Deals Shaping the Medical Industry (03/08)
Executive Summary
The dealmaking column is a survey of recent transactions, including strategic alliances, mergers & acquisitions, and financings, in the life sciences industries. Deals are listed by the following industry sectors: in vitro diagnostics, pharmaceuticals, medical devices, and research/analytical instrumentation and reagents. All transactions are excerpted from Windhover's Strategic Transactions database, providing comprehensive transaction coverage from 1991 to the present.
In Vitro Diagnostics
Alliances
Abbott Laboratories Inc.
Abbott Molecular Inc.
Luminex Corp.
Luminex Molecular Diagnostics
Luminex Molecular Diagnostics has licensed Abbott Molecular exclusive rights to sell its xTAG respiratory viral panel (RVP) worldwide outside the US, with Abbott getting semi-exclusive distribution rights in the US. (Feb.)
Luminex's xTAG is based on the company's xMAP technology, which combines flow cytometry, microspheres, lasers, digital signal processing, and traditional chemistry to quickly, accurately, and cost-effectively perform a wide variety of bioassays. The xTAG RVP platform can detect the presence or absence of various viruses and viral subtypes from a single sample, giving doctors results in just hours. The product gained 510(k) clearance from the FDA last month and has had the CE Mark in Europe since late 2006. In the US, xTAG RVP was approved for adenovirus, influenza, metapneumovirus, parainfluenza, respiratory syncytial virus, and rhinovirus; in addition to those viruses and their subtypes it has European approval for corona virus, enterovirus, and SARS.
ACS Biomarker BV
BG Medicine Inc.
ACS Biomarker (formed to develop and commercialize discoveries made at the University of Maastricht and the Cardiovascular Research Institute Maastricht (CRIM)) has licensed BG Medicine (molecular diagnostics) exclusive worldwide marketing rights to develop and market a test for acute atherothrombosis (the rupture of vascular plaque that causes clotting in the artery) based on a CRIM biomarker. (Feb.)
BG will be in charge of validation and gaining regulatory approval; in exchange it will provide milestones, royalties, and sub-licensing income for resulting products. The company expects to create a test to identify plaque rupture at an early point--when there is a temporary or partial blockage and the patient has not experienced any symptoms of myocardial infarction (MI) or stroke. The diagnostic may be used to determine transient ischemic attacks and unstable angina, both precursors to MI. This is the second agreement BG and ACS have signed; the first was in mid-2007 under which BG got rights to develop and test for congestive heart failure based on an ACS biomarker.
Applera Corp.
Celera Group
Lab21 Ltd.
Celera licensed diagnostics company Lab21 rights to market in the UK and Ireland its CRS7 test for determining which HCV patients are at risk for liver fibrosis and cirrhosis. (Feb.)
The diagnostic is the first of its kind and has been validated in clinical trials in North America. With its expertise in the field of liver disease diagnostics, Lab21 will sell the licensed test to clinics, hospitals, and research centers throughout the UK and Ireland. CRS7 can help physicians better manage the treatment that HCV patients receive and improve their outcomes.
Clarient Inc.
CombiMatrix Corp.
Clarient (technologies for cancer diagnostics and drug development) will sell CombiMatrix's HemeScan genomics-based oncology test. (Jan.)
Following its discovery by CombiMatrix, HemeScan was validated by researchers at MD Anderson Cancer Center, the University of Texas Health Science Center, and the [Netherlands Cancer Institute] to test for and manage blood cancers, including chronic lymphocytic leukemia (CLL), acute lymphoblastic leukemia (ALL), and myelodysplastic syndrome. It works by predicting, at the time of diagnosis, the outcome of hematological cancers by evaluating the genomic content of cells. Clarient will market HemeScan to pathologists, oncologists, and patients alongside its own immunohistochemistry, flow cytometry, FISH, and molecular and nucleic acid diagnostics.
DxS Ltd.
Genzyme Corp.
Genzyme Genetics
Genzyme Genetics has sublicensed molecular diagnostics company DxS global rights (excluding North America and Hong Kong) to commercialize diagnostic and research applications for non-small cell lung cancer. (Feb.)
The license covers products that can detect mutations in the epidermal growth factor receptor (EGFR) gene specifically in the kinase domain. In 2005, Genzyme received exclusive worldwide rights to the EGFR diagnostics from the Dana Farber Cancer Institute and [Massachusetts General Hospital]. In Europe, DxS already sells a test for EGFR mutations that can help doctors determine which lung cancer patients would benefit from tyrosine kinase inhibitor therapies including OSI Pharmaceuticals's Tarceva and AstraZeneca's Iressa.
Mankind Pharma Ltd.
Roche
Roche Diagnostics
Roche Diagnostics Corp. has licensed Indian firm Mankind Pharma exclusive rights to sell its Accu-Chek Go glucose monitor in India. (Feb.)
Mankind believes its sales force will make the device available in 500 Indian cities. Through the deal, the companies hope to increase diabetes awareness and compliance with home glucose testing. Providing results within five seconds, Accu-Chek Go only requires a small blood sample--1.5 microliters--and has multiple features including alarms and adjustable glucose level target settings. Accu-Chek Go is the newest monitor launched under the Accu-Chek brand, made up of glucose meters, insulin pumps, lancing devices, software, and several other products, that has been around for over thirty years (first introduced by Boehringer Mannheim, which was acquired by Roche's diagnostic division). The deal with Roche marks Mankind's first foray into diagnostics. Since its 1995 founding, Mankind has focused on the pharmaceutical industry. Accu-Chek Go will complement Mankind's existing diabetes portfolio, which includes several metformin drugs.
Pharmaceuticals
Acquisitions
Adamis Pharmaceuticals Corp.
Cellegy Pharmaceuticals Inc.
Adamis Pharmaceuticals (infectious and viral and allergy medicines) has agreed to buy publicly traded Cellegy Pharmaceuticals (women's health therapeutics) in a reverse merger. (Feb.)
Prior to the acquisition Cellegy plans a reverse stock split for its common stock; each share will convert into the number of shares equal to 3mm plus the company's net working capital divided by $0.50 (between 8.5 to 1 and 9.95 to 1). Each Adamis common share will be converted into the right to obtain one Cellegy share. Cellegy stockholders will hold between 4-6% of the outstanding shares post-merger; the combined company will trade publicly under a different corporate name with Adamis' CEO retaining his title. Cellegy, which had $2.2mm in cash and a net loss of $1.3mm for the nine months leading up to September 2007, will loan Adamis $500k for operations until the merger finalizes. In the last two years Cellegy was forced to stop a Phase III trial in Nigeria for its Savvy contraceptive vaginal gel designed to reduce the risk of HIV infection, because it failed to prove effective, and it sold ProStrakan rights to its nitroglycerin ointment Cellegesic and three formulations of testosterone gels: Fortigel, Tostrex, and Tostrelle. Adamis is focused on developing pharmaceuticals to treat various types of influenza, allergies, respiratory diseases, and pediatric conditions.
Alpharma Inc.
Affiliates of venture capitalist 3i have agreed to purchase the active pharmaceutical ingredient business of Alpharma (drugs for humans and animals) for $395mm in cash ($365mm net of taxes, fees, and other expenses). (Feb.)
Headquartered in Oslo, the API unit services customers primarily in the North American pharmaceutical industry through manufacturing plants in Denmark, Norway, Hungary, and China. It sells 14 APIs, most of which are fermented antibiotics--such as bacitracin, tobramycin, and amphotericin B--that are produced as finished-dose brand or generic drugs for skin, throat, intestinal, and systemic infections. One of the division's major APIs is vancomycin (sold by ViroPharma as Vancocin). Recently Alpharma secured several agreements with Chinese partners Hisun Pharmaceutical and Zhejiang Hisun Pharmaceutical to improve manufacturing of the intestinal antibiotic. Revenues for the API business increased 22% to $168.7mm in 2006 and reached $138.7mm for the first three quarters of 2007. Due to reduced pricing, 2006 net income, on the other hand, declined slightly to $51.8mm and is reported at $30.7mm for the first three quarters of 2007. Alpharma is now left with two core divisions: pharmaceuticals and animal health (the company divested its generics unit to Actavis in 2005 for $810mm). Lately Alpharma has been focusing more on its prescription pain drug business. Last year the drug maker bought rights to NSAIDs from Idea and Institut Biochimique, and it signed an alliance with Tris to develop new formulations of Kadian, Alpharma's leading morphine brand. Investment Banks/Advisors: Banc of America Securities LLC (Alpharma Inc.)
Cypress Bioscience Inc.
Proprius Pharmaceuticals Inc.
Cypress Bioscience (lead compound is for fibromyalgia syndrome) is acquiring private pharmacogenetics company Proprius Pharmaceuticals for $37.5mm in cash plus another $37.5mm for Phase III development milestones to be paid in cash, stock, or a combination of both. (Feb.)
As a result of the merger, Proprius will be integrated into Cypress and its president and CEO will become EVP and chief commercial officer. Proprius, which was founded in 2005, is developing personalized therapeutics and diagnostics aimed at rheumatoid arthritis. It also is working on an assay to monitor a patient's metabolism of methotrexate polyglutamates. Cypress will eventually market Proprius's products along with its milnacipran for fibromyalgia, (which is currently under FDA review) to rheumatologists and other pain specialists. Cypress financed the transaction using its cash-on-hand of $182mm. Early last year Proprius raised $11mm in its Series A round. Investment Banks/Advisors: Oppenheimer & Co. Inc. (Cypress Bioscience Inc.); Jefferies Group Inc. (Proprius Pharmaceuticals Inc.)
Dynogen Pharmaceuticals Inc.
Private biotech Dynogen (GI and uro/gyn treatments) has agreed to merge with Apex Bioventures, a special purpose acquisition company, and take on its public status. (Feb.)
