products. XmAb uses engineered antibody Fc variants (to improve the properties of a monoclonal antibody) that are combined with drug candidates to help a patient's own immune system fight disease. Genentech and Biogen-Idec currently sell Rituxan, which targets CD20, in the US. It was approved in late 1997, making it the first monoclonal antibody approved by the US FDA to treat cancer (it destroys malignant B-cells). Genentech also markets Herceptin, which targets the Her2 protein, in the US; Roche licensed ex-US rights to the product in mid-1998 and now sells it globally.
GlaxoSmithKline PLC
GlaxoSmithKline Consumer Healthcare
Rohto Pharmaceutical Co. Ltd.
The Mentholatum Co. Inc.
The Japanese company Rohto Pharmaceutical's wholly owned US subsidiary The Mentholatum Co. (OTC health care products) has acquired GlaxoSmithKline Consumer Healthcare's Oxy brand of acne treatments, which it will begin selling and marketing immediately. GSK will handle distribution in many areas during a transitional period. (Dec.)
The purchased products include cleansing pads, spot treatments, and washes; the Oxy line has 90% brand awareness among US teens. The deal should expand Mentholatum's worldwide revenue by 20% and allow it to enter into the global skin care market. The company's portfolio already included WellPatch pads for pain relief, Softlips lip protectant with sunscreen, Mentholatum vapor ointment, and Rohto's eye care products.
Iceland Genomics Corp.
ViroLogic Inc.
Aclara BioSciences Inc.
Aclara BioSciences (protein-based assays for personalized medicine; merged with ViroLogic earlier this year) and Iceland Genomic Corp. (ICG; biotech studying the underlying mechanisms of cancer) have entered into an agreement to validate Iceland Genomics' tumor samples using Aclara's eTag assays. (Dec.)
Aclara will provide funding to ICG and share all related data for later use in its drug discovery databases. Iceland is providing blood samples and blinded patient data such as illness history and treatment outcome. Aclara will test the samples with its eTag assay to validate cancer biomarkers and the possibility of using the biomarkers as indicators of disease progression and pharmacogenomic response. ETag measures targeted proteins and signaling pathways that are involved in diseased-cell proliferation and cell death. The goal of the collaboration is for the companies to isolate new targets and study individual patient responsiveness to various cancer therapies.
ImmunoGen Inc.
Johnson & Johnson
Centocor Inc.
ImmunoGen (cancer therapeutics) has granted Johnson & Johnson's Centocor division exclusive worldwide rights to use its Tumor-Activated Prodrug (TAP) technology to develop and sell a therapeutic which combines a Centocor antibody that seeks and binds to a specific cancer target, with ImmunoGen's maytansinoid cell-killing agent. (Dec.)
Centocor will be in charge of R&D, manufacturing, and marketing of any resulting products. It has agreed to pay ImmunoGen $1mm up front, milestones that could reach $42.5mm, and royalties. Centocor will also compensate ImmunoGen for product development research it performs for Centocor and for the preclinical and early clinical materials it provides. ImmunoGen has already signed deals for its TAP payload technology with Biogen Idec, Genentech, Boehringer Ingelheim, Millennium Pharmaceuticals, and Abgenix.
Inpharmatica Ltd.
Novartis AG
Novartis Institutes for Biomedical Research
Inpharmatica (drug discovery technologies) has agreed to use its Chematica platform to help Novartis Institutes for Biomedical Research identify molecular targets that are part of Novartis's bioactive drug candidate program. (Dec.)
In exchange, Inpharmatica gets an undisclosed payment. Chematica is the chemogenomics part (combining chemistry and biology) of Inpharmatica's PharmaCarta platform (an informatics-based gene-to-candidate drug development technology). It is used to assess the relative druggability of a given target. Inpharmatica has used its technology in the discovery and development of proteins and antibody targets, ion channels, P450 enzymes, metalloproteinases, and progestin receptors.
Intercell AG
SciGen Ltd.
SciGen Ltd. (vaccines and therapeutics in the areas of gastroenterology, endocrinology, and immunology) and Intercell AG (infectious diseases vaccines) will develop a vaccine to treat hepatitis B (HBV). (Dec.)
The companies plan to design a vaccine that incorporates SciGen's Sci-B-Vac third-generation hepatitis B vaccine--containing purified recombinant pre-S1, pre-S2, and S protein antigens in their glycosylated and non-glycosylated forms--with Intercell's synthetic Immunizer IC31 adjuvant. Under the agreement, Intercell prepares the vaccine for clinical trials but both companies perform clinical development. SciGen and Intercell will share costs associated with development and jointly commercialize the resulting product. There are currently no marketed HBV vaccines, which--according to SciGen--have a potential worldwide market of $800mm.
Ista Pharmaceuticals Inc.
Senju Pharmaceutical Co. Ltd.
Japanese ophthalmic drug specialist Senju Pharmaceutical Co. Ltd. licensed Ista Pharmaceuticals (ophthalmic drugs based on the naturally occurring enzyme hyaluronidase) exclusive US development, manufacturing, and marketing rights to ecabet sodium eye drops (and related IP) to treat keratoconjunctivitis sicca (KCS), commonly known as dry eye syndrome. (Nov.)
Senju gets nonrefundable up-front and milestone payments of up to $3mm, plus royalties. Ista takes full responsibility for funding all US clinical development, submitting regulatory filings, and manufacturing, marketing, and selling the prescription product, if approved. Ecabet, which is in Phase II clinical trials in Japan for KCS, is already marketed there in an oral formulation for gastric ulcers and gastritis. Ista plans to complete a Phase IIb trial and begin Phase III in the latter half of 2005. The compound is in a new class of molecules designed to treat dry eye sufferers by stimulating production of mucin, a glycoprotein component of tear film that slows the loss of moisture from tear evaporation. Ista says the addition of ecabet will improve its late-stage product candidates--Vitrase for vitreous hemorrhage and Xibrom for ocular inflammation, eye pain, and photophobia following cataract surgery. The deal will allow the company to participate in what it says is a rapidly growing US dry-eye market, which is estimated to grow from about $80mm to up to $500-700mm within three to five years.
Johnson & Johnson
Centocor Inc.
Neurochem Inc.
Neurochem (neurological disorders) has given Johnson & Johnson's Centocor division exclusive worldwide distribution rights excluding Canada, Switzerland, China, Japan, Taiwan, and South Korea to its Fibrillex (1,3-propanedisulfonate). The glycosaminoglycan (GAG) mimetic has just completed Phase II/III trials to prevent amyloid fibril from forming and to treat AA amyloidosis. (Dec.)
Neurochem may receive up to $54mm in up-front and regulatory and sales-based milestone payments. The company also gets an increasing distribution fee, which will be based upon annual sales of Fibrillex. Neurochem will be in charge of gaining product approval in the US and EU (where the drug candidate has already received orphan drug status designation and orphan medicinal product designation, respectively) and will head up global manufacturing of Fibrillex. Centocor and affiliates will take care of marketing, recording sales, and safety surveillance of the drug candidate in the licensed territories. The agreement builds on the strengths of Centocor's commercial experience in the rheumatoid arthritis market, an important factor since arthritis is the most common condition that leads to AA amyloidosis. The disease is progressive and fatal and has been linked to patients afflicted with chronic inflammatory disease such as rheumatoid arthritis in both adults and juveniles, ankylosing spondylitis, and Crohn's disease. Patients can suffer from renal dysfunction, chronic diarrhea, abdominal pain, malabsorption, and enlargement of the liver and spleen, and have a five-year survival rate of about 50%.
Johnson & Johnson
Janssen-Cilag International
Ortho Biotech Products LP
Tibotec Pharmaceuticals Ltd.
Medivir AB
Johnson & Johnson's Tibotec Pharmaceuticals has agreed to help Medivir AB discover and develop its orally active protease inhibitors of the NS3/4A protease of the hepatitis C virus (HCV). (Nov.)
Medivir gets €6.5mm ($8.6mm) up front; research funding; and scientific, clinical, and regulatory milestones that could reach €62mm; plus royalties. The company also either receives a product with certain predefined marketing criteria to sell in the Nordic countries or gets the option of another payment. Tibotec, which is in charge of worldwide development, received an exclusive license to any resulting compounds; however, the agreement excludes Nordic countries, where Medivir will sell the drug candidates. J&J's Ortho Biotech and Janssen-Cilag will help Tibotec sell the therapeutics in the non-Nordic countries. It is estimated that about 200 million people across the globe are infected with HCV; about 3.9 million people in the US alone have been diagnosed with the virus. More than half of HCV cases result in long-term disease and disability--most commonly the patients suffer from liver disease, hepatocellular carcinoma, and some even require a liver transplant. The HCV market is currently estimated to be $3.5bn, and is expected to increase to $9bn by 2010.
Maxygen Inc.
Codexis Inc.
Teva Pharmaceutical Industries Ltd.
Maxygen's Codexis (biocatalysis and fermentation processes and products) will help Teva Pharmaceutical Industries (generics) create an improved production process for already marketed generic pharmaceuticals. (Dec.)
In exchange, Codexis gets funding for R&D and could receive milestones and royalties. Teva receives exclusive rights to commercialize the production method it develops. In the collaboration, Codexis will use its MolecularBreeding molecular evolution technology, which utilizes biocatalysts (enzymes and fermentation strains) to enable the discovery and development of improved manufacturing processes that can cost-effectively synthesize compounds.
Medarex Inc.
PharmAthene Inc.
PharmAthene (biodefense therapeutics) has agreed to jointly develop Medarex's (antibodies) MDX-1303, a fully human monoclonal antibody that targets Bacillus anthracis (human anthrax infection). (Dec.)
Medarex developed the preclinical MAb with its UltiMAb Human Antibody Development System. The companies will study MDX-1303 as a treatment for patients with active anthrax infection and as a prophylactic for those that have been exposed to it. PharmAthene has provided money up front which Medarex will apply to research already underway; it will also fund all future R&D of the MAb. Medarex and PharmAthene will share profits based on an undisclosed arrangement. In addition to providing funding for the alliance, PharmAthene contributes its knowledge of biodefense product development and government processes to obtain therapeutics for civilians and individuals in the military. The US Department of Health & Human Services has recently requested MAbs to treat inhaled anthrax; the therapeutics will be purchased and stockpiled in the national reserves to be given out in the event of a bioterrorist attack. Medarex has already received two grants from the National Institute of Allergy and Infectious Diseases and has the potential of gaining up to $7.2mm for MAb R&D activities over the course of the next three years.
Micromet AG
Serono SA
Micromet (antibody therapeutics for cancer, inflammation, and autoimmune conditions) and Serono SA have entered into an agreement to further develop Micromet's MT201, a fully human monoclonal antibody that targets the epithelial cell adhesion molecule (Ep-CAM) to fight various types of cancer. (Dec.)
Micromet will complete current Phase II clinical trials, after which Serono will take over the remaining development and commercialization activities. Serono is immediately responsible for development costs and will make an up-front payment of $10mm to Micromet. It will also pay milestones of up to $138mm if the drug is successfully developed and approved worldwide for three or more indications, and will pay royalties on net sales. Micromet may opt to co-develop and co-market resulting products and would share profits. MT201 is in Phase II trials for breast and prostate cancers and since it targets Ep-CAM, it also may have potential in the treatment of other cancers, including lung, colon, stomach, head and neck, pancreatic, and ovarian. Serono adds the compound to its pipeline that currently includes TACI-Ig, in Phase I and II trials for non-Hodgkin's lymphoma and multiple myeloma, respectively.