Apex will issue 13.5mm of its shares (valued at $98mm based on the pre-announcement average), giving Dynogen a 56% ownership in the combined company, which will retain the Dynogen name, be led by the biotech's current president and CEO, and have $65mm in cash on hand. Dynogen shareholders are also eligible for an additional 6.3mm Apex shares (worth $46mm at the current stock price) from two separate earn-out payments tied to the dosing of the first patients in US Phase III trials in two indications. Since its 2002 founding, Dynogen has focused on acquiring and developing compounds with known safety and pharmacokinetics profiles. It stepped up its clinical development efforts two years ago after divesting its research operations to Astellas Pharma. Dynogen's lead candidates--both in-licensed from Mitsubishi Pharma several years ago--are DDP733 (pumosetrag), a 5HT3 partial agonist in Phase IIb for IBS with constipation and in Phase I for nocturnal GERD; and DDP225, a small-molecule 5HT3/noradrenaline reuptake inhibitor in Phase IIa for diarrhea-predominant IBS and in preclinical studies for overactive bladder. Last month Dynogen strengthened the patent protection on the latter compound when it licensed rights to Arachnova's IP. Dynogen believes that sales for DDP733 and DDP225 could potentially pass the billion-dollar mark. The company's pipeline also contains DDP200, a gabapentin/oxybutynin combination for overactive bladder. An IND is planned for the end of 2008. To date Dynogen has raised over $67mm through venture financings, including a $13.25mm Series A shortly after it was founded and a $50mm second round in 2004. Investment Banks/Advisors: Aquilo Partners Inc. (Dynogen Pharmaceuticals Inc.)
Fujifilm Holdings Corp.
Toyama Chemical Co. Ltd.
To diversify into the pharmaceutical industry, Fujifilm Holdings (photographic film, copiers, and camera supplies) is buying a 66% stake in Toyama Chemical for $1.1bn (Y114.5bn), paying $8.15 per share. In addition, Taisho Pharmaceutical will increase its stake in Toyama from 22% to 34%. (Feb.)
The deal gives Fujifilm the Phase II influenza compound T705 that may eventually compete with Roche's Tamiflu, which generated sales of $2bn in 2006. T705 has an advantage over Tamiflu because it may potentially treat avian flu, drug-resistant strains of the virus, and Rift Valley fever. According to Toyama, the drug could be available in the US by the end of 2009. Toyama has twelve other compounds in development for indications including hepatitis C and Alzheimer's disease. Due the high demand for digital photography and the decline in the sales of photo film, Fujifilm's new strategy is to become a health care company focused on disease prevention, diagnosis, and treatment. The company will combine its own FTD (formulation, targeting, delivery) technologies such as nanoparticalization with Toyama's strong drug development platform. In 2002, Taisho and Toyama formed the joint venture Taisho Toyama Pharmaceutical to market both companies' pharmaceutical products in Japan. They also signed an agreement that would expand Taisho's prescription drug business and strengthen Toyama as an R&D company. At that time, Taisho purchased 22% of Toyama's outstanding shares. For fiscal year 2007, Toyama had sales of $155mm and cash of $75mm. Investment Banks/Advisors: Nomura Securities International Inc. (Fujifilm Holdings Corp.)
Laboratoires Galderma SA
Galderma Laboratories Inc.
CollaGenex Pharmaceuticals Inc.
Privately held Galderma Laboratories has agreed to buy fellow dermatology company CollaGenex Pharmaceuticals for $420mm in cash or $16.60 (a 30% premium) for each outstanding share. (Feb.)
CollaGenex will become a wholly owned subsidiary of Galderma. CollaGenex's therapeutics include the marketed products Oracea (rosacea), Alcortin (a topical antifungal-steroid combination drug), and Novacort (topical steroid and anesthetic). It is also developing COL118 (Phase II for redness due to rosacea and other skin conditions), and it has rights to develop and market QuatRx's becocalcidiol (a vitamin D analogue in Phase II for mild-to-moderate psoriasis). They will fit with Galderma's marketed products Differin (acne), Metrogel and Rozex (both for rosacea), Clobex (psoriasis), Tri-Luma (melasma), Loceryl (fungal nail infections), and Cetaphil (dry skin). Investment Banks/Advisors: Credit Suisse Group (Galderma Laboratories Inc.); Cowen & Co. LLC (CollaGenex Pharmaceuticals Inc.)
ImmunoCellular Therapeutics Ltd.
ImmunoCellular Therapeutics (ICT; vaccines and treatments for cancer and neurodegenerative diseases) has purchased monoclonal antibody technology and assets from Molecular Discoveries LLC, a privately held company that has been virtually stagnant in its business operations since 2001 after failing to find a partner to further develop projects. (Feb.)
ICT issued 800k of its own shares (valued at $816k) and will reimburse certain patent expenses. ICT takes on Molecular Discoveries' DIAAD (Differential Immunization for Antigen or Antibody Discovery) monoclonal antibody discovery platform that coupled with certain MAbs and other technologies could be used to detect and treat multiple myeloma as well as pancreatic, ovarian, and small cell lung cancers. DIAAD subtracts out the dominant antigens from an immune response and then reintroduces them into the body to illicit antigen activity and fight disease. ICT plans to develop a diagnostic/prognostic for small cell lung cancer, as well as a therapy for small cell lung and pancreatic cancers based on the acquired MAbs. The company's most advanced candidate is a Phase I dendritic cell-based therapeutic vaccine for brain tumors.
Nano Chemical Systems Holdings Inc.
Calgenex Corp.
Nano Chemical (using nanomaterials and titanium dioxide technologies to create product-specific nanoparticles) has signed a letter of intent to acquire Calgenex, a company that develops and markets dietary supplements and topical over-the-counter therapeutics and personal care products. (Jan.)
Calgenex sells its products to US doctors and direct-to-consumers over the Internet. Its offerings include nutraceuticals such as Calci-Clear for soft tissue calcification, Omeganol for cholesterol, and Dermalleve for psoriasis and eczema. Nano Chemical has two subsidiaries--Nano Chemical Systems, its R&D arm, and SeaSpray Aerosol, which makes janitorial and industrial products, waxes, lubricants, and polishes.
Newron Pharmaceuticals SPA
Hunter-Fleming Ltd.
CNS-focused Newron Pharmaceuticals SPA is issuing stock worth €8mm ($12mm; about 413k shares based on the pre-announcement average) to acquire privately held Hunter-Fleming (neurodegeneration and anti-inflammatory drug candidates). (Feb.)
Newron may also pay up to €17mm in stock earn-outs over 5-6 years tied mainly to clinical and regulatory milestones of H-F's lead compound HF0220 (7 beta-hydroxy-epiandrosterone). The neuroprotectant is in Phase II for Alzheimer's disease and should enter Phase II for rheumatoid arthritis later this year. Rounding out H-F's pipeline--which consists of in-licensed molecules from academia including the University of Oxford and University of Bristol--are HF0420, a low-weight oligosaccharide in Phase I for chemotherapy- or radiation-induced neuropathy; Phase I HF0299 for neuropathic and inflammatory pain; and the HF1220 discovery program for neuroprotection. H-F has raised £20mm in venture financings since its 1999 founding. The acquisition will help Newron build up its own neuroinflammation pipeline, which is led by Phase III salfinamide (partnered with Merck Serono) for Parkinson's and Alzheimer's. In addition, Newron also inherits H-F's 17% stake in Trident Pharmaceuticals, a special-purpose financing vehicle set up in 2006 by H-F and private equity firm Advent International to speed up development of HF1020, a preclinical T-cell-activating protein therapeutic for asthma and autoimmune diseases.
Numerate Inc.
Numerate (drug engineering) has acquired Pharmix, a private company focused on computerized design of small-molecule therapeutics that closed operations last year. (Feb.)
Pharmix, which was established in 2000 and brought in $10.5mm through its Series A in 2002, designed drug candidates for other companies and, in exchange, gained a share of royalties from the resulting products. Numerate was formed in early 2007 with the goal of purchasing Pharmix's assets, such as the Drug Engineering process and related IP. Numerate also owns Pharmix's internal programs--HMG-CoA reductase and p38 MAP kinase inhibitors for Type II diabetes and cardiovascular disease; transglutaminase 2 inhibitors for cancer and Celiac sprue; non-nucleoside reverse transcriptase inhibitors for HIV/AIDS; and topical compounds for inflammation. Numerate's CEO Guido Lanza co-founded Pharmix and served as its chief technology officer and is joined at the new company by several former Pharmix employees. Numerate has already secured an alliance with Presidio Pharmaceuticals to work on hepatitis C drug candidates and hopes to close its Series A before the end of the year.
Pfizer Inc.
Encysive Pharmaceuticals Inc.
In an effort to strengthen its portfolio of high blood pressure products, Pfizer is acquiring all outstanding shares of Encysive Pharmaceuticals for $2.35 each (a 185% premium to the 10-day average) in cash, a total of about $191mm. (Feb.)
On the day of the announcement Encysive's stock priced jumped to $2.27 from $1.08 and $0.85 on the previous two days. Encysive's Thelin (sitaxsentan) for pulmonary arterial hypertension is a good fit with Pfizer's PAH treatment Revatio (sildenafil) and high blood pressure drug Norvasc (amlodipine), which went off patent last year. Once-daily Thelin has a different mechanism of action than Revatio and works by blocking receptors to endothelin, a protein that causes the blood vessels to tighten. The drug is a small-molecule endothelin A receptor antagonist that received approval in the EU, where it is currently sold in several countries, as well as Australia and Canada. Pfizer will perform Phase III trials in the US to support FDA approval. The acquired company also has an FDA-approved treatment for heparin-induced thrombocytopenia, Argatroban, which is marketed through partner GlaxoSmithKline, and Phase I TBC3711 for PAH. As of September 2007, Encysive reported cash-on-hand of $54mm and revenues of $23mm. The company estimates Thelin's 2007 sales were about $11mm and could increase to $50mm in 2008. Should the merger fall through, Encysive would pay Pfizer a $7.7mm termination fee. Investment Banks/Advisors: Lazard LLC (Pfizer Inc.); Morgan Stanley & Co. (Encysive Pharmaceuticals Inc.)
Progen Pharmaceuticals Ltd.
CellGate Inc.
Australian cancer therapeutics company Progen Pharmaceuticals Ltd. has acquired privately held CellGate (oncology) for stock, earn-outs, and the assumption of debt. (Feb.)
Progen will issue 756k of its own shares (valued at $1.4mm based on the market average), take on about $1mm in debt, and could pay up to an additional $19.5mm, in stock and/or cash, in development- and regulatory-based earn-outs. The acquired entity was renamed Progen Pharmaceuticals Inc., and will be operated as a wholly owned subsidiary. CellGate's lead cancer program is CGC11047, a polyamine analog in Phase I clinical trials. CellGate also brings Progen other early clinical-stage projects, and over ten preclinical compounds, all developed using the company's work with polyamines and epigenetics (silencing cancer-related gene expression). Progen will benefit from CellGate's US presence and R&D infrastructure, which will help Progen move its own projects (including PI88, entering Phase III for post-resection liver cancer) further into development.
Z-Tech (Canada) Inc.
Inflazyme Pharmaceuticals Inc.
Private medtech company Z-Tech (Canada) Inc. has agreed to merge with and take on the public status of fellow Canadian firm Inflazyme Pharmaceuticals. The combined entity will be called Z-Tech Medical. (Jan.)
Z-Tech will issue shares worth $Cdn4.5mm ($4.4mm) to Inflazyme stockholders. The deal is contingent upon Z-Tech completing a $Cdn10mm private placement. A 2000 spin-out of the University of Toronto, Z-Tech is working on a breast cancer-screening device for physician office use. The Azura BreastScan system, which recently completed a Phase I study, consists of SuperStellate sensors that pass an electric current through the breast, and an interface instrument connected to a computer, which guides the test and calculates and provides results (called Homologous Electrical Difference Analysis (HEDA)) in real time. A decrease in electrical resistance can be a marker of cancerous tissue, which has higher volumes of fluid and is more electrically porous. A PMA submission is expected next year. Since September 2007, sixteen-year-old Inflazyme has been operating without pharmaceutical assets; however, it does have approximately $Cdn4.8mm cash on hand as of the end of 2007. For the past two years, Inflazyme has not been profitable, suffering a net loss of $Cdn15.4mm for the FYE March 31, 2007. As part of a corporate restructuring begun in early 2007, Inflazyme recently sold Biolipox (now part of Orexo) most of its R&D projects including a Phase II LSAID for asthma, a Phase II PDE blocker for memory disorders, and several anti-inflammatory protein drug compounds.
Alliances
4SC AG
AiCuris GMBH & Co. KG
German companies 4SC AG (cheminformatics technology) and AiCuris GMBH (infectious disease therapeutics) seek to develop new anti-infective compounds. (Feb.)
During the initial research phase, 4SC will provide AiCuris with its medicinal chemistry capabilities, including the 4SCan high-throughput screening technology. In return, 4SC receives funding to continue its in-house pipeline development. In the next few months, the parties may choose to expand the agreement. AiCuris was spun off from Bayer HealthCare AG in early 2006 and has been developing therapeutics for viral and bacterial infections. The 4SCan technology can predict molecular efficacy based on protein structures, homology modeling, or the biological activity of existing compounds.
Acceleron Pharma Inc.
Celgene Corp.
Acceleron Pharma (developing therapeutics that promote bone growth) and Celgene (cancer and inflammatory disease treatments) will together develop Acceleron's ACE011 bone-forming compound that is in Phase IIa clinical trials in cancer patients. (Feb.)
Acceleron gets $50mm up front--$5mm of it is in the form of an equity investment and upon an IPO, it could receive another $7mm investment. Acceleron will continue developing the compound through the end of Phase IIa, after which point Celgene will take over Phase IIb and Phase III trials and assume manufacturing activities. Acceleron pays a portion of development costs, and could receive up to $510mm in development, regulatory, and sales milestones for ACE011, and up to $437mm for each of three discovery-stage programs also involved in the deal. The partners will co-promote resulting products in North America, and Acceleron will receive tiered royalties on worldwide sales. ACE011 inhibits activin, a negative regulator of bone mass in the body that prevents new bone formation and results in decreased bone mineral density and bone strength. The compound allows the body to rebuild bone mass in patients with multiple myeloma and other types of cancer that cause bone fragility.
Acorda Therapeutics Inc.
Neurorecovery Inc.
Neurological dysfunction company Acorda Therapeutics is issuing 100k shares of its stock valued at $2.5mm (based on the pre-announcement average) to buy several assets from Neurorecovery (peripheral nerve drug candidates). (Feb.)
The assets include Neurorecovery's two preclinical compounds GABAmide (GABA receptor modulator; epilepsy and neuroprotection) and CM-Sal (nonacetylated salicylate; neuropathic pain) and licensing/R&D agreements involving the treatment of peripheral neuropathies with aminopyridines. Neurorecovery, which was founded in 1998, has used the latter to develop Ampydin, an immediate-release form of 4-aminopyridine in Phase II for chronic functional motor and sensory problems related to Guillain-Barre syndrome (the candidate is also being evaluated for Charcot-Marie-Tooth disease and diabetic peripheral neuropathy). Acorda also gets preclinical and clinical data, regulatory filings, orphan drug designations, copyrights, trademarks, and domain names. It may use the IP to investigate additional indications for its sustained-release version of 4-aminopyridine (fampridine SR), a potassium channel blocker originally developed by and licensed from Elan. Acorda recently raised $78mm in a follow-on public offering to support a second Phase III study of this compound in MS patients with walking impairments.
Allergan Inc.
Graceway Pharmaceuticals Inc.
Novavax Inc.
Graceway Pharmaceuticals (mostly in-licenses therapeutics) has acquired all of Novavax's (vaccines) North American assets that pertain to Estrasorb (estradiol topical emulsion), which is prescribed for moderate-to-severe vasomotor symptoms that can accompany menopause. (Feb.)
Graceway gets the patent, IP (including trademarks and copyrights), assets, and all equipment necessary to produce the drug. Novavax keeps rights to the product in other parts of the world and has been granted back a royalty-free license from Graceway to use its micellar nanoparticule technology in some drug candidates that do not include Estrasorb. Novavax has agreed to manufacture Estrasorb until the new inventory is delivered in mid-2008; Graceway will pay a pre-set transfer price for the supply. Graceway has also bought Allergan's assets (including the NDA, raw material, and finished goods) that relate to Estrasorb; last year Allergan, which gained North American rights to the drug through its acquisition of Esprit Pharma, terminated the $12.5mm deal Esprit penned in 2005 with Novavax. At the time it planned to sell the drug until the supply ran out.
Altor BioScience Corp.
Genentech Inc.
Altor BioScience (developing immunotherapeutics for cancer, viral infections, and inflammatory diseases) has licensed exclusive worldwide development and marketing rights to a class of Genentech's antibody-based tissue factor (TF) antagonists. (Feb.)
Altor will begin Phase II studies later this year (with funding from the National Institutes of Health) for the lead antibody ALT836 to treat acute respiratory distress syndrome (ARDS) and acute lung injury (ALI). Altor's CEO, Hing Wong, developed ALT836 at Baxter International during the 1990s; Baxter spun the drug out to Sunol Molecular, which Wong joined (he then moved to Sunol's spin-off, Altor, in 2002). Sunol got the candidate into Phase I/II before licensing it in 2005 to Tanox, which was acquired by Genentech in 2006. TFs have been targeted as a way to treat cancer, myocardial infarction, unstable angina, and systemic inflammation caused by ALI, ARDS, colitis, and the avian flu. ALI and ARDS often occur in patients with lung trauma, pulmonary infection, and sepsis. Over 150,000 Americans suffer from the conditions each year, with the mortality rate between 30-50%.
Amira Pharmaceuticals Inc.
GlaxoSmithKline PLC
Amira Pharmaceuticals (start-up focusing on eicosanoid pathway-related inflammation) has licensed GlaxoSmithKline exclusive global rights to develop, manufacture, and sell its FLAP (5-lipoxygenase-activating protein) inhibitors for respiratory and cardiovascular diseases. (Feb.)
GSK will pay up to $425mm, which includes an up-front fee and development and regulatory milestone payments. It is also responsible for tiered royalties on worldwide sales plus commercialization milestones. The agreement includes Amira's lead FLAP inhibitor AM103, a once-daily oral candidate that completed a Phase I trial three months ago for asthma. FLAP inhibitors have the potential to block all leukotrienes, which are produced in lung tissue by lipoxygenase-catalyzed oxygenation and can lead to various types of inflammation. Amira believes this class of therapeutics will secure a significant share in the $4bn nonsteroidal asthma/rhinitis drug category. The deal with Amira is further evidence that GSK is continuing to invest in primary care areas such as asthma. Late last year the Big Pharma paid $1.6bn to acquire Reliant Pharmaceuticals, which sells cholesterol-reducing drugs, and got rights to Santarus's anti-ulcerant omeprazole; both of these transactions involved primary care markets with limited unmet need and a flood of generic competition.
Antisense Therapeutics Ltd.
Teva Pharmaceutical Industries Ltd.
Australian pharmaceuticals company Antisense Therapeutics has granted Teva Pharmaceutical Industries (generic and branded drugs for cancer, neurological conditions, and immune disorders) exclusive worldwide development and commercialization rights to its ATL1102 candidate for multiple sclerosis. (Feb.)
Antisense gets $2mm up front and up to $100mm in development and sales milestones plus low double-digit tiered royalties. ATL1102 is an antisense inhibitor of CD49d that is being developed in Phase IIa trials under a deal between Antisense and Isis Pharmaceuticals. (In accordance with that deal, the signing of the Teva collaboration qualifies Isis to receive a third of all sublicense and milestone fees, in addition to an undisclosed percentage of any royalties received by Teva.) The candidate prevents white blood cells from entering inflammation sites, thereby stopping progression of diseases such as MS. Antisense will continue funding and managing the current Phase IIa trial, after which point Teva will be responsible for all funding and development activities. Teva also gets an option to develop ATL1102 as an aerosol drug for asthma. The company has its own Copaxone (glatiramer) on the market for relapsing-remitting MS, and also has laquinimod (in-licensed from Active Biotech) in Phase III preparation for autoimmune disease including MS and rheumatoid arthritis.
AstraZeneca PLC
Meditrina Pharmaceuticals Inc.
Meditrina Pharmaceuticals (therapeutics for disorders of the female reproductive system) has licensed exclusive US rights to intellectual property from AstraZeneca PLC for the development of endometriosis treatments. (Feb.)
Meditrina will develop and sell therapeutics based on the use of aromatase inhibitors (AIs) in combination with estrogen and progestin for endometrial lesions. Aromatase promotes the conversion of androgens to estrogen in the body; inhibiting this enzyme regulates the amount of estrogen produced to alleviate the symptoms of endometriosis. Meditrina is already working on Femathina (MPI674), a Phase II AI that it is re-purposing as a treatment for endometrial thinning prior to ablation procedures in premenopausal women.
Azur Pharma Ltd.
IntelGenx Corp.