Morphotek Inc.
Novo Nordisk AS
Morphotek will apply its Morphodoma technology to help Novo Nordisk develop high-affinity antibodies and high-titer antibody-producing mammalian cell lines. (Dec.)
Under the nonexclusive, multi-year deal, Morphotek gets an up-front payment, R&D funding, a licensing fee, and milestones if products advance through clinical trials. Morphotek seeks to optimize up to four products for Novo Nordisk, which will then handle preclinical studies, clinical development, and eventual commercialization. The Morphodoma in vivo gene technology can rapidly create high-titer sublines from existing hybridoma and transfectoma cells for scaleable manufacturing and produce highly specific monoclonal antibodies with increased binding affinity to target antigens.
Novartis AG
Novartis Pharma AG
Triad Therapeutics Inc.
As part of its ongoing assets sale, defunct drug development company Triad Therapeutics has licensed Novartis Pharma AG worldwide rights to its preclinical p38 kinase inhibitor program to create drug candidates for inflammation. (Dec.)
Triad gets an up-front payment and up to $66mm in development and regulatory milestones, plus royalties. The company may get additional funds for each indication for which Novartis develops the compounds. P38 is a mitogen-activated protein (MAP) kinase that helps to regulate the biosynthesis of cytokines that increase inflammation. Several other companies are also developing P38 for various indications including rheumatoid arthritis, psoriasis, chronic obstructive pulmonary disease, irritable bowel syndrome, and osteoarthritis. The injectable anti-cytokine biologics market for 2003 was estimated to be $4bn.
Phytopharm PLC
Unilever PLC
Phytopharm PLC (plant-based therapeutics) has licensed Unilever PLC exclusive worldwide rights to P57, a Hoodia gordonii plant extract in development as an appetite suppressant. (Dec.)
Phytopharm initially gets £6.5mm ($12.5mm) out of a possible total of £21mm ($40mm) in milestones, plus royalties on sales of products containing the extract. The companies will jointly develop the Phase IIa compound for commercialization in weight-loss products. Studies have shown that the extract of the South African plant inhibits the desire to eat, thereby reducing caloric intake in overweight patients. Phytopharm originally licensed P57 from South Africa's Council for Scientific and Industrial Research in 1997, then offered Pfizer worldwide development and marketing rights to the compound in 1998. Following the closure of its nutraceuticals group, Pfizer returned its rights to Phytopharm in July 2003.
Prolysis Ltd.
Proteom Ltd.
Proteom Ltd. (creates small-molecule ligands) has agreed to help antibacterial developer Prolysis Ltd. optimize its lead antibiotic program. (Dec.)
Proteom will use its ProtoScreen in silico screening technology and ProtoBuild small-molecule de novo design platform to assist Prolysis in creating new classes of antibiotics that inhibit bacterial cell division. The technologies utilize Proteom's ProtoScore scoring system that can predict the binding affinity of a chemical entity for its target protein. From the collaboration, Prolysis hopes to develop compounds aimed at drug-resistant bacterial infection. The company's strategy is to out-license its candidates following proof-of-concept in Phase IIa clinical trials.
Pronova Biocare AS
Reliant Pharmaceuticals Inc.
Reliant Pharmaceuticals (sells therapeutics in primary care and specialty markets) received exclusive rights from Pronova Biocare AS (develops omega-3 fatty acid) to market and distribute Omacor (omega-3 acid ethyl esters) in the US. (Nov.)
Omacor just received FDA approval this month to treat hypertriglyceridemia. (It is also approved for the secondary prevention of myocardial infarction.) The product--which is made up of ethyl esters of eicosapentaenoic and docosahexaenoic acid--has approval in Europe and Asia, and is marketed by companies including AstraZeneca, Pfizer, Sigma Tau, and Solvay. Omacor is the only patented, FDA-approved omega-3-derived pharmaceutical that has shown a safety and efficacy profile in the clinic. Pronova manufactures the drug using a method that produces the active ingredient in high concentrations, while removing heavy metals and environmental pollutants that are found in other omega-3 products. Reliant brings to the deal a strong knowledge in the areas of cardiovascular diseases and lipid management.
Provalis PLC
Sanofi-Aventis SA
Aventis Pasteur SA
Provalis PLC (diagnostics and therapeutics) and Aventis Pasteur (the vaccines unit of Sanofi-Aventis) have entered into an option agreement for the development of streptococcus pneumoniae vaccine candidates. (Dec.)
Provalis has granted Aventis Pasteur a 24-month exclusive option to evaluate protein-based vaccine candidates that have been developed to prevent S. pneumoniae infection. Aventis pays an undisclosed up-front fee, as well as all fees dated back to May 2004 and future costs related to patents covering the candidates. It gets the right to exclusively license the vaccines in exchange for predetermined multi-million dollar milestones and royalties on sales of future products developed. The S. pneumoniae bacterium is the leading cause of infections such as pneumonia, otitis media, and bacterial meningitis. Vaccines currently exist for the bacteria, but are underused or not active against drug-resistant strains.
Financings
Abgenix Inc.
Abgenix (develops human therapeutic antibodies) is selling $225mm of its 1.75% convertible senior notes due 2011 to qualified institutional buyers under Rule 144A. The notes convert to common stock at $12.82 per share. The offering also includes an option allowing initial purchasers to buy up to an additional $75mm principal amount of 1.75% notes. (Dec.)
Abgenix will use a portion of the proceeds to retire some of its outstanding convertible subordinated notes due in 2007. The company's most advanced product candidate is ABX-EGF (panitumumab), a fully human monoclonal antibody in clinical development for cancer under a deal signed in July 2000 with Amgen's subsidiary Immunex. The antibody targets and inhibits the epidermal growth factor receptor (EGFr), which is overexpressed in a variety of cancers. Scientists have shown that cancer cells can become dependent for their survival on growth signals mediated through EGFr. The antibody was produced via Abgenix's genetically engineered XenoMouse.