Azur Pharma (women's health) will work with IntelGenx (oral controlled-release drugs) to develop and market prenatal vitamins using IntelGenx's oral delivery technology. (Jan.)
The companies are hoping to launch two products in the first part of 2008. IntelGenx, which will handle development activities, gets royalties on US sales; Azur is charged with marketing the resulting vitamins in the US. The US market for prenatal vitamins is estimated at $250mm each year. Azur already sells several women's health products including NovaNatal prenatal tablets, NovaStart vitamins and supplements for women trying to conceive, RectaGel for pregnant women with hemorrhoids, AVC vaginal cream for Candida albicans infections, Urelle for lower urinary tract infections, and Pyrelle for inflammation of the lower urinary tract.
Bausch & Lomb Inc.
CrystalGenomics Inc.
Korean drug discovery firm CrystalGenomics has licensed Bausch & Lomb rights to its peroxisome proliferator-activated receptor (PPAR)-alpha antagonists for ophthalmic inflammation. (Jan.)
CrystalGenomics will identify lead candidates using its platform, which obtains 3D structures of target proteins, while B&L is responsible for formulation development, completing preclinical and clinical studies, and marketing resulting products. In return B&L pays $20mm in milestones plus sales royalties. CrystalGenomics was founded in 2000 and has been working on a preclinical PPAR-alpha antagonist for obesity in collaboration with the Korea Research Institute of Chemical Technology; the company retains rights to that indication when it transfers IP related to the ophthalmic uses to B&L. B&L already has a strong portfolio in eye inflammation, including the Lotemax and Zylet brands.
Bayer AG
Bayer Schering Pharma AG
FutureChem Co. Ltd.
FutureChem (molecular imaging reagents) has licensed Bayer Schering Pharma exclusive worldwide rights to its fluorine-18 (F18) radioisotope for labeling of target-specific positron emission tomography (PET) tracers. (Feb.)
Developed in collaboration with the Korean hospital Asan Medical Center, FutureChem's technology uses a nucleophilic substitution reaction in protic solvent to produce longer-lived tracers and in larger amounts--about 5-50 times that of standard radiolabels. In October 2007, FutureChem and Asan completed a Phase III trial testing F18 in the diagnosis of Parkinson's disease. Bayer says the technology may be applied to several PET tracers in its diagnostic imaging pipeline, which already includes a PET fluorine contrast agent licensed from Avid last June for viewing of brain amyloid plaques connected to Alzheimer's disease.
Biocon Ltd.
Iatrica Inc.
Indian pharma company Biocon is teaming up with Iatrica (drug development IP) to co-develop immunoconjugates that will be used in targeted immunotherapy for cancer and infectious diseases. (Jan.)
Biocon has made an equity investment in Iatrica. The companies will combine Iatrica's platform with Biocon's knowledge of drug development, biologics manufacturing, and clinical research to create immunoconjugates that produce responses against tumors or pathogens. Iatrica was established last year with licenses to technology developed by researchers at Johns Hopkins University and company founders Atul Sedi and Rajani Ravi.
Bridge Pharma Inc.
Sirion Therapeutics Inc.
Bridge Pharma (ion channel targets) has licensed ophthalmic start-up Sirion Therapeutics exclusive global rights to develop, manufacture, and sell topical versions of its anti-inflammatory compound norketotifen for eye diseases. (Feb.)
Sirion may develop norketotifen either alone or in combination with other drugs, and expects to put the medicine in the clinic early next year. Bridge Pharma is the assignee of US patent 6,207,684, which covers its discovery that norketotifen, an optically active isomer of ketotifen, has potential in ocular disorders--including allergic conjunctivitis, other forms of conjunctivitis, keratitis, and hyperemia--and does not cause side effects, such as local irritation and sedation, due to its combined antihistaminic and mast cell-stabilizing properties. Sirion was founded in 2005 and over the past couple years has raised $70mm--through a Series B financing and its merger with public shell Tenby--to support its in-licensed pipeline. Norketotifen joins Sirion's other topical drug candidates difluprednate, in Phase III for postoperative inflammation and uveitis (acquired from Senju); NDA-ready ganciclovir (ophthalmic infections; from Laboratoires Thea); and Phase III dry eye compound cyclosporine (from Laboratorios Sophia).
Cytokine PharmaSciences Inc.
Marillion Pharmaceuticals Inc.
Marillion Pharmaceuticals (oncology) has licensed exclusive worldwide rights to develop and commercialize Cytokine PharmSciences' (polymer-based drug delivery) Pilobuc xerostomia treatment. (Feb.)
Xerostomia (dry mouth) results from the loss of salivary gland function due to autoimmune diseases, medications, and chemotherapy/radiation therapy for head and neck cancer. Currently available pilocarpine tablets have a short half-life and cause numerous undesirable side effects (sweating, nausea, urinary frequency) because the drug is absorbed primarily in the gut. Pilobuc is a hydrogel polymer buccal insert that releases pilocarpine directly into the oral membranes to stimulate saliva production and makes speaking and swallowing more comfortable. Marillion plans to have Pilobuc in Phase II clinical trials later this year. The company's cancer pipeline already includes MN201, a preclinical synthetic vitamin D5 receptor ligand for breast, prostate, and colon cancers.
Debiopharm Group
Medical Futures Inc.
Debiopharm Group licensed Medical Futures (gastrointestinal therapeutics) exclusive rights to distribute in Canada its immediate-release Sanvar (vapreotide acetate) to treat acute esophageal variceal bleeding. (Feb.)
Debiopharm receives an up-front fee and milestones. Sanvar is the only somatostatin analogue that shows promise in treating EVB at an early stage. It is currently awaiting approval in Canada and has orphan drug designation in the US. Medical Futures' gastroenterology sales team will handle distribution. Debiopharma has signed marketing agreements for Sanvar with Ranbaxy Laboratories, EMS Sigma Farma, Tzamal Bio-Pharma, LG Life Sciences, and Salix Pharmaceuticals.
Dyax Corp.
Sanofi-Aventis
Dyax (large-molecule therapeutics for oncology and inflammation) has granted Sanofi exclusive worldwide development and commercialization rights to its fully human monoclonal cancer antibody DX2240. (Feb.)
Sanofi also gets nonexclusive rights to Dyax's phage display technology for use in identifying new antibody compounds. Including an unspecified payment of $25mm during 2008 as part of the deal, Dyax could get up to $500mm in fees and milestones if at least five candidates make it to market (including DX2240), plus royalties. While Sanofi is responsible for all activities and sales surrounding DX2240, the companies will collaborate on development of other projects Sanofi designs using the in-licensed technology, and will share profits. DX2240 targets the Tie-1 receptor on the blood vessels of tumors and has shown positive preclinical results in increasing hypoxia and tumor necrosis in various cancer types. Dyax's phage display technology allows researchers to generate phage libraries, select potential compounds that exhibit high affinity and specificity to targets, and further produce potential drug candidates.
EKR Therapeutics Inc.
PDL BioPharma Inc.
EKR Therapeutics (specialty pharma; focused on pain management and cancer) has licensed exclusive worldwide rights to PDL BioPharma's (severe or life-threatening diseases) cardiovascular therapeutics Cardene (nicardipine) IV and SR formulations, Retavase (reteplase), and ularitide. (Feb.)
EKR gets all rights to related trademarks, patents, IP, and product inventory and has agreed to pay $85mm up front, $85mm in milestones, and royalties of 5% and 10% on new versions of ularitide and Cardene, respectively. PDL receives $25mm for approval of another formulation of Cardene--expected before the late 2009 patent expiration of the IV form--and two $30mm milestones for twelve-month sales of $80mm and $150mm for the new version. Cardene IV is a calcium channel blocker that received US approval in 1992 for short-term treatment of hypertension. PDL gained rights to the drug through its $514mm acquisition of ESP Pharma in 2005. Combined sales of Cardene IV and SR formulations were $143.9mm for the twelve months ending September 2007. Retavase sales for the same time period were $21.6mm. This compound is a fibrinolytic that gained FDA approval in 1996; it improves ventricular function in adults after acute myocardial infarction and lowers the risk of congestive heart failure and death. Ularitide, a synthetic form of urodilatin, is involved in regulating blood pressure and excreting water and sodium from the kidneys. The injectable the compound (Phase II for acute decompensated heart failure) promotes diuresis, natriuresis, and vasodilation. PDL began to divest parts of the company following an internal investigation of its former CEO and discontinuation of its Phase III Nuvion monoclonal antibody for inflammatory bowel disease. Several companies have benefited from PDL's misfortune: Ophthotech got rights to volociximab for age-related macular degeneration and Otsuka purchased the cancer drug Busulfex in the last few months. Investment Banks/Advisors: Cowen & Co. LLC (EKR Therapeutics Inc.); Merrill Lynch & Co. Inc. (PDL BioPharma Inc.)
EUSA Pharma Inc.
GlaxoSmithKline PLC
Start-up EUSA Pharma has licensed GlaxoSmithKline exclusive global rights to its preclinical fully human antibody OPR003, which targets the pro-inflammatory cytokine/B-cell growth factor interleukin-6. (Feb.)
GSK pays up to $44mm in up-front and development milestone fees, plus sales royalties. The Big Pharma will be responsible for conducting and funding preclinical studies and clinical trials, production, and marketing. OPR003, as well as the majority of EUSA's pipeline and portfolio, came from EUSA's 2007 acquisition of French biotech OPi, which had been collaborating with Vaccinex since 2004 on antibody development. OPR003 was originally developed by Vaccinex, which licensed the therapeutic to OPi in 2006. As a result of the present alliance, Vaccinex will get half of the money paid by GSK to EUSA. Discovered using Vaccinex's ActivMab antibody selection technology, OPR003 is an elsilimomab derivative that has potential in oncology and inflammation (EUSA has been investigating it for lymphoid malignancies and rheumatoid arthritis). The deal with GSK allows EUSA to continue its spec pharma business strategy and focus on its core markets of pain, cancer, and critical care. Last year the company in-licensed rights to Zars's anesthetic patch Rapydan and Innocoll's anti-infective implant Collatamp G.
Faust Pharmaceuticals SA
Takeda Pharmaceutical Co. Ltd.
Domain Therapeutics SA (CNS drugs) will use its Neuroclid drug discovery platform to identify compounds aimed at G protein-coupled receptors (GPCRs) provided by Takeda. (Jan.)
GPCRs represent a target class on which most marketed therapeutics (including blockbusters such as Prozac and sumatriptan) are based. GPCR drugs have potential in CNS, cardiovascular, metabolic, immune, and inflammatory diseases, and cancer. Neuroclid uses fluorescence resonance energy transfer (FRET) binding and cell-based assays to identify the specific interaction that the ligand has with the targeted GPCR. The platform has advantages over traditional assays, which assess ligand binding indirectly by measuring how downstream intracellular pathways are stimulated, often giving false positive results. Another benefit of the Neuroclid technology is its ability to detect silent binders to GPCRs, thus enabling the potential for identifying more drug candidates.
Genstruct Inc.
Pfizer Inc.
Systems biology company Genstruct will help Pfizer understand the causes of drug-induced liver injury. (Feb.)
To date, the companies have collaborated in over 20 projects in areas such as cancer, cardiovascular diseases, and metabolic disorders. Under the new agreement, Genstruct will apply its systems biology technology to Pfizer's preclinical programs to assess the toxicity of drugs and identify potential biomarkers. Genstruct keeps rights to any resulting biomarkers. The company's platform can uncover the molecular mechanisms responsible for drug toxicity, analyze how a compound works, and determine which drugs will cause unwanted side effects. Such information can then be used to create safer therapies.
Helsinn Healthcare SA
Riemser Arzneimittel AG
Helsinn Group (in-licenses, develops, and sells cancer, pain, inflammation, and GI therapeutics) has granted German drug company Riemser Arzneimittel rights to market cancer supportive care products Aloxi (palonosetron) and Gelclair in Germany. (Feb.)
The deal helps Helsinn to achieve global partnering for both products. (Most recent out-licensings were in 2006 when the company gave EKR North American rights to Gelclair and Biovitrum Nordic rights to Aloxi.) Aloxi is a second-generation 5-HT3 antagonist marketed for the prevention of nausea and vomiting associated with emetogenic chemotherapies. Gelclair is a bioadherent oral gel to treat pain associated with oral lesions from radiotherapy, chemotherapy, and other treatment regimens as well as oral irritation and trauma due to dentures or braces. Riemser develops and sells treatments for dermatology, infectious diseases, oncology, dental, ophthalmology, and veterinary indications.
Human Genome Sciences Inc.
Xencor Inc.
Xencor (antibody technologies) has agreed to use its XmAb humanization and optimization technologies to improve some of Human Genome Sciences' monoclonal antibodies. (Feb.)
Xencor gets money up front, development and commercialization milestones, and royalties. HGS will be in charge of preclinical and clinical development, manufacturing, and marketing. Xencor says XmAb optimizes antibody structure, including the Fc area, to increase potency, half-life, and affinity. The company has already used the technology to improve tumor cell killing and selectively regulate immune cells. Xencor has signed similar XmAb antibody agreements with Genentech for cancer and autoimmune diseases, Roche and Chugai for cancer, Centocor for cancer, and Boehringer Ingelheim for undisclosed targets.
ImaRx Therapeutics Inc.
Microbix Biosystems Inc.
Microbix Biosystems (biotherapeutics) and ImaRx Therapeutics (vascular disorders) have signed a letter of intent to manufacture urokinase and develop the thrombosis drug for additional indications. (Jan.)
Both companies have forms of urokinase that they market. In mid-2006, ImaRx in-licensed rights to Abbott Laboratories's Abbokinase, a product that received FDA approval in 1978 for thrombosis; ImaRx developed the drug for acute massive pulmonary embolism. Microbix began developing ThromboClear --a generic version of Abbokinase--in 1994 and two years later granted Gensia Laboratories US marketing rights. That deal was terminated in 1998. Under terms of the new agreement, ImaRx will transfer its manufacturing process and NDA to Microbix, which will enable ImaRx to continue to sell the drug for the current indications as well as develop it for stroke, peripheral arterial occlusion, deep vein thrombosis, and myocardial infarction. Microbix can develop urokinase to clear catheters and prophylaxis of catheter-related complications--including blood stream infections and venous thrombi--and potentially in the cancer and ophthalmology markets. Microbix will pay royalties on sales of urokinase for the new indications.
iNova Pharmaceuticals Pty. Ltd.
Labopharm Inc.
Drug delivery company Labopharm has licensed iNova Pharmaceuticals (prescription and OTC medicines) exclusive Australian rights to its once-a-day tramadol, as Labopharm continues to partner and launch the pain drug internationally. (Jan.)
Labopharm is responsible for product supply and will receive revenues and milestone payments. Tramadol, which incorporates Labopharm's cross-linked, high-amylose starch technology Contramid, is awaiting approval in Australia and should be launched there early this year (the drug is already available in multiple countries). Labopharm has licensed tramadol to several companies within the last few years, most recently to WhanIn in South Korea and Paladin in Canada. INova was formerly the Asia-Pacific division of 3M Pharmaceuticals; in November 2006, 3M divested its pharma unit, splitting it up geographically and selling portions to Meda (Europe), Graceway (North and Latin America), and private equity groups Ironbridge Capital and Archer Capital (Asia-Pacific).
Karo Bio AB
Zydus Cadila
Karo Bio (metabolic and cardiovascular therapeutics) and Indian pharma company Zydus Cadila have signed a three-year agreement under which they will discover and develop selective glucocorticoid receptor modulators for inflammatory diseases. (Feb.)
Karo will lend to the alliance its knowledge of structural biology, drug design, and characterization. Zydus will be in charge of drug discovery and development (including preclinical studies, IND filing, and human trials). The companies will split expenses and revenues equally. It is reported that Karo will have rights to resulting IP in the Nordic and Baltic countries and Zydus keeps Indian rights. Glucocorticoids are prescribed for rheumatoid arthritis, inflammatory bowel disease, psoriasis, and asthma, which combined have a market of over $10bn. Long-term use of existing therapeutics can lead to obesity, diabetes, and osteoporosis; Karo and Zydus see this as an opportunity to create new drugs that will ultimately replace those that cause harmful side effects.
Kissei Pharmaceutical Co. Ltd.
Pneuma Partners LLC
Start-up Pneuma Partners has licensed Kissei Pharmaceutical (urogenital, endocrine, and immune diseases) Japanese rights to its Phase III lung surfactant mimic, calfactant. (Jan.)
Kissei hopes to get the medicine approved in Japan for acute lung injury and acute respiratory distress syndrome, both of which affect a small population--about 40,000 people--annually in Japan. Calfactant, a lipoprotein mixture containing apoprotein B, coats the alveoli (air-containing units of the lung) and reduces surface tension of pulmonary fluids to prevent the lungs from collapsing. Ony originally developed calfactant and licensed it to Forest in 1991. Seven years later the orphan drug was approved in the US as Infasurf for respiratory distress syndrome in infants. Forest now co-promotes it in the US with Ikaria (formerly INO Therapeutics). Since its 2004 founding, Pneuma Partners, which was established by the University of Buffalo, has been investigating the liquid suspension of Infasurf, plus an inhalable form for asthma and COPD. (Ony developed the inhaled powder in collaboration with Nektar initially for the neonate RDS indication, but abandoned work after determining that the small market size would not provide enough ROI.)
KV Pharmaceutical Co.
Paladin Labs Inc.
Paladin Labs has licensed fellow spec pharma company KV Pharmaceutical exclusive rights to distribute its Micro-K Extencaps in Canada. (Feb.)
Micro-K Extencaps are a controlled-release formulation of microencapsulated potassium chloride designed to prevent potassium depletion in patients with hypokalemia and metabolic alkalosis, and for treating chronic digitalis intoxication. IMS Health reports that 2007 sales of Micro-K in Canada were about $2.2mm. Just last month, KV got exclusive worldwide rights to Hologic's Gestiva to prevent preterm birth.
Merck & Co. Inc.
MicroDose Technologies Inc.
MicroDose Technologies (inhaled drug delivery) has granted Merck worldwide rights to use its dry powder inhaler (DPI) technology in developing certain Merck respiratory compounds. The licensing follows the completion of initial exploratory studies between the partners. (March)
MicroDose gets an undisclosed up-front fee and an additional $32mm in development milestones for the first product, plus sales royalties. (Additional milestones are possible if more than one product results.) Merck will fund development and commercialization. MicroDose's DPI is a handheld breath-activated device that uses microelectronics (piezo electronics) for flow rate independence and effective high-lung dose delivery. MicroDose has licensed the technology to a number of partners including Novartis and 3M.
Numerate Inc.
Presidio Pharmaceuticals Inc.
Presidio Pharmaceuticals (developing therapeutics for viral infections) and Numerate seek to discover and develop new small-molecule hepatitis C virus inhibitors. (Feb.)
Numerate will use its drug engineering capabilities to quickly and cost-effectively generate and optimize leads and back-up molecules for Presidio, which will develop the compounds and own any resulting therapeutics. Presidio currently has non-structural protein 5A inhibitors in preclinical studies for HCV. Founded in March 2007, Numerate recently acquired the assets of Pharmix, which specialized in computerized design of small molecules.
Prolong Pharmaceuticals Inc.
Zydus Cadila
Indian pharmaco Zydus Cadila and Prolong Pharmaceuticals (pegylation technology) will ally in developing a third-generation pegylated erythropoietin (PEG-EPO) for severe anemia. (Jan.)
The collaboration will take advantage of Prolong's differentiated pegylation technology for optimizing the drug. The companies will share costs and profits. Zydus will be responsible for choosing a candidate for preclinical development, filing the IND, and performing clinical trials. It gets rights to market the resulting drug worldwide. Pegylation creates therapeutics that are more potent, have fewer side effects, and offer a reduced dosing regimen. The companies believe the next-generation PEG-EPO would not only be better at treating anemia than EPO but would also be more cost-effective and offer greater convenience to patients. Investment Banks/Advisors: YES Bank (Prolong Pharmaceuticals Inc.)
Financings
Accentia Biopharmaceuticals
Accentia Biopharmaceuticals Inc. (develops already-approved drugs for additional conditions) has raised $8.7mm by selling new and existing institutional investors preferred stock that converts into common shares at $2.67 apiece. The buyers also received short-term warrants (exercisable either 30 days after the company unveils the results of a Phase III rhinosinusitis study of SinuNase or during the 30 days after December 2, 2008) and six-year warrants to buy shares at $2.67 each. Rodman & Renshaw was the exclusive placement agent. (Jan.)