Aradigm Corp.
Drug delivery company Aradigm has netted $11.75mm with a private placement of 8.3mm common shares priced at $1.50 each (a 16% discount to the market average) and warrants to buy 2.083mm additional common shares at $2.10 each. (Dec.)
The company is developing its Intraject needle-free drug delivery device for use with sumatriptan to treat acute migraine headaches. Aradigm is designing a next generation of its AERx pulmonary system (originally designed for inhaled insulin) to deliver the antibiotic ciprofloxacin for bioterror-related anthrax inhalation and other indications including cystic fibrosis and COPD. It is also developing a new version of the system, AERx Essence, for topical lung delivery of proteins and small molecules and systemic delivery of small molecules and peptides. Aradigm says the proceeds, combined with the money it is getting from its partner Novo Nordisk, will allow the company to continue its operations to 2007, when it expects to launch its first product. Investment Banks/Advisors: SG Cowen & Co.; Punk, Ziegel & Co.
Array BioPharma Inc.
Array BioPharma (develops orally active drugs) netted $67mm (including the overallotment) through a follow-on offering of 9.2mm common shares priced at $7.75 each. (Dec.)
The company's lead compound ARRY-142886--partnered with AstraZeneca under a December 2003 agreement--is a small molecule for advanced cancer that is currently in a Phase I trial to evaluate its tolerability and pharmacokinetics following oral administration. Preclinical trials demonstrated suppression activity against cancers including melanoma, pancreatic, colon, lung, and breast. Array has additional candidates in preclinical development such as p38 and MEK inhibitors for inflammatory diseases and ErbB-2 inhibitors for cancer. Investment Banks/Advisors: Piper Jaffray & Co.; Thomas Weisel Partners LLC; UBS Investment Bank; Legg Mason Wood Walker
Cell Therapeutics Inc.
Cancer drug company Cell Therapeutics netted $18.2mm through a registered direct offering of 2.6mm common shares priced at $7.10 each--a 9% discount to the market average. (Dec.)
CTI will put some of the proceeds towards expansion of its marketing activities for Trisenox, the company's first marketed product, which has been approved by the FDA to treat relapsed/refractory acute promyelocytic leukemia. It will also fund further clinical development of two late-stage candidates--Xyotax for non-small cell lung, ovarian, and other cancers, and pixantrone for non-Hodgkin's lymphoma. Cell Therapeutics recently announced its intention to in-license platinum-containing anticancer compounds from Roche and the University of Vermont. The company hopes to have the new bisplatinum compounds in human clinical trials by 2006.
CombinatoRx Inc.
CombinatoRx (combines approved drugs to treat diseases, though neither drug may have originally targeted the specific disease) has filed for its initial public offering, which could bring in up to $100mm for the company. (Dec.)
CombinatoRx has several compounds in development for immuno-inflammatory disease: four selective steroid amplifiers in clinical studies; a calcineurin inhibitor in Phase IIa trials to prevent organ rejection; and a synergistic cytokine modulator in Phase IIa studies to regulate immune and inflammatory responses in a patient's body and potentially treat rheumatoid arthritis, psoriasis, and inflammatory bowel disease. Additionally, CombinatoRx is developing CRx-026 for cancer--it is currently in four Phase I/II studies for advanced metastatic solid tumors--and also has preclinical compounds for Type II diabetes. Investment Banks/Advisors: SG Cowen & Co.; Pacific Growth Equities; SunTrust Banks; AG Edwards & Sons Inc.
Conor Medsystems Inc.
Conor Medsystems (vascular drug delivery) netted $70.8mm in its initial public offering with the sale of 6mm common shares priced at $13 each. (Dec.)
The company has developed drug-releasing stents to treat coronary artery disease. Its technology allows for the vascular delivery of therapeutics via hundreds of holes in the stent that serve as reservoirs for drug-polymer compounds (in contrast to traditional stents, which are solid bare metal coated with a drug). Conor's lead product candidate is Costar, a cobalt chromium paclitaxel-eluting stent to treat restenosis. The company is also researching the possibility of applying its technology to new treatments for myocardial infarction. Investment Banks/Advisors: AG Edwards & Sons Inc.; Citigroup Inc.; CIBC World Markets Corp.; SG Cowen & Co.
Cortex Pharmaceuticals Inc.
Cortex Pharmaceuticals (drugs for psychiatric and neurological diseases) has raised about $11.26mm with a private placement to 24 accredited institutional investors. The company sold approximately 4.2mm common shares at $2.66 each (at a 2% premium to market) and five-year warrants for an additional 2.1mm shares at $3 apiece. (Dec.)
Cortex will use the money to speed up the development of its drug candidates. The company specializes in Ampakine compounds, which target the AMPA receptor and enhance excitatory communication in the brain. (The balance between excitatory and inhibitory input determines each neuron's activity.) Cortex's compounds have demonstrated efficacy in partially or completely restoring levels of glutamate-mediated communication, a reduced level of which has been implicated in Alzheimer's disease, schizophrenia, and other CNS disorders. Investment Banks/Advisors: Rodman & Renshaw Inc.
Dov Pharmaceutical Inc.
Dov Pharmaceutical has brought in $65mm with the private placement of 2.50% 21-year convertible subordinated debentures to qualified institutional buyers under Rule 144A. The company has given the investors the option to buy another $15mm of the same type of debentures. (Dec.)
The holders can redeem the debentures in January 2012, 2015, 2020; or if the company experiences a "fundamental change" at 100% of the principal, plus interest. The debentures will convert into DOV common stock at the rate of 43.9560 per $1k invested or about $22.75 per share. DOV will use the proceeds for various company activities, including R&D and potential acquisitions or strategic investments. The company is developing indiplon (Phase III) for insomnia, ocinaplon (Phase II) for generalized anxiety disorder, and diltiazem (Phase I and III planned) for angina and hypertension. DOV also has several compounds in preclinical and Phase I/II studies for anxiety, substance abuse, Parkinson's disease, restless leg syndrome, and attention deficit disorder.