Investment Banks/Advisors: Rodman & Renshaw Capital Group Inc.
Acorda Therapeutics Inc.
Acorda Therapeutics (treatments for spinal cord injury and CNS disorders) netted $75mm through the follow-on public offering of 3.8mm common shares (including the overallotment) at $21.50 apiece. A selling stockholder also sold 83k shares. Acorda will use the proceeds to complete Phase III trials of its MS candidate fampridine-SR. (Feb.)
Investment Banks/Advisors: Lazard LLC; Deutsche Bank AG; Piper Jaffray & Co.; Friedman, Billings, Ramsey Group Inc.; JP Morgan Chase & Co.; Cowen & Co. LLC
Akela Pharma Inc.
Akela Pharma (developing inhaled fentanyl and candidates for allergic asthma and chronic renal failure) is hoping to net about $Cdn8.4mm ($8.3mm) in its follow-on public offering of up to 7.5mm shares. Half of the shares are being underwritten, the rest offered on a "best efforts" basis--at $Cdn1.20 apiece. Investors also get three-year warrants to buy an additional 3.75mm shares for $Cdn1.50 each. (Feb.)
Investment Banks/Advisors: Desjardins Securities Inc.
Bioheart Inc.
After filing for its initial public offering a year ago, Bioheart (cardiovascular therapeutics) has finally sold 1.1mm common shares at $5.25 apiece netting $4.3mm. (Feb.)
The company will use the proceeds for trials of its Phase II MyoCell autologous cell therapy for improving cardiac function following a heart attack or congestive heart failure. Myoblasts are taken from a patient's own thigh muscle and are cultured and injected into scar tissue in the heart wall via Bioheart's MyoCath catheter. The company signed two agreements in the last two years--one with the Cleveland Clinic for stem cell technology to repair tissues after a heart attack and the other with Tissue Genesis for adipose-derived cell technologies--and completed its mezzanine financing of $8mm four months ago. Investment Banks/Advisors: Dawson James Securities Inc.
Cadence Pharmaceuticals Inc.
Cadence Pharmaceuticals (drugs for the hospital market) netted $49mm through the sale of 9.24mm common shares priced at $5.34 each (a 6% discount) to selected investors. The company will use some of the funds for ongoing Phase III trials of Acetavance (acetaminophen) for acute pain. (Feb.)
Genta Inc.
Genta (cancer therapeutics) netted $2.9mm through the private placement of 6.12mm shares at $0.50 each (a 7% discount) to investors including BAM Opportunity Fund (lead), Cranshire Capital, and Enable Capital LLC (through its Enable Growth Partners, Enable Opportunity, and Pierce Diversified Strategy Master Fund affiliates). Rodman & Renshaw was the placement agent. (Feb.)
Investment Banks/Advisors: Rodman & Renshaw Capital Group Inc.
GTC Biotherapeutics Inc.
GTC Biotherapeutics (transgenic technology for therapeutic protein development) netted $5.6mm through the private placement of 6.9mm common shares at $0.87 each (a 16% discount) to undisclosed institutional investors. Buyers also received seven-year warrants to buy an additional 6.9mm shares at the same price. Rodman & Renshaw and Dawson James were the placement agents. (Feb.)
Investment Banks/Advisors: Dawson James Securities Inc.; Rodman & Renshaw Capital Group Inc.
MolMed SPA
MolMed SPA (primarily oncology pharmaceuticals) grossed €56.2mm ($82.3mm) in its initial public offering on Borsa Italiana, the Italian stock exchange. It sold 26.1mm shares at €2.15 each, the bottom of its €2.15-2.75 range announced earlier this month. (Feb.)
MolMed started out in 1996 as a cell services company; it was created by a JV between the tech transfer entity San Raffaele Foundation and Boehringer Mannheim. (BM was later acquired by Roche, which sold off its inherited ownership in MolMed to an investment bank.). In 2000 MolMed transitioned to full-time drug development, and two years later merged with fellow San Raffaele spin-off GenEra, which specialized in ex vivo cell handling, gene therapeutics, and cancer vaccines. Since then, MolMed has further expanded its ex vivo gene technologies through a 2004 license to Oxford BioMedica's platform, and has developed a pipeline focused on cancer. Lead TK, which has orphan drug status in the US and Europe, is in Phase III for hematological malignancies such as leukemia. The engineered donor T-lymphocyte therapeutic is administered during haploidentical hematopoietic stem cell transplantation to prevent graft vs. host disease. For solid tumors, the company has developed the Phase I/II vaccine M3TK, which modifies the patient's own T-cells to express MAGE-3, a tumor antigen that prompts an immune response. Under a 2003 deal, Takara Bio holds Asian rights to both TK and M3TK. Other MolMed projects include arenegyr, a Phase II vascular-targeting, recombinant fusion protein that acts selectively on tumor blood vessels for colorectal, small-cell lung, and liver cancers, and mesothelioma; second-generation vascular-targeting agents for solid tumors; and a gene therapeutic that interrupts HIV replication (Takara Bio holds rights to this candidate). To date, MolMed has raised €76mm through private financings. Investment Banks/Advisors: Banca IMI; Societe Generale Corporate & Investment Banking
Pharmexa AS
Pharmexa AS raised DKK80.2mm ($18mm) through a rights offering of 18.2mm shares at DKK5 each. The company is developing immunotherapies for cancer, Alzheimer's, osteoporosis, and infectious diseases. (Feb.)
RegeneRx Biopharmaceuticals Inc.
RegeneRx Biopharmaceuticals (developing therapies for tissue and organ repair) raised $5mm through the private placement of 5mm common shares at $1 each (a 9% premium) to two undisclosed accredited investors that are affiliates of Sigma-Tau, RegeneRx's largest shareholder. Buyers also received warrants to purchase an additional 1mm common shares at $1.60 apiece. (Feb.)
Theratechnologies Inc.
Theratechnologies (lead compound tesamorelin is in Phase III for HIV-associated lipodystrophy) raised $Cdn29.75mm ($29.86mm) through the follow-on public offering of 3.5mm common shares priced at $Cdn8.50 each, a 12% discount. (Jan.)
Investment Banks/Advisors: BMO Financial Group; Jennings Capital; Desjardins Securities Inc.; Canaccord Capital Corp.; National Bank Financial Corp.
Vertex Pharmaceuticals Inc.
Vertex Pharmaceuticals (infectious and immune diseases and cancer) has netted $112.1mm through the follow-on public offering of 6.9mm common shares (including the overallotment) at $17.14. The company also concurrently netted $278.5mm by selling 4.75% five-year convertible senior subordinated notes which convert into 43.22 common shares per $1k in notes (about $23.14 per share). (Feb.)
Investment Banks/Advisors: Morgan Stanley & Co.; Goldman Sachs & Co.; Merrill Lynch Pierce Fenner & Smith Inc.
Research/Analytical
Acquisitions
Bruker BioSciences Corp.
Bruker BioSpin Group
The diversified research equipment maker Bruker BioSciences has acquired Bruker BioSpin, a group of companies owned privately by members of the Laukien family. Bruker BioSciences, itself 52% owned by the family, trades on Nasdaq. The combined entity will change its name to Bruker Corp. (Feb.)
The acquirer is paying a total of about $976mm: $388mm cash, plus 57.5mm shares of its common stock worth $588.3mm. For the nine months ended September 2007, the BioSpin group had revenues of $352mm and net income of $43.5mm. BioSpin's core technologies are based on magnetic resonance: NMR, MRI, and electron paramagnetic resonance. They have broad applications in drug discovery, basic chemistry and biology research, NMR metabolic profiling, MRI imaging for noninvasive animal research, and food and environmental safety analysis. The combined Bruker Corp. also includes its founding units Bruker Daltonics (mass-spec instruments) and Bruker AXS (analytical x-ray systems)--which merged in 2003 to form Bruker BioSciences--and Bruker Optics (spectroscopy instruments), acquired in 2006. The various Bruker divisions are complementary but operate individually. Apart from life sciences, Bruker technologies have applications in superconducting, robotics, instruments for industrial materials research, and detection products for the defense industry.
Medical Devices
Acquisitions
Alynx Co.
MiMedx Inc.
Alynx has reversed merged with private biomaterials firm MiMedx. (Feb.)
Alynx has issued MiMedx 52.9mm common shares and 3.7mm preferred shares that convert into 56.9mm common shares. Following the transaction MiMedx will have a 97.25% stake in the company and its current executive officers and directors will keep their positions at the merged entity, which will retain the MiMedx name. Since its inception in 1985, Alynx has had several name changes as the result of acquiring various businesses, all of which are no longer operating. For the past ten years the company has been an inactive shell corporation with the intention of eventually buying a business with a potential for long-term growth, hence its deal with MiMedx. Just six months ago, MiMedx completed its acquisition of fellow orthopedic device maker SpineMedica and has been developing surgical and non-surgical devices for musculoskeletal applications. The company is using nordihydroguaiaretic acid (NDGA) polymerized collagen technology to develop products to treat tendon and ligament injuries, decrease healing time, and minimize scar tissue. In addition, its orthopedic implants have applications in spinal motion preservation, soft tissue repair, and small bone and joint injuries. MiMedx has no marketed products but hopes to launch one of SpineMedica's implants later this year. Since its founding in late 2006, MiMedx has raised $17.75mm in private funding.
Bayer AG
Medrad Inc.
Possis Medical Inc.
Medrad (vascular injection systems for delivery of contrast agents) has agreed to acquire publicly traded Possis Medical (blood clot removal devices) for $331mm, or $19.50 cash per share, a 39% premium. (Feb.)
Founded in 1956, Possis operated in several different industries until 1990, when it decided to become a medical products company. It sold off its pacemaker leads business to Innovex in 1994 and since then has been focusing solely on mechanical thrombectomy devices, generating 97% of its $66.6mm in revenues this year from leading product AngioJet Rheolytic. On the market for over ten years, AngioJet Rheolytic removes large and small thrombus from coronary arteries and bypass grafts, dialysis access grafts, peripheral arteries, and peripheral veins. Eventually Possis may move the brand into deep vein thrombosis, pulmonary embolism, and ischemic stroke markets. Besides AngioJet, the company's portfolio includes the SafeSeal hemostasis assist patch for puncture site closure, plus several thrombi-removal catheters under the Fetch, Spiroflex, and Xpeedior names. Possis recorded $55.8k in net income and on October 31, 2007, had $5.6mm cash on hand. Post acquisition, Medrad--a Schering (now Bayer) division since 1995--will be able to offer interventional cardiologists a complete line of contrast injection systems for diagnosing CV diseases and thrombectomy devices to treat the diseases. In addition, Medrad also now has a foothold in the inferior vena cava filter market through Possis' 15% stake in SafeFlo maker Rafael Medical Technologies (through the 2006 deal, Possis also has an option to buy Rafael within three years).