Genitope Corp.
Genitope (cancer immunotherapeutics) netted $57.2mm through the private placement of common stock to institutional and accredited investors. The company sold 4.25mm shares at $14.25 apiece (a 6% discount to the market average). (Dec.)
Genitope will put some of the proceeds towards leasing a new manufacturing facility, and also intends to use the money to fund the continuing clinical trials of its MyVax personalized immunotherapy. Dubbed a personalized cancer vaccine or patient-specific immunotherapy, MyVax combines a protein taken from a patient's own tumor with an immunologic carrier protein to create a therapeutic that stimulates immune response against only the malignant cells in the patient's body. The candidate is in Phase II and III trials to treat B-cell non-Hodgkin's lymphoma.
Genta Inc.
Genta (antisense therapeutics for cancer) netted $21.6mm through the private placement of 15mm common shares priced at $1.50 each (a 16% discount to the market average). The stock was sold to two institutional investors--Smithfield Fiduciary (managed by Highbridge Capital) and the Riverview Group (managed by Millennium Partners)--with each buyer investing an equal amount in the company. (Dec.)
Just weeks after Genta's former partner Aventis decided to withdraw (as a result of poor study findings) from the companies' 2002 $480mm pact to develop Genta's Genasense drug for solid tumors and blood cancer, Genta received word from results of another large trial showing that the candidate increased signs of remission in chemo patients with chronic lymphocytic leukemia. Analysts report that the spike in the company's stock price following the most recent announcement (50%) as well as the investment by Smithfield and Riverview have given Genta the boost it needed to continue development of Genasense and other projects in its pipeline. The company will also continue work on its small-molecule Ganite (gallium nitrate) that is in Phase II studies for hypercalcemia related to non-Hodgkin's lymphoma. Investment Banks/Advisors: Rodman & Renshaw Inc.
Herbalife International Inc.
Herbalife International (weight management, nutritional supplements, and personal care products) has completed its $175.8mm initial public offering. The company sold 13.5mm common shares at $14 each. Shareholders also sold 1mm shares as part of the offering. (Dec.)
Herbalife, which was established in 1980, will use the funds to redeem and repurchase most or all of its 11 ¾% senior subordinated notes due 2010 and part of WH Holdings' 9 ½% notes due a year later (WH Holdings is Herbalife's parent; it acquired the company in early 2002 for $685mm), to repay other debts, and to provide current shareholders with a cash dividend. Herbalife's weight management products consist of Personalized Protein Powder, Total Control dietary formula, ShapeWorks protein snacks and high-protein bars, and Formula 1 shake mix. The company's supplements include Niteworks to improve circulatory-vessel dilation and elasticity, Garden 7 containing antioxidants, aloe concentrate, and joint support therapeutics; and its personal care product offerings include cleansers, moisturizers, and conditioners such as Skin Activator cream, Radiant C body lotion, herbal aloe everyday shampoo, and Mystic Mask. Investment Banks/Advisors: Morgan Stanley & Co.; Merrill Lynch & Co. Inc.; Credit Suisse First Boston; Banc of America Securities LLC; Citigroup Inc.
Introgen Therapeutics Inc.
Introgen Therapeutics (gene therapies to treat cancer and other serious diseases) netted $22.6mm through the follow-on public offering of 3.45mm common shares (including the overallotment) priced at $6.65 each. (Dec.)
Mulier Capital acted as the placement agent. Introgen will use the proceeds to fund late-stage development of its lead candidate Advexin, which is currently in Phase II/III clinical trials to treat head and neck cancer. The drug induces therapeutic protein expression to fight cancer cells and is being evaluated both alone (in comparison to the traditional cancer treatment methotrexate) and in conjunction with two other chemotherapies--cisplatin and 5-fluorouracil. The gene therapy is also being studied in the treatment of non-small cell lung cancer (Phase II), breast cancer (Phase II), and advanced squamous cell esophageal cancer (Phase I/II).
Mesoblast Ltd.
Stem cell company Mesoblast Ltd. raised $21mm ($A16.4mm) with its initial public offering of 42mm shares priced at $0.39 each. (Dec.)
The company plans to use $10mm to purchase 33% of Angioblast Systems, which licensed Mesoblast exclusive global rights to develop a mesenchymal precursor cell (MPC) program in the area of orthopedics. Other funds will be used for preclinical and clinical development of adult stem cell therapies for orthopedic conditions in which traditional therapies are unavailable, such as for large bone fractures and to repair degeneration of cartilage and vertebral discs. The company believes INDs could be filed in two to three years. Eventually, Mesoblast intends to move into the area of cardiovascular diseases, saying it would deliver the cells by catheter directly to the heart following a heart attack. Mesoblast was founded in July 2004 by Silviu Itescu, a professor at Melbourne University and Columbia University. Investment Banks/Advisors: Lodge Partners
NexMed Inc.
NexMed has brought in $7mm with the private placement of 5.5mm common shares priced at $1.28 apiece (about the market average). The stock was sold to institutional and other accredited investors. (Dec.)
The backers also received five-year warrants to buy another 2.2mm common shares with the exercise price of $1.47 each plus one-year warrants to purchase an additional 550k common shares worth $2 apiece. NexMed will use the proceeds to continue the development of its product candidates that are based on its NexACT technology. NexACT can be used to transform off-patent pharmaceuticals from their present form into a different preparation such as a patch, tape, cream, gel, spray, ointment, or lotion. NexMed is looking for a development and marketing partner for Alprox-TD, a topically applied erectile dysfunction treatment, and for its antifungal lacquer for which NexMed has already filed an investigational new drug application.
Penwest Pharmaceuticals Co.
Drug delivery company Penwest Pharmaceuticals netted $32.8mm through the private placement of stock to institutional and other accredited investors. The company sold 3.125mm common shares at a price of $11.20 per share, representing a 9% discount to the market average. (Dec.)
Penwest's drug development efforts are centered around its TIMERx controlled release delivery system; the company has a handful of drugs on the market using this platform, including nifedipine (also known as Procardia, Slofedipine, and Cronodipin) for hypertension, and oxybutynin (Cystrin) for urinary incontinence. Penwest has two other systems in clinical development--Geminex, a bi-layer dual-release tablet that allows for the independent release of combined active ingredients, and SyncroDose, a technology that allows for site- and time-specific drug release. Candidates in the company's pipeline include late-stage compounds for pain, asthma, and hypertension as well as Phase I epilepsy, spasticity, schizophrenia, and pain therapeutics.
Prestwick Pharmaceuticals Inc.
CNS drug company Prestwick Pharmaceuticals has raised $37mm in its Series B round to new investor Pequot Ventures, which led the financing. Also participating were existing investors Sofinnova Ventures, Vivo Ventures, CNF Investments (the investment arm of Clark Enterprises), Atlas Ventures, and BA Venture Partners. (Dec.)
Concurrent with the financing, Pequot's Patrick Enright will join the Prestwick board. The company will use the money to develop and commercialize its CNS candidates. Its lead compound tetrabenazine--a dopamine depleter originally developed by Roche and licensed to Prestwick for the Canadian market by Cambridge Laboratories Ltd. in September 2004--is in Phase III to reduce the chorea (involuntary hyperkinetic movements caused by an overabundance of dopamine) associated with Huntington's disease. The candidate, which received US fast-track and orphan drug status (Prestwick expects to file an NDA with the FDA in the near future), is already on the Canadian market under the brand name Nitoman and sold in Europe and Australia as Xenazine for hyperkinetic movement disorders. Prestwick also has in Phase II development two formulations of lisuride, a dopamine agonist to treat Parkinson's disease originally developed by Schering AG and licensed to Prestwick by NeuroBiotec GMBH for the US and Canada in October 2003. The company's fourth candidate is Phase II PPI-00410, which it licensed from Harvard University to treat schizophrenia.
SemBioSys Genetics Inc.
Canadian antibody purification company SemBioSys has completed its IPO on the Toronto Stock Exchange, netting $13.9mm ($Cdn16.6mm) with the sale of 3.5mm units priced at $4.22 apiece. The units consist of one common share and one-half of a share warrant; each is redeemable during a two-year period following the closing for the purchase of one common share at a price of $Cdn6.25. (Dec.)
Using its oilbody-oleosin technology platform, SemBioSys genetically engineers oilseed plants producing large quantities of recombinant proteins at a low cost. The company's focus is on chronic diseases that affect large patient populations. It currently has two protein-based candidates in the research phase: insulin and drug delivery technologies for diabetes, and apolipoprotein A-I/apolipoprotein A-I Milano (together known as Apo AI) for cardiovascular disorders, specifically atherosclerosis, heart attack, angina, and stroke. The company has allocated $Cdn8mm for preclinical and Phase I development of its insulin and Apo AI candidates; $Cdn5mm for the construction of a protein production and Phase I and II clinical trials plant; $Cdn2mm for R&D of new candidates. Investment Banks/Advisors: Orion Securities Inc.; Raymond James Ltd.; First Associates Investments Inc.; Dlouhy Merchant Group Inc.
Sunesis Pharmaceuticals Inc.
Sunesis Pharmaceuticals (therapeutics for cancer and inflammatory diseases) has filed for its initial public offering. The company is hoping to bring in up to $86.25mm. (Dec.)
Sunesis, which was formed in 1998, is developing SNS-595, a Phase I anti-tumor drug candidate that was in-licensed from Dainippon Pharmaceutical in 2003. The company is also conducting preclinical studies on several aurora kinase inhibitors for tumors, developing Raf kinase inhibitors with Biogen Idec to control cell proliferation, and working with Johnson & Johnson to discover small-molecule inhibitors of Cathepsin S to activate T-cells and ultimately create therapeutics for asthma, rheumatoid arthritis, multiple sclerosis, psoriasis, and Crohn's disease. Sunesis has been collaborating with Merck since February 2003 to identify and optimize BACE inhibitors for Alzheimer's treatments and to create an antiviral inhibitor. Investment Banks/Advisors: SG Cowen & Co.; Lehman Brothers Inc.; Needham & Co. Inc.
VI Technologies Inc.
Anti-infectives company VI Technologies (Vitex) is raising $20mm through the sale of 100mm common shares priced at $0.20 each (a 70% discount to the market average) to lead investor Great Point Partners, along with backers from Panacos Pharmaceuticals including Ampersand Ventures and AM Pappas & Associates. Vitex also issued five-year warrants to buy an additional 45mm common shares of common stock at $0.24 each. (Dec.)
Investors will choose a representative to serve on the company's board. Vitex, which recently completed it merger with Panacos, plans to use the funds to continue clinical development of product candidates and create a strong anti-infectives portfolio. Concurrent with the financing, Panacos commenced a Phase IIa trial of PA-457, an oral HIV drug candidate that has a unique mechanism of action and demonstrated its ability to inhibit maturation of the HIV virus. The compound is designed to fight drug resistance, a problem that affects up to 67% of HIV patients being treated with currently available drugs. Investment Banks/Advisors: SG Cowen & Co.
Research/Analytical
Acquisitions
Invitrogen Corp.
Bio Asia
Hoping to become a leading research tools supplier in China, Invitrogen (technologies for disease research and drug discovery) is buying privately held Bio Asia for up to $8mm in cash. (Dec.)