Covidien Ltd.
Lille Healthcare
In an effort to refocus on core health care businesses, Covidien has sold its European incontinence business to a private company in France that renamed the unit Lille Healthcare. (Feb.)
The acquired business was part of Covidien's medical supplies segment and reported 2007 sales of $109mm. Since Covidien was spun off from Tyco, it has been reviewing its assets to see which ones should be divested. In addition to the incontinence unit, Covidien also sold off its retail products unit for $335mm in December 2007 and it plans to divest its NJ specialty chemicals business.
General Electric Co.
GE Healthcare
Whatman PLC
GE Healthcare has acquired UK's Whatman PLC for £357mm in cash ($702mm; based on 132mm ordinary shares outstanding), paying almost three times the public separations technology firm's 2006 revenues. (Feb.)
For each share, Whatman stockholders will get 270p in cash, a 12% premium. Last month the company confirmed that it was exploring an acquisition and had received several takeover offers. Whatman operates in three divisions, led by the LabSciences unit, which made up more than half of the company's sales in 2006 and offers chromatography materials, membrane filters, and syringe and syringeless filters to prepare noncellular samples. BioScience, the second division, specializes in cellular sample preparation and markets a portfolio of nucleic acid/protein collection and storage products including FTA cards, which handle and process DNA at room temperature. The company recently used the FTA technology in a partnership to develop g-Nostics's smoking cessation test. And lastly under the MedTech unit, Whatman sells filtration components for medical devices and clinical diagnostics. For a short time, Whatman was in the blood processing business, but sold its HemaSure subsidiary to Pall in 2002 to focus on laboratory filtration products. Whatman recorded net income of £27.8mm in 2006 and had £15.2mm cash on hand at the end of that year. GE says it will use the Whatman deal to grow its life sciences offerings. GE entered the life sciences industry only a few years ago when it bought Amersham, and since then has made one major acquisition in this area--Biacore, for $436mm.
Heraeus Holdings GMBH
Heraeus Vadnais Inc.
Synovis Life Technologies Inc.
Synovis Interventional Solutions Inc.
Heraeus Vadnais, the US-based medical components subsidiary of metals/materials giant Heraeus Holdings GMBH, has acquired Synovis Life Technologies' Synovis Interventional Solutions business and related assets for $29.5mm in cash and the assumption of certain liabilities. (Jan.)
SLT acquired Synovis Interventional Solutions in 1998. The unit, which recorded revenues of $30.2mm for 2007, develops and manufactures polymer and metal components such as coils, helices, stylets, and guidewires used in interventional devices within the cardiac rhythm management (CRM), neurostimulation, and vascular markets. The majority ($20.5mm) of the division's sales are CRM-related. Following this divestiture, SLT will be able to concentrate on its surgical business--which includes implantable biomaterial products, devices for microsurgery, and surgical tools--with a specific focus on soft tissue repair and regeneration. The addition of the interventional assets enables Heraeus to increase its presence in the US and Puerto Rico. The company makes metal electrodes, coils, guidewires, and other parts for stimulation devices, defibrillators, and pacemakers used within the CRM industry. The combined businesses will create one of the US's largest medical component manufacturers.
Medical Ventures Corp.
B-Balloon Ltd.
Neovasc Medical Ltd.
Surgical device company Medical Ventures has agreed to acquire two Israeli cardiovascular companies, B-Balloon Ltd. and Neovasc Medical. (Jan.)
The acquired companies have been incubated by Peregrine Ventures (Israel). In the transaction, Medical Ventures will be financed $Cdn6mm ($5.98mm) by Frost Group (managed by Phillip Frost, MD, Peregrine's chairman). MV will consolidate 20 of its current shares into one new share; the combined shares (between 5.8-6.8mm) will be split 10% to Frost and the remaining 90% between the two companies. MV already trades on the Toronto Stock Exchange and plans to trade on the American Stock Exchange with MV's current president and COO taking over as CEO post-merger. MV sells products it gained through the acquisition of Angiometrx (stents) in 2003 and PM Devices (tissue processing technology used in cardiac reconstruction) in 2002. B-Balloon is developing stents and Boss and Ballerina stent delivery systems for coronary bifurcation and ostial lesions and Neovasc is working on minimally invasive treatments for ischemic heart disease patients including the Reducer stent for angina; the devices are scheduled to reach the market as early as this year. B-Balloon and Neovasc, which has been financed by Guidant in the past, have collectively raised about $10mm.
Opto Circuits Ltd.
Criticare Systems Inc.
Opto Circuits will tender $68mm cash to acquire fellow patient monitoring device company Criticare Systems (publicly traded)--that's about twice Criticare's 2007 sales. (Feb.)
Criticare stockholders will get $5.50 per share, a 30% premium. The company, which was founded in 1984, produces monitors that display graphic and numerical representations of vital signs, oxygen saturation, and carbon dioxide and other gas levels such as anesthesia gases. These monitoring systems, most of which can record up to 60 hours of data, have alarm features for critical conditions, and are purchased by hospitals, surgical centers, dental and physicians' offices, and nursing homes. Amongst Criticare's products are the Dox and miniSpO2T brands of noninvasive, reusable pulse oximetry sensors; the VitalView central system, which can observe up to sixteen patients at a time; the recently launched second-generation vital sign monitors VitalCare and nGenuity; and Poet, a five-anesthetic gas analyzer. Criticare gained a huge customer base in the acute care market after Cardinal Health acquired Alaris Medical, a major player in that arena, in 2004 and exited the vital signs monitoring business. Criticare also supplies modules and stand-alone monitors through agreements with original equipment manufacturers (OEMs), the biggest customer of which is Bayer's Medrad. At the end of last year Criticare had $6.4mm cash on hand and for the FYE June 30, 2007 reported a $348k net income on $31.4mm in revenues. The present transaction is beneficial to Opto in two ways--it expands its market share in the patient monitoring category--in which it already sells pulse oximeters, sensors, and multi-parameter monitors--and improves the Indian company's US presence. Investment Banks/Advisors: Roth Capital Partners (Criticare Systems Inc.)
Organogenesis Inc.
NanoMatrix Inc.
Regenerative medicine company Organogenesis has purchased privately held NanoMatrix (wound healing) for an undisclosed sum. (Feb.)
NanoMatrix was spun out of Virginia Commonwealth University to expand on an electrospinning technology for the development of three-dimensional scaffolds for wound care. The company's platform involves spinning together tiny collagen fibers into mats of different shapes and sizes that are applied directly to an open wound surface and not removed. The nanofiber surface closely resembles the structure of human tissue, allows for the rapid cessation of bleeding, and speeds healing. Organogenesis will not likely incorporate the scaffolds into its own lead product (Apligraf, a living cell-based therapy for skin ulcers), but rather will develop new offerings using the technology, mainly under the guidance of former NanoMatrix research VP Dr. Gary Cadd, who is already working in Organogenesis' R&D department.
Alliances
Alphatec Holdings Inc.
Alphatec Spine Inc.
Progressive Spinal Technologies LP
In a twenty-year agreement, Progressive Spinal Technologies licensed Alphatec Spine exclusive worldwide commercialization rights to its dynamic anterior cervical plate technologies. (Feb.)
Progressive receives an up-front payment; milestones based on product testing, design, regulatory, and sales achievements; and sales royalties. Alphatec can choose to sublicense Progressive's platform to third parties and terminate the deal at any time. The licensed technologies have a self-ratcheting mechanism that allows for axial settling of the cervical plate, maintenance of graft compression, and improvement of the rate of fusion. In December 2007, the companies signed a similar agreement in which Alphatec got an exclusive global license to Progressive's osteoporotic pedicle screw. Progressive's products are a good fit with Alphatec's portfolio, which includes the Trestle anterior cervical plate, Dynamo semi-rigid spinal system, V-Stent vertebroplasty technology, and Osseo pedicle screw. According to Alphatec, the market for dynamic cervical plates is increasing at a rate of 15% annually.
Aporo Biomedical
mNemoScience GMBH
Aporo Biomedical (catheter-based technologies) has licensed worldwide rights to use mNemoScience GMBH's (biocompatible shape-memory polymers) Bio-SMP in patent foramen ovale (PFO) and femoral artery closure devices such as atrial septal defect. (Jan.)
MNemoScience's Bio-SMP can be programmed to alter shape and rigidity when stimulated by various sources including temperature (via exposure or heat from the human body or fluids), light energy, magnetic field, or a pH change. Aporo will use the technology to create structural heart devices (including trans-catheter and minimally invasive devices) to improve healing time and then biodegrade so no implant is left. PFO requires the open tunnel between the upper heart chambers to be closed; the condition can lead to stroke or migraine headaches.
Arbor Surgical Technologies Inc.
Medtronic Inc.
Medtronic has made a minority equity investment in Arbor Surgical Technologies (minimally invasive heart valve replacement) as part of the company's $20mm Series C venture round. (Jan.)
In addition, the companies have signed an agreement that gives Medtronic exclusive worldwide marketing, manufacturing, and distribution rights to Arbor's advanced bovine trilobal pericardial tissue valves. Arbor keeps rights to its modular Trilogy aortic valve system and sutureless TRE implantation devices. Medtronic says the in-licensed technologies complement its own structural heart disease offerings, which include Hancock II, Mosaic, and Freestyle porcine and mechanical heart valves. It is also developing devices to treat septal defects and atrial fibrillation. Over 106k heart valves will be implanted into patients in the US during 2008.
BioSurface Engineering Technologies Inc.
Tornier SA
Tornier Inc.
Tornier has received exclusive worldwide rights to develop, commercialize, and distribute products that incorporate fellow orthopedic device firm BioSurface Engineering Technologies's F2A synthetic growth factor technology. (Feb.)
Initially, Tornier will develop coatings for use in ligament and tendon repair. BioSET's preclinical F2A peptide is a synthetic mimetic of the naturally occurring human FGF-2 growth factor, which helps the body to heal and repair itself. Exactly one year ago, Tornier bought Nexa Orthopedics, getting a portfolio of implants and coatings for surgeries of the shoulder, arm, hand, foot, and ankle. Tornier has been committed to acquiring and in-licensing technologies that it can use to develop products for both hard and soft tissue repair.
BodyTel Scientific Inc.
BodyTel Scientific GMBH
FourMed Medical Supplies
Middle East medical distributor FourMed Medical Supplies has licensed exclusive distribution rights to BodyTel Scientific's (wireless monitoring devices) GlucoTel, PressureTel, and WeightTel. The deal is for one year and covers eight Arabian countries, with a focus on the United Arab Emirates. (Feb.)
FourMed is responsible for distribution, compliance, and marketing expenses. The products electronically gather data--including blood glucose with the GlucoTel, blood pressure with PressureTel, and weight with WeightTel--and wirelessly transmits the information via Bluetooth to the patient's cell phone and to a secured center where both the patient and physician can access it.
Bracco SPA
Bracco Advanced Medical Technologies Inc.
Heart Leaflet Technologies Inc.
Bracco Advanced Medical Technologies (cardiovascular and neurological devices) has made an $11.2mm equity investment in private medical device company Heart Leaflet Technologies. Bracco also gets the right to buy all the outstanding common shares of HLT. (Jan.)
HLT is developing devices for percutaneous aortic valve replacement (PAVR), a surgery that is performed in patients that need a valve but are not candidates for open-heart surgery. The minimally invasive PAVR devices are implanted through the femoral artery. Dan Gladney, chairman of HLT, led Acist Medical, which was acquired by Bracco in 2001; the following year Gladney and other former Acist employees started HLT.
Caldera Medical Inc.
Coloplast AS
Caldera Medical (gynecology and urology devices) has licensed exclusive rights to Coloplast AS's patents pertaining to the transoburator method to treat female stress urinary incontinence. (Jan.)
Transoburator is a common way of treating SUI. Caldera's product offerings include Desara sling, T-Sling for SUI, POPmesh for pelvic floor reconstruction, and Hydrix for pelvic organ prolaspse and SUI. SUI afflicts about 13.5 million women in the US. It is estimated that the market for surgical intervention for incontinence will reach over $1bn by 2013.
Cardima Inc.
On-X Life Technologies Inc.
On-X Life Technologies (mechanical heart valves) has been appointed the exclusive US distributor of Cardima's (cardiovascular medical devices) surgical ablation system to treat arrhythmias. (Jan.)
On-X will sell the FDA-510(k) cleared device to cardiothoracic surgeons across the country for use in closed-chest ablation procedures (the system is also used in open-chest concomitant situations). The system combines a surgical ablation probe and Intellitemp energy management device that are inserted in the chest with a right-sided port for access to the heart while the off-pump surgery is performed. The pulmonary veins are circled on the outer surface of the heart; the device is stabilized and the radiofrequency is used to produce a long lesion (additional lesions are sometimes created to improve the results). Cardima's system will be marketed along with On-X's prosthetic heart valve, which is made with On-X pure pyrolytic carbon to reduce the risk of thrombosis.
CardioDynamics International Corp.
Recorders and Medicare Systems Ltd.
Recorders and Medicare Systems (electro-medical equipment) has licensed rights to market CardioDynamics's BioZ impedance cardiography (ICG) devices in India and the ability to integrate the technology into its patient monitoring products. (Jan.)
RMS pays product revenue for each ICG monitor and a licensing fee for each BioZ kit RMS buys. CardioDynamics says the companies are a perfect fit because of RMS's access to the Indian market. The two companies share an option in the future to partner again to lower development and manufacturing expenses. RMS's products include its 12-lead tread mill stress test, various ECG models, Phoebus patient monitors that connect to a central monitoring station, and monophasic and biphasic defibrillators.
CryoLife Inc.
Trophic Solutions LLC
CryoLife (implantable living human tissues for cardiac and vascular procedures) has licensed exclusive rights from Trophic Solutions (organ preservation) to develop, manufacture, and market solutions that will be used in the cold storage and preservation of internal organs before they are transported. (Jan.)
CryoLife gets rights to TS's patent that pertains to the use of purified antimicrobial polypeptides and cell surface receptor binding proteins in a solution for internal organ preservation. The company says early animal and human studies have shown that kidneys can be kept in the solution for up to six days before transplantation versus three days with current technology. TS principals and co-inventors of the patent, Jonathan McAnulty, PhD, and Christopher Murphy, PhD, will consult with CryoLife on the development and production of the devices.
CV Therapeutics Inc.
Medlogics Device Corp.
Medlogics Device (focused on drug-eluting coating, stents, and catheters) has licensed rights to CV Therapeutics's (developing cardiovascular drug candidates) biopolymer stent coating technology to develop a drug-eluting stent (DES). (Feb.)
CV Therapeutics gets Medlogics stock, development milestones, and royalties on the DES and any other resulting products that use the IP. Medlogics, which recently gained the CE Mark for its cobalt super alloy (COBRA) stent, plans to launch it in Europe in the next few months and use the in-licensed IP to create a next-generation DES based on COBRA. Building upon the success that previous companies have had with paclitaxel- and rapamycin-coated stents to prevent restenosis, Medlogics hopes to use CV's coating to more precisely release the drug. CV says out-licensing the drug will enable it to focus on marketing Ranexa (approved for chronic angina) and continue developing the myocardial perfusion imaging agent regadenoson (NDA filed).
Hedrin Pharmaceuticals KS
Manhattan Pharmaceuticals Inc.
Manhattan Pharmaceuticals (dermatology and immune disorders) has created Hedrin Pharmaceuticals KS, a 50/50 joint venture with Nordic Biotech Venture Fund II KS to develop and market in North America Hedrin, a non-insecticide treatment that combines dimethicone and cyclomethicone for head lice. (Feb.)
Manhattan, which transferred North American Hedrin rights to the JV, received $2.15mm in cash and $2.5mm equity in Hedrin Pharmaceuticals. The first milestone under the deal is expected to be reached by the end of April 2008; if achieved, Nordic gets a warrant to buy 7.1mm Manhattan common shares at $0.14 each, worth $1mm. If Hedrin receives medical device designation by the end of September 2008, it receives $2.5mm cash from Nordic, will pay Manhattan $1.5mm cash, and issue $2.5mm equity to Nordic and Manhattan (to maintain a 50% holding). Hedrin was originally developed by Thornton & Ross; it is sold as a device in Western Europe and a drug in the UK. The product, which is marketed in 21 countries and generated sales of $45mm (a 21% market share), kills lice by interrupting the insect's breathing and fluid management systems instead of traditional insecticide treatments that allow the pests to build up a resistance to the chemicals. Between 6-12 million Americans are afflicted with lice each year; the condition is most predominant in families with preschool or elementary school children.
Financings
Cardium Therapeutics Inc.
Cardium Therapeutics (drug candidates and devices for cardiology and ischemic uses) has netted $5mm through the private sale of 2.7mm common shares at $2 each (a 31% discount). The institutional and other accredited or qualified investors also received warrants to buy 0.35 shares at $2 apiece. Empire Asset Management was the placement agent. (Feb.)
Investment Banks/Advisors: Empire Financial Group Inc.
Lifeline Scientific Inc.
After delaying its initial public offering three times, Lifeline Scientific PLC (devices to transport organs, tissues, and cells) has finally completed the financing, raising £5.4mm ($9.7mm) through the sale of 3.7mm shares at £1.50 apiece on the Alternative Investment Market of the London Stock Exchange. (Jan.)
The company, which was established in 1998, will use the proceeds to further develop and launch its FDA-approved, CE-marked LifePort device to transport kidneys. Lifeline hopes LifePort will replace the traditional way of preserving and transporting kidneys--a cooler or cardboard box filled with crushed ice; the product has brought in revenues of $9mm since its approval in 2004. The company is developing other systems to transport hearts, lungs, livers, and pancreases. In addition to selling LifePort through its Organ Recovery Systems division, Lifeline's Bowman Research markets Ex Vivo Metrics drug development tools incorporating the LifePort technology, and its Cell & Tissue Systems applies cryobiology and cell therapy research to support the other two divisions' research. Investment Banks/Advisors: Seymour Pierce Ltd.
MAKO Surgical Corp.
MAKO Surgical (minimally invasive devices for knee surgery) has netted $47.4mm in its initial public offering of 5.1mm common shares at $10 each. The company originally filed for the IPO in September and hoped to sell the shares at $14-16 apiece. (Feb.)
The company's FDA-approved minimally invasive Tactile Guidance System uses robotics and patient-specific visualization to help surgeons prep the knee for implantation via a tiny incision. This device enables surgeons to perform the tissue-sparing bone resurfacing procedure MAKOplasty to treat early-to-mid-stage osteoarthritic knee disease. Patients undergoing the procedure have faster recovery times and improved mobility, as compared with traditional knee surgeries that require extraction and replacement of the entire joint. Just about a year ago, MAKO brought in $30mm from a Series C round. Investment Banks/Advisors: Wachovia Securities; Cowen & Co. LLC; JP Morgan Chase & Co.; Morgan Stanley & Co.
MedX Health Corp.
Canadian phototherapy device maker MedX Health Corp. has netted $Cdn3.7mm ($3.7mm) from a public offering of 5.1mm units at $Cdn0.80 each. Each unit consists of one common share and one two-year warrant exercisable at $Cdn0.90. It had originally hoped to sell up to 8.75mm units. (Jan.)
MedX manufactures and sells drug-free phototherapy devices using a specific type of light that noninvasively and nonsurgically penetrates both the skin's surface and its underlying tissues to stimulate the tissue's natural repair process. The energy produced provides a temporary increase in circulation and short-term relief of minor muscle and joint pain. Though MedX's phototherapy devices are mainly used for treating athletic injuries, repetitive strain disorders, arthritis, stiff/sore muscles, and minor cuts, bruises and swelling, the company recently introduced in Canada a line of dental laser products ( branded Oralase). With the proceeds from this offering, it plans to also expand phototherapy into the wound dressing market. Additionally the funding will enable MedX to increase its distribution networks, marketing programs, and R&D within these new therapeutic areas. Investment Banks/Advisors: Research Capital Corp.