Bio Asia's portfolio includes sequencing reagents and R&D services. The acquired company, which will be renamed Invitrogen China, will employ over 170 people and market specialized products and services to biotech and pharmaceutical companies and Chinese researchers. Invitrogen intends to customize products specifically for the Chinese market and, over the next five years, says it plans to invest in excess of $20mm in that country.
Joint Arrangements
Illumina Inc.
Invitrogen Corp.
Invitrogen (life science research products) and Illumina (tools to analyze genetic variation and function) will collaborate to provide high-quality oligonucleotides (oligos) to life sciences customers worldwide. (Dec.)
Illumina will contribute its Oligator DNA synthesis technology while Invitrogen adds its experience in sales, marketing, and distribution. Illumina's Oligator synthesis technology enables the production of plate-scale amounts of oligos for use in high-throughput genotyping, sequencing, gene expression analysis, and PCR. Invitrogen has agreed to invest in Illumina's facility in San Diego to help it devise a fourth-generation Oligator and expand the technology into the tube-based oligo product market. The Illumina technology will also be implemented at two Invitrogen facilities outside North America. The companies will split all resulting profits 50/50.
Financings
Bio-Rad Laboratories Inc.
Bio-Rad Laboratories (manufactures and distributes life science research products) has sold $200mm in a private placement of ten-year 6 1/8% senior subordinated notes under Rule 144A. (Dec.)
Bio-Rad will use the funds for various company activities, including potential acquisitions. The company provides pharmaceutical, biotech, and academic institutions with tools and equipment necessary to perform research, including expression proteomics, electrophoresis, gene transfer, imaging, and the creation of multiplex suspension arrays.
Serologicals Corp.
Serologicals Corp. raised net proceeds of $105.16mm (including the overallotment) through a follow-on offering of 4.83mm common shares priced at $22.80 each. Selling stockholders placed an additional 1.36mm shares. (Dec.)
The company says it will use the majority of the net funds ($80mm) to repay outstanding debt. Serologicals offers biological products, technologies, and services to various life science companies and research institutions in areas that include oncology, hematology, immunology, cardiology, neurology, proteomics, infectious diseases, cell signaling, and stem cell research. The company also provides monoclonal antibodies for blood-typing. In February 2003 it acquired Chemicon International to further improve its position in the life sciences research market. More recently, in September the company bought Upstate Group for $205mm in cash and stock to increase its presence in the areas of kinase screening and protein interaction. Investment Banks/Advisors: JP Morgan Chase & Co.; Pacific Growth Equities; Banc of America Securities LLC
Supplies, Equipment & Devices
Acquisitions
Boston Scientific Corp.
Advanced Stent Technologies Inc.
Boston Scientific has agreed to acquire Advanced Stent Technologies. (Dec.)
AST, which was formed in 1997, develops stents and stent delivery systems that treat coronary artery disease in bifurcated vessels. The company's Petal stent has typical stent features at either end, with a petal shape in the middle to expand the side of the vessel, enabling blood to flow into both branches of the bifurcated vessel and to support the branch. Boston Scientific will use this device in conjunction with its own Taxus paclitaxel-eluting coronary stent system.
Carl Zeiss AG
Sola International Inc.
In its largest transaction, Carl Zeiss AG is buying eyeglass manufacturing company Sola International together with Swedish private equity firm EQT Fund III in a deal worth €882mm ($1.19bn), or 1.77 times Sola's sales revenue for the 12 months ending September 2004. (Dec.)
Zeiss and EQT are each offering 50% of a total $902mm in cash ($28 for each Sola's 32.2mm outstanding common shares, a 32% premium to the market average), and they will assume $285mm of the company's debt. Zeiss will combine Sola with its spectacles business to create a new company, which will be one of the world's largest lens manufacturers (with 9,000 employees and annual revenues expected to be approximately $600mm). Sola, which now has 6,800 employees and locations in 27 countries, says the deal is a good strategic fit, allowing it to strengthen its presence in Europe and the Asia Pacific region. The company sells its glass and plastic lenses worldwide under the SOLA and American Optical brandnames--these include SOLAOne, SOLAMax, AO ProEasy, AO Compact, and AO b'Active--through retail chains, wholesalers, independent optometrists and opticians, and in the US to managed care organizations. Investment Banks/Advisors: UBS Securities LLC (Sola International Inc.)
Johnson & Johnson
Cordis Corp.
Guidant Corp.
Johnson & Johnson has agreed to acquire Guidant for approximately $25.38bn in cash and stock. Guidant shareholders will receive $30.40 in cash and $45.60 in J&J common stock, a 7% premium. The total consideration per Guidant share may be adjusted if J&J's trading price goes outside an agreed limit in the period before the deal closes. (Dec.)
J&J's Cordis Corp. division and Guidant will form part of a new cardiovascular device unit; it will operate under the Guidant name, keeping the Cordis name for certain businesses within the unit, which will focus on heart failure and sudden cardiac death. J&J may use Guidant's implantable micro-electronics and other technologies in new products it develops to address the neuromodulation market. Guidant's product offerings include the clampless Heartstring proximal seal system; various implantable cardioverter defibrillators to treat abnormal heart rhythms; Contak Renewal cardiac resynchronization therapy (CRT) pacemaker, EasyTrak coronary venous lead, also for CRT; Rapido dual catheter system used in left ventricular lead placement; and Voyager, FX miniRail, Crosssail, and Opensail catheter systems. The company also markets the Rx Acculink carotid stent system and the Rx Accunet embolic protection system. The acquisition of Guidant gives J&J defibrillators and pacemakers and enables the company to improve its market hold for stents. J&J currently sells its Cypher drug-coated stents through Cordis, which is reported to have a 35% share of the market.
Smiths Group PLC
Medex Inc.
In its largest deal, UK engineering company Smiths Group (medical and detection equipment) has agreed to buy privately held Medex, a US critical-care medical device company that is 83.2% owned by JP Morgan Chase affiliate One Equity Partners. The deal is valued at £477mm ($925mm), consisting of $625mm in cash and $300mm in assumed debt, or almost three times Medex revenues for the 12 months ending September 2004. (Dec.)
Medex, which has about the same customer base as Smiths, markets its therapeutic and diagnostic products--with a specialty in intravenous infusion catheters that prevent needle stick accidents--to over 5,500 hospitals and health care systems in more than 75 countries. The catheters complement Smiths' Needle-Pro line of safety devices and ambulatory infusions pumps; other Medex items include prepackaged single-use catheterization products, complementing Smiths' anesthesia kits. In May 2003, Medex created a complete line of infusion system offerings (pumps, fluid and drug administration products, and IV catheters) by acquiring the vascular access business of Johnson & Johnson's Ethicon Endo-Surgery. Smiths has been in acquisition mode for the last year-and-a-half as it wants to enhance its position in the health care industry, particularly the global critical-care medical device field. In July 2004, it bought respiratory device company DHD Healthcare; four months earlier, it acquired Cyrano Sciences (artificial olfaction technology). In April 2003, it purchased the sharps safety line of the disposable infusion products maker MPS Acacia. Investment Banks/Advisors: Morgan Stanley & Co.; Credit Suisse First Boston (Smiths Group PLC); Credit Suisse First Boston; Banc of America Securities LLC (Medex Inc.)
WL Gore & Associates Inc.
ArteriA Medical Science Inc.
WL Gore & Associates (devices and products used in surgical procedures) has acquired just about all of ArteriA Medical Science's (embolic systems) assets. (Nov.)
The acquisition of ArteriA will broaden Gore's portfolio of neurointerventional devices, such as the Gore Excluder endoprosthesis to treat abdominal aortic aneurysms; synthetic vascular grafts; surgical meshes used in hernia repair; and vascular, cardiac, orthopedic, and general sutures. ArteriA developed and manufactured Juan C. Parodi, MD's Parodi Anti-Emboli System and its successor, PAES II, which use flow-reversal technology to lower the risk of stoke during carotid angioplasty and stenting. The device can temporarily reverse the way the blood is flowing in an artery, and it helps catch and remove small plaque particles instead of letting them travel upstream into the brain, where they can cause a stroke or possibly death. PAES is currently sold to surgeons in Europe and other countries and is classed as an investigational device in the US.
Joint Arrangements
Artimplant AB
Avanta Orthopedics LLC
Avanta Orthopedics LLC (develops and manufactures implants for upper extremities) received a worldwide license to supply and distribute orthobiologics company Artimplant AB's Artelon CMC-I spacer, a bioabsorbable implant technology for treating arthritis in the carpometacarpal joint (CMC-I) at the base of the thumb. (Dec.)
The Artelon CMC-I spacer received FDA approval in September, and Avanta intends to launch it early next year in the US, where the company calls itself a market leader in surgical implants for the hand and upper extremities. Artimplant plans to continue marketing the technology in Nordic countries under the current Artelon name. Artelon is an improvement over tendon interposition because it does not require the trapezial bone to be removed. It also allows for improved thumb function and grip strength, stable CMC joints, and pain relief.
Nucletron BV
Proxima Therapeutics Inc.
Nucletron will be the exclusive distributor in Australia and New Zealand of a breast cancer irradiation system produced by fellow radiotherapy company Proxima Therapeutics. (Dec.)
Proxima received clearance by the FDA in 2002 for MammoSite and has been successfully marketing it in the US. The partial breast irradiation therapy system is a five-day course of treatment, as opposed to traditional external beam radiation therapy that requires daily treatments for seven weeks. Administered following a lumpectomy, it delivers radiation only to tissue immediately surrounding the area of a removed tumor. A balloon carrying a tiny radioactive seed is delivered directly to the treatment site via a catheter; healthy tissue around the area is left unaffected, and no radiation remains in the body following each outpatient procedure. Nucletron and Proxima believe that Australia and New Zealand will be strong markets for the device since women there have often had to travel long distances over an extended period to get radiation therapies.
Financings
CABG Medical Inc.
Cardiovascular device company CABG Medical has sold 5.5mm shares at $5.50 apiece in its initial public offering for net proceeds of $27mm. (Dec.)
CABG has developed an alternative to traditional coronary artery bypass graft (CABG) surgery. The company's Holly Graft System uses a 6mm polytetrafluroethylene flexible graft (instead of a vessel harvested from the patient's leg or arm) attached with a drug-coated connector and bloodflow limiter at one suture point in the aorta. Advantages over conventional CABG procedures include continuous high bloodflow (due to the flow limiter and drug coating that reduce the risk of thrombosis), larger diameter conduit compared to a harvested vessel, and faster recovery because of the reduced risk of swelling, infection, and pain normally associated with this procedure. The company hopes to initiate international human clinical trials in late 2004 or early 2005. Investment Banks/Advisors: Feltl and Co.; Ladenburg Thalmann & Co. Inc.
Rita Medical Systems Inc.
Rita Medical Systems (radiofrequency ablation devices) has netted $11mm with the private placement of 4.4mm common shares priced at $2.75 each (about the market average) to institutional and accredited investors. The backers also received warrants to buy another 3.3mm common shares at $4. (Nov.)
The company's offerings are used to treat patients with cancer and include radiofrequency ablation (RFA) systems for cancerous tumors; implantable ports that use its VTX technology; and tunneled central venous and stem-cell catheters. It also provides percutaneous vascular and spinal access devices. Rita was the first RFA company to gain FDA clearance for unresectable liver lesions in addition to its ablation of soft tissue; it was also the first to get FDA clearance for palliation of pain that accompanies metastatic lesions in bones. Investment Banks/Advisors: Wells Fargo Securities LLC © 1999 Windhover Information Inc., South Norwalk, CT--Page --Current Query: