Deals Shaping the Medical Industry (07/2010)
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 Elsevier's Strategic Transactions database, providing comprehensive transaction coverage from 1991 to the present.
In Vitro Diagnostics
Alliances
Qiagen NV
DxS Ltd.
Roche
Roche Molecular Systems Inc.
Qiagen NV and Roche Molecular Diagnostics have withdrawn pending litigation and settled their dispute over the distribution of TheraScreen companion diagnostics produced by Qiagen's Qiagen Manchester Ltd. subsidiary. (May)
Roche filed a suit three months ago, claiming that DxS was trying to break its 2008 distribution deal after it was acquired by Qiagen. DxS indicated that Roche had not helped in the development of software, but Roche countered and said it had no obligation under the distribution deal. If DxS persevered, Roche could have lost the ability to sell two valuable tests, one of which ( TheraScreen EGFR29) can be used to determine which lung cancer patients would respond best to Roche's Tarceva. Roche keeps rights to distribute two assays it currently markets under the TheraScreen name, as well as future versions. Qiagen now has the exclusive right to distribute the assays under the Qiagen TheraScreen name as well as all other assays that are developed and manufactured by DxS. Roche has been granted the option to expand the length of the agreement for one of the assays-- TheraScreen EGFR--beyond its current 2011 term. The companies signed the original TheraScreen alliance in 2008 under which Roche was granted exclusive global rights to distribute TheraScreen K-RAS for use in determining which colorectal patients would best respond to MAb therapies, and exclusive worldwide rights (excluding the US, Canada, Mexico, and Hong Kong) to TheraScreen EGFR29, which detects 29 of the most common mutations on the EGFR gene that correspond to the effectiveness of tyrosine kinase inhibitors in lung cancer patients. Roche and Qiagen have been linked since 2002, when they set out to design a system to more efficiently detect hepatitis B and C and HIV.
Financings
GenMark Diagnostics Inc.
GenMark Diagnostics Inc. (formerly Osmetech; molecular diagnostic systems) has completed its initial public offering. It netted $25.7mm through the sale of 4.6mm common shares at $6 each, lower than the $8-10 range the company had expected. (May)
Formed in 1993, Osmetech went public in 1996 on the AIM in London, but will now trade solely on NASDAQ after merging into GenMark in order to attract US investors. The company has been having financial difficulties; it reported 2009 revenues of only $910k and has an accumulated deficit of $131mm (as of the end of March 2010). Of the $25.7mm in IPO money, the company plans to use $10mm to develop additional tests, $8mm for sales and marketing activities, and $3mm to continue working on its AD-8 system. GenMark will continue to offer diagnostics that are used on its XT-8 system for cystic fibrosis genotyping, warfarin sensitivity, and thrombophilia risk (all FDA-cleared), and a respiratory viral panel (investigative use only). Eight other tests are in development, along with a next-generation AD-8 system that will integrate DNA amplification with eSensor DNA detection. GenMark is the first diagnostic company to complete an IPO since Nanosphere in late 2007. Investment Banks/Advisors: William Blair & Co.; Piper Jaffray & Co.; ThinkEquity Partners LLC
Pharmaceuticals
Acquisitions
BASF SE
Cognis Holding Luxembourg SARL
BASF SE has agreed to pay €3.1bn ($3.8bn) in cash for fellow German specialty chemicals supplier Cognis Holding Luxembourg SARL, which is privately held by Permira Funds, Goldman Sachs Capital Partners, and SV Life Sciences. (June)
Analysts had predicted a purchase price of between €2.7-3.5bn for Cognis, which was formed in 1999 and sold by consumer products company Henkel for €2.5bn in 2001. Cognis will be integrated into BASF's Performance Products segment. The company provides dietary supplements, APIs , and drug delivery agents under the brand names PharmaLine, Speziol TPGS Pharma, Dermaz, Chitopharm, and Delios. Cognis also markets Cegesoft SB and--through its French division Laboratories Serobiologiues-- Eterniskin, Elestan, and Radianskin to improve skin elasticity and firmness. The acquisition will help BASF achieve its goals of generating less cyclical earnings, increasing its cash flow, and expanding its market share (post-merger it will hold 14% of the market). Cognis' personal care and home ingredients division will reduce BASF's mainly industrial focus--about 56% of Cognis' total 2009 sales of €2.6bn were from care chemicals, a market that is expecting 4% annual growth. BASF has been buying up its competition over the past several years; it purchased Engelhard in 2006 and Ciba in 2008, both for €2.8bn apiece.
Biovail Corp.
Valeant Pharmaceuticals International
Biovail Corp. has agreed to acquire Valeant Pharmaceuticals International Inc. in a reverse merger valued at $3.3bn that will build a specialty pharma company with projected revenues of $1.75bn. Valeant shareholders will receive $43.23--consisting of $16.77 in cash and 1.7809 in Biovail shares for each Valeant share they own. Biovail will have a 50.5% stake in the combined company, and Valeant owns the remainder. (June)
The new entity will use the name Valeant Pharmaceuticals International Inc. and provide shareholders with a one-time $1 per-share dividend. The merger of Valeant and Biovail will provide complementary product lines in specialty CNS and dermatology with a strong North American presence (especially within Canada), as well as an expanded reach in emerging markets such as Mexico and Brazil, where the combined company has over 30 launches planned for branded generics within the next year. Heading up the dermatology portfolio will be Biovail's Zovirax genital herpes treatment; Valeant's team--which already sells Efudex (actinic keratoses), Atralin (acne), Oxsoralen-Ultra (psoriasis), and other dermatology therapeutics--will take over marketing from a contract sales force. Biovail's Zenazine (for involuntary movements that accompany Huntington's disease) and Phase III Stoccato (for Parkinson's disease psychosis, schizophrenia, and Alzheimer's disease psychosis) will be added to Valeant's Migranal (migraines) and Tasmar and Zelapar (both for Parkinson's disease). Valeant has undergone a major restructuring since 2008, narrowing its focus to dermatology and neurology, divesting European operations, and building up its share in emerging markets. In the last year it has acquired four companies, two of which are located in Brazil. Valeant has less than $100mm in cash on hand and has been looking for ways to replace the $70mm in sales it will lose when its Diastat epilepsy drug faces generic competition later this year. Valeant's J. Michael Person will continue as CEO, Biovail's CEO Bill Wells will become chairman, and the board will have equal representation from both firms. The companies have secured $2.8bn in funding through a loan facility with Goldman Sachs, Morgan Stanley, and Jefferies & Co. Investment Banks/Advisors: Morgan Stanley & Co. (Biovail Corp.); Goldman Sachs & Co.; Jefferies & Co. Inc. (Valeant Pharmaceuticals International)
Covidien Ltd.
Covidien Ltd. has divested its specialty chemicals business to an affiliate of private equity firm New Mountain Capital for $280mm in cash. (May)
Headquartered in NJ, the unit makes and sells high-purity chemicals and products--under the names J.T. Baker and Mallinckrodt--that are used in research laboratories, microelectronics, environmental testing labs and universities, as well as pharma, biotech, and other industrial manufacturing. The division brought in 2009 sales of $414mm; the first half of 2010 has seen $216mm in sales. Covidien is selling the unit to streamline its product offerings and free up resources for its more profitable mainstream health care businesses, namely those that focus on vascular and neurovascular diseases. It sold off its sleep diagnostics products to embla and its oxygen therapy devices to Caire late last year.
Gilead Sciences Inc.
CGI Pharmaceuticals Inc.
To broaden its research capabilities into the field of kinase biology and small-molecule chemistry, Gilead Sciences Inc. is acquiring privately held CGI Pharmaceuticals Inc., paying a potential $120mm in cash; most of it up front and the rest in earn-outs should CGI achieve certain clinical development milestones. (June)
CGI, a Yale University spin-out, was founded as Cellular Genomics in 1998. It has raised $62mm in VC financing to date through three private rounds. The company uses a chemical-genetics approach it calls ASKA (Analog Sensitive Kinase Alleles) to understand kinase function. The discovery engine it has developed addresses the difficulties associated with the selectivity of kinase targets. CGI has generated a library of over 50k small-molecule kinase inhibitors; the lead compound from this library targets spleen tyrosine kinase (Syk) and is in preclinical testing for serious inflammatory disease applications, including rheumatoid arthritis. It also has two discovery programs--focused on multiple therapeutic areas including oncology, allergy, autoimmune, and inflammatory diseases--based on hits obtained from CGI's library. Over the years CGI has partnered its ASKA platform with companies including Pfizer, Merck Serono, Eli Lilly, Affymetrix, and Schering AG. Gilead hopes to take advantage of CGI's integrated drug discovery infrastructure to expand its own research efforts and leverage the company's small-molecule therapeutic compounds in multiple oncology and immunology indications by advancing these candidates into the clinic to diversify the scope of its own antiviral-heavy pipeline. CGI will remain in its current Branford, CT headquarters as a wholly owned Gilead subsidiary.
GlaxoSmithKline PLC
Laboratorios Phoenix SA
GlaxoSmithKline PLC has agreed to acquire closely held Laboratorios Phoenix SA (branded generics) for $253mm in cash. (June)
The deal will help GSK further expand into the Latin American region and give it access to Phoenix's cardiovascular, gastrointestinal, metabolic, ophthalmic, respiratory, neurology, and urology drugs, as well as antiseptics and nutraceuticals that will continue to be sold by Phoenix's primary care sales force. GSK also gains a manufacturing facility near Buenos Aires. Phoenix was formed in 1939 and reported £70mm in sales last year, making it the eighth-largest pharma company in Argentina. Phoenix will keep its name and remain a separate entity from GSK Argentina, which itself brought in 2009 sales of £100mm (£56 of which came from drugs). IMS Health recently named Argentina among the top ten countries in the emerging markets sector, with sales estimated at $3bn and the third-highest growth rate (22%). This adds another regional deal to GSK's expansion spree. In the last several years the Big Pharma has acquired a 9.9% stake in South Korea's Dong-A Pharmaceutical, 12.6% of Japan's JCR Pharmaceuticals, and 19% of South Africa's Aspen Pharmacare, in addition to creating joint ventures with China's Jinagsu Walvax Biotech and Shenzhen Neptunus Interlong Bio-Technique. GSK has also purchased UCB's emerging markets business for €515mm, and Bristol-Myers Squibb's branded generics in Lebanon, Syria, Yemen, Jordan, and Libya for $23mm.
Grifols SA
Talecris Biotherapeutics Inc.
Plasma protein manufacturer Grifols SA will buy privately held Talecris Biotherapeutics Inc. (coagulation, immunology, critical care, neurology, and pulmonary treatments) in a deal valued at $3.4bn, plus $600mm in debt. Grifols is paying $19 in cash and issuing 0.641 new non-voting shares for each outstanding Talecris share. The implied price comes out to $26.16 per share (a 59% premium). (June)
Talecris was formed as NPS BioTherapeutics in 2005 when Bayer divested its plasma products business to investors Cerebrus Capital Management and Ampersand Ventures. Following Talecris's $550mm IPO in 2009, Cerebrus held a 49% stake in the plasma protein company. Cerebrus has approved the pending acquisition, ready to try again to sell Talecris following an attempt in 2008 that saw CSL offering $3.1bn for the company, but having to back down following antitrust issues. The FTC was concerned that a CSL/Talecris combination, which would have created the second-largest plasma-derived drug company globally, would substantially reduce competition for intravenous immune globulin (IVIG) and albumin therapies in the US since CSL and Baxter would have then held over 80% of the market. The current deal should not create such issues, as Grifols is smaller than CSL. The newly combined entity will become the third largest producer of plasma derivatives in the world, with pro forma revenues of $2.8bn. Grifols benefits strongly from Talecris's US presence--Talecris had 2009 revenues of over $1.5bn, 66% of which came from the US (as opposed to Grifol's 32% in that territory)--and Talecris will see a large increase in the manufacturing of its products due to Grifol's strengths in that area. Talecris's products include the 10% IVIG solution Gamunex for chronic inflammatory demyelinating polyneuropathy, primary immunodeficiency, or idiopathic thrombocytopenic purpura; Prolastin, an alpha-1 proteinase inhibitor for AAT deficiency; and other treatments for bleeding and autoimmune diseases. The company is developing an immune globulin and plasma protein therapies for peripheral arterial and vascular occlusion, immune deficiency, and neurology disorders. Therapy areas between Grifols and Talecris are complementary with no overlap; Grifols sells its own plasma derivatives and has treatments in clinical stages for biosurgery indications, Alzheimer's liver cirrhosis, and hemorrhage. The companies will work together to help Talecris become self-sufficient in its plasma collection and fractionation capabilities, a point that Grifols has already reached on its own. Investment Banks/Advisors: Nomura Securities International Inc. (Grifols SA); Morgan Stanley & Co.; Citigroup Inc.; Natixis Bleichroeder Inc. (Talecris Biotherapeutics Inc.)
Johnson & Johnson
Centocor Ortho Biotech Inc.
RespiVert Ltd.
Johnson & Johnson's Janssen Products LP division has acquired RespiVert Ltd., a closely held company working on small-molecule inhaled treatments for respiratory diseases. (June)
Formed in 2006 by a team that includes two ex-GlaxoSmithKline PLC executives, RespiVert brought in £13mm two years ago from Advent Venture Partners, Fidelity Biosciences, Imperial Innovations, and SV Life Sciences. Although the exact price of the acquisition was not disclosed, it has been speculated that the amount was about £73mm ($100mm) based on what Imperial Innovations--which held a 13.4% stake in the company--was paid (£9.5mm, almost five times its original investment). RespiVert will keep is R&D operations at the Imperial College of London and Dr. Garth Rapeport, one of its founders and CEO, will continue with the company. RespiVert's preclinical RV568 and RV1088 for severe asthma, COPD, and cystic fibrosis are expected to enter the clinic later this year and present the opportunity for first-in-class designation. The same day J&J announced the RespiVert acquisition, it penned an alliance with Orexo for two preclinical asthma/COPD programs. J&J, while not known for its pulmonary products--though it does have Simponi and Stelara for sarcoidosis and CNTO888 for idiopathic pulmonary fibrosis all in Phase II--is trying to get a strong foothold in a fast-growing market currently led by GlaxoSmithKline ( Advair), Merck ( Singulair), Novartis ( Foradil and Xolair), AstraZeneca ( Symbicort), and Boehringer ( Spiriva).
Alliances
Abbott Laboratories Inc.
Neurocrine Biosciences Inc.
Neurocrine Biosciences Inc. (developing treatments for neurological and endocrine diseases) has licensed Abbott Laboratories Inc. exclusive worldwide rights to develop and commercialize elagolix and next-generation gonadotropin-releasing hormone (GnRH) antagonists for women's and men's health. (June)
Abbott will pay $75mm up front, up to $500mm in development, regulatory, and commercialization milestones, certain internal collaboration expenses, and sales royalties. In addition, the company will fund all future development of the candidates. Elagolix, an oral GnRH antagonist, recently completed a Phase IIb trial in which women treated with elagolix showed an improvement in the symptoms of endometriosis using the modified co-primary endpoints of dysmenorrhea and non-menstrual pelvic pain. Abbott will also study the compound as a treatment for uterine fibroids and evaluate preclinical second-generation GnRH antagonists for other conditions including prostate cancer and benign prostatic hyperplasia. Elagolix can partially suppress estrogen with a reduced incidence of related side effects such as bone loss. If approved, it would be the only oral therapy approved for endometriosis pain. There are currently only two marketed therapies--the GnRH agonist leuprolide and Depo-Provera--both of which are injections that carry a risk for severe side effects. Last month when Neurocrine published Phase II results, the company said it was considering both Big Pharmas and smaller specialty pharmas as partners for elagolix.
AdventRx Pharmaceuticals Inc.
Theragence Inc.
Mast Therapeutics Inc. (specialty oncology pharmaco) has granted Theragence Inc. (bioinformatics) exclusive worldwide rights to develop and sell its failed colorectal cancer candidate CoFactor (ANX510; 5, 10-methylenetetrahydrofolate). (June)
AdventRx gets commercialization milestones of up to $30mm for sales in the US, EU, and Japan, as well as royalties on global sales. The company had been working on CoFactor, a biomodulator designed to be used in combination with and reduce toxicity associated with the chemotherapeutic 5-fluorouracil (5-FU). In 2007, AdventRx shelved further development on the compound following poor Phase IIb trial results. Theragence, which provides computational drug development services for pharma companies and also rescues other firms' failed drug prospects, hopes to get the compound back into the clinic. AdventRx, meanwhile, will continue focusing on its lead late-stage projects Exelbine (ANX530) for non-small cell lung cancer and breast cancer, and ANX514 for breast, non-small cell lung, prostate, gastric and head and neck cancers. Both are new emulsion formulations of existing chemotherapeutics (vinorelbine and docetaxel, respectively).
AndroScience Corp.
Orient Europharma Co. Ltd.
Orient EuroPharma Co. Ltd. (cancer and dermatology drugs and nutritional supplements) has licensed exclusive marketing rights to AndroScience Corp.'s (developing therapeutics that focus on androgen) ASCJ9 topical acne drug candidate for adults in Taiwan, Hong Kong, South Korea, New Zealand, Australia, and other Asia Pacific markets. (May)
Orient Europharma will cover expenses pertaining to a Phase IIb trial that is set to begin in September. AndroScience will provide new drug approval materials after it completes submission in the US or Europe. The company has created active compounds called androgen receptor degradation enhancers that work on the androgen activation pathways to limit androgen (male hormone) that is associated with acne, including sebum production, growth, and differentiation. ASCJ9 fits in nicely with Orient Europharma's other dermatology/cosmeceutical partnerships, which include rights to QMed's Restylane, Dermofarm's Cumlaude, Noevir's NOV, and Clarins' Kibio.
Bayer AG
Bayer Schering Pharma AG
OncoMed Pharmaceuticals Inc.
Bayer HealthCare Pharmaceuticals AG and cancer-focused OncoMed Pharmaceuticals Inc. will collaborate to identify and develop up to five new stem cell therapeutics--antibodies, proteins, and/or small molecules--that target the Wnt signaling pathway, which is thought to be critical to the growth and survival of cancer. (June)
Terms of the agreement call for Bayer to pay $40mm up front, money for any candidates it options, and development and commercial milestones (including near-term milestone payments). For each compound developed through Phase III and regulatory approval, Bayer could pay up to $387.5mm per large molecule and $112mm per small molecule, including net sales milestones. OncoMed will apply its human cancer stem cell models to discover large-molecule candidates and is responsible for moving three compounds through Phase I trials, up until which point Bayer has the option to an exclusive worldwide license. Should Bayer opt for rights, it would take over all future development and commercialization. In return, OncoMed is eligible for double-digit sales royalties, and under certain provisions the company may choose to co-develop therapeutics with Bayer. OncoMed's lead Wnt pathway antibody OMP18R5, which is included in the deal, should enter the clinic next year. Bayer will work on identifying and developing small-molecule candidates and will receive assistance from OncoMed, which will use its assay technology and expertise with in vitro/in vivo profiling. (OncoMed chose to partner with Bayer because of its expertise in small-molecule drug development and because OncoMed gets funding for doing development work.) OncoMed will be eligible to receive single-digit sales. The alliance is only OncoMed's second to date; in late 2007 it gave GlaxoSmithKline's Center of Excellence for External Drug Discovery the option to four of its MAbs against the Notch cancer stem cell pathway. Under that agreement, potential milestones could reach $1.4bn.
Beiersdorf AG
Labtec GMBH
GlaxoSmithKline PLC
GlaxoSmithKline Consumer Healthcare
Transdermal drug delivery company tesa Labtec GMBH (a Beiersdorf AG subsidiary) has licensed GlaxoSmithKline Consumer Healthcare LP exclusive rights to market a new topical patch to treat cold sores. (June)
Labtec will manufacture the product for GSK. The patch uses Labtec's LabiPatch technology, which allows the active ingredient to be applied via a thin patch on the lip where it maintains a moist environment and promotes healing of cold sores. The company has also incorporated the technology into the first ever nail patch for fungal infections. Just six months ago GSK in-licensed another cold sore therapy; it got exclusive US and Canadian rights to an OTC version of NanoBio's NanoHPX (NB001).
BioDelivery Sciences International Inc.
Arius Pharmaceuticals Inc.
KunWha Pharmaceutical Co. Ltd.
BioDelivery Sciences International Inc. (drug delivery) and its Arius Pharmaceuticals Inc. division have granted Korean drug company Alvogen Korea exclusive rights to develop and commercialize its BEMA formulation of the cancer pain drug fentanyl in South Korea. (May)
KunWha paid $300k up front and is responsible for another $975k in milestones, as well as sales royalties. BioDelivery's BEMA drug delivery technology allows for the buccal (cheek) delivery of therapeutics via a mucoadhesive, fully dissolvable polymer patch. Fentanyl was the first product to which BioDelivery applied the platform, and developed it into Onsolis, the branded name of the drug that is currently sold in the US and Europe by Meda. KunWha will carry out all development and regulatory activities in its territory, and adds the therapy to a portfolio that includes cardiovascular, infectious disease, respiratory, and CNS treatments.
BioLineRx Ltd.
Cypress Bioscience Inc.
Cypress Bioscience Inc. (CNS therapies and personalized diagnostics) has licensed exclusive development and commercialization rights in the US, Canada, and Mexico to Israeli drug company BioLineRx Ltd.'s BL1020 (renamed CYP1020) for schizophrenia. (June)
Cypress paid $30mm up front and could hand over an additional $160mm in clinical and regulatory milestones (through to approval in the US); $85mm in sales milestones; tiered royalties between 12-18%; and an extra $90mm associated with approval of the candidate in other indications. Cypress is responsible for carrying out and funding all development and regulatory activities. CYP1020 is an oral treatment that has shown positive Phase IIb results in the treatment of schizophrenia symptoms. It works by blocking the neurotransmitter dopamine and enhancing GABA activity, and has exhibited more favorable safety and efficacy than existing antipsychotics. Cypress hopes to eventually sell CYP1020 alongside its one marketed drug-- Savella--which it developed with partner Forest Laboratories to treat fibromyalgia. The out-licensing is the second within the last 12 months for BioLineRx; in July 2009, the company granted Ikaria rights to its myocardial infarction drug BL1040.
Blairex Laboratories Inc.
Church & Dwight Co. Inc.
Church & Dwight Co. Inc. has agreed to pay $70mm for fellow OTC therapeutics company Blairex Laboratories Inc.'s Simply Saline product line. (May)
The Simply Saline brand generates about $20mm in annual sales. The homeopathic products are designed to flush dust, pollen, and other irritants from a patient's nose. It can be used by both adults and for babies with colds, allergies, and sinus problems. Church & Dwight has been paring down its portfolio--it recently divested two non-core brands ( Brillo and Lambert Kay pet products)--and is looking at ways to boost its sales in the tough economic climate. Simply Saline holds the top spot in nasal saline solution sales.
Boehringer Ingelheim GMBH
Marinomed Biotechnologie GMBH
Marinomed Biotechnologie GMBH (developing therapies using its mavirex antiviral respiratory technology) has licensed Boehringer Ingelheim GMBH rights to market its over-the-counter antiviral nasal spray in Europe (excluding Austria and the UK), South America, and parts of Asia and Australia. (June)
BI will pay about €1mm ($1.2mm) up front, plus market entry milestones and royalties. The company will sell the OTC common cold treatment under the Mucosolvan brand name. BI says that Mucosolvan (ambroxol), one of its biggest sellers, generated net sales of $190.6mm in 2009. Marinomed is using its mavirex platform to create therapies aimed at over 200 different respiratory virus strains. In clinical trials, the technology has been validated in treating the common cold in both adults and children. The agreement falls in line with BI's strategic goal of expanding its consumer health care business and focusing less on prescription drugs. Earlier this year, it paid $368.6mm to acquire the remaining 39.8% of top public Japanese OTC drug company SSP that it did not already own.
Boehringer Ingelheim GMBH
Neurocrine Biosciences Inc.
Neurocrine Biosciences Inc. (therapeutics for neurological and endocrine diseases) and Boehringer Ingelheim GMBH will collaborate on the research and development of small-molecule GPR119 agonists for Type II diabetes and additional indications. (June)
Initially, the parties will jointly identify candidates and move them into preclinical studies. Boehringer Ingelheim will then be responsible for worldwide development and commercialization. In return for rights to the compounds, BI pays Neurocrine $10mm up front, funding for its discovery work, up to $225mm in potential development, regulatory, and commercial milestones, plus sales royalties. Neurocrine will use its SiNERG platform to test various treatments that target GPR119 receptors, which are located in the digestive system and stimulate increased insulin production. BI will add its expertise in metabolic disorders. This collaboration was announced just one day after Abbott Laboratories Inc. shelled out $75mm up front and agreed to pay a potential $500mm in milestones for exclusive global rights to Neurocrine's elagolix and next-generation gonadotropin-releasing hormone antagonists for women's and men's health. Both deals enable cash-restrained Neurocrine to advance its pipeline candidates with limited out-of-pocket expense.
Clinical Data Inc.
Santen Pharmaceutical Co. Ltd.
Santen Pharmaceutical Co. Ltd. (eye therapeutics) has exercised its option to license worldwide rights to Clinical Data Inc.'s ATL313, a selective adenosine A2A agonist for ophthalmic diseases that include glaucoma. (May)
Santen will provide $2mm up front; development, regulatory, and commercialization milestones; and royalties. Santen and Clinical Data signed the original agreement in May 2007, since which time Santen evaluated CD's library and selected ATL313 based on its promising preclinical data for ocular pain. Santen also gets the option (exercisable within the next year) to another ophthalmic compound. Clinical Data keeps the rights to develop ATL313 for areas outside eye therapeutics; it has licensed some of those rights to CombinatoRx for B-cell cancer therapies including multiple myeloma. (Clinical Data has a co-development option to the cancer therapeutics following the results of a Phase IIa study.) In the last month Santen has received Japanese approval for two ophthalmic drugs-- Cosopt, which was licensed from Banyu earlier this year for glaucoma and ocular hypertension, and Diquas for dry eye under a 1999 deal with Inspire.
Diamyd Medical AB
Johnson & Johnson
Ortho-McNeil-Janssen Pharmaceuticals Inc.
Johnson & Johnson's Ortho-McNeil-Janssen Pharmaceuticals Inc. has received exclusive worldwide development and marketing rights to Mertiva AB's (metabolic and neurology therapeutics) Phase III Diamyd, a GAD65 antigen-based vaccine to prevent and treat Type I diabetes. (June)
Diamyd gets $45mm up front and may receive development, regulatory, and commercialization milestones of up to $580mm, plus tiered royalties. The companies will equally share expenses for ongoing R&D activities until results of the first Phase III study are available (due the first part of 2011); OMJPI then has the option to assume full development of the drug candidate. Diamyd keeps the exclusive right to sell the resulting product in the Nordic countries and retains the therapeutic use of the GAD65 gene and derivatives, fragments, and variants of the GAD65 protein. Diamyd is being assessed in Phase III trials to determine if the drug candidate can delay or prevent Type I diabetes in newly diagnosed patients. (There are no treatments approved for the disease.) Researchers have discovered that they can detect auto-antibodies to GAD in blood samples of future Type I diabetes patients five years before symptoms appeared. The Diamyd vaccine prevents the autoimmune response to the GAD protein, ultimately suppressing immune cells that attack the pancreatic beta cells. This is the second diabetes deal J&J announced in one day; it also gained rights to preclinical compounds for Type II diabetes from Metabolex. These deals complement J&J's diabetes franchise offerings, which up until this point have focused on blood glucose monitoring devices for diabetics. Once approved, J&J will be able to market the resulting products along with its devices to primary care physicians, the doctors that typically treat the disease. The deals should also alleviate the negative aura surrounding the product recall that J&J had to issue for some pain therapeutics, and the lagging global sales of its top sellers-- Topamax (epilepsy) and Risperdal (schizophrenia)--due to generic competition.
Durect Corp.
Hospira Inc.
Drug delivery company Durect Corp. has granted Hospira Inc. rights to co-develop and exclusively sell its Posidur ( SABER-bupivacaine) for post-surgical pain in the US and Canada. (June)
Durect got $27.5mm up front and could receive up to $185mm in development, regulatory, and sales milestones, plus royalties. The companies will jointly fund and carry out remaining development activities of the therapy, which is currently in Phase III trials. Once approved, Hospira takes responsibility for all costs and manufacturing. Posidur is a long-acting version of the anesthetic drug bupivacaine. It is injected directly into the site of a surgical wound prior to closure, and provides up to 72 hours of pain relief from a single dose. The therapy was designed with Durect's SABER delivery system, which uses a high-viscosity base in solution that allows for the extended and controlled release of an active drug ingredient. (Under terms of the deal, Hospira also gets exclusive rights to any other local anesthetics based on SABER which are developed as part of the transaction.) Durect developed Posidur with SABER to overcome drawbacks associated with standard oral post-surgery pain treatment plans, including dosage frequency, negative systemic side effects (particularly GI), and extended post-op recovery time due to ineffective pain management. Under a 2006 deal, Nycomed will market Posidur in Europe and ten other countries. Hospira adds the therapy to its portfolio of acute care products which includes antibiotics, anesthetics, anti-emetics, and corticosteroids.
Eisai Co. Ltd.
Eisai Inc.
Helsinn Healthcare SA
Helsinn Birex Pharmaceuticals Ltd.
Helsinn Therapeutics (US) Inc.
Specialty pharmaceuticals company Helsinn Group and Japanese pharmaco Eisai Inc. are continuing an already successful relationship through the signing of a new deal involving a combination chemotherapy-induced nausea and vomiting (CINV) treatment. (June)
The new therapy will join together Helsinn's Phase III netupitant, a neurokinin-1 (NK1) receptor antagonist, and palonosetron, a serotonin-3 (5-HT3) receptor antagonist. Under a 2001 agreement, Helsinn granted MGI Pharma (which was later acquired by Eisai) marketing rights to palonosetron, and MGI then launched it as Aloxi in the US. (Concurrent with this month's announcement, the companies stated that Helsinn has taken US co-promotion rights to Aloxi.) In the current deal, Helsinn will carry out all development and regulatory activities for the combination compound, and will hold the NDA. Once approved by the FDA, the treatment (in fixed-dose oral and intravenous formulations) will be co-promoted in the US by Eisai and Helsinn's US division Helsinn Therapeutics (US) Inc., and will be manufactured by Helsinn Birex Pharmaceuticals Ltd.
Endo Pharmaceuticals Holdings Inc.
Novartis AG
Sandoz
Penwest Pharmaceuticals Co.
Endo International PLC and Penwest Pharmaceuticals Co. have settled Opana (oxymorphone) patent litigation with Novartis AG's Sandoz International GMBH. (June)
Sandoz now has the right to sell a generic form of Opana beginning September 15, 2012. Co-developed by Endo and Penwest under a 1998 agreement, Opana was approved in 2006 for moderate-to-severe pain in patients that need continuous opioid treatment for an extended time. Simultaneous with the Sandoz deal, Endo and Penwest announced they had also reached a settlement with Impax to begin selling a generic of Opana in early 2013. Opana litigation is not new to Endo and Penwest; in addition signing to deals with Sandoz and Impax, they also settled with Barr Laboratories (now part of Teva) in April and with Actavis last year.
Endo Pharmaceuticals Holdings Inc.
Impax Laboratories Inc.
Penwest Pharmaceuticals Co.
Endo International PLC and Penwest Pharmaceuticals Co. have settled patent litigation with Impax Laboratories Inc. pertaining to Opana (oxymorphone). (June)
Impax has been granted a license to market a generic form of Opana (prescribed for moderate-to-severe pain in patients needing continuous opioid treatment) starting on January 1, 2013. It will have 180-day exclusivity for 5, 10, 20, 30, and 40mg tablets. Endo and Penwest simultaneously settled with Sandoz International GMBH, enabling that company to sell an Opana generic as of September 2012. Concurrent with the Opana deal, Endo and Impax penned a development and co-promotion agreement for non-neurological products in the US.
Endo Pharmaceuticals Holdings Inc.
Impax Laboratories Inc.
Endo International PLC and Impax Laboratories Inc. have signed a co-promotion agreement for a Parkinson's disease therapeutic. (June)
Endo will pay milestones of up to $40mm for the development of Phase III IPX066 and gets the ability to co-promote it for non-neurology indications in the US. IPX066 is an extended-release carbidopa/levodopa capsule that may delay the onset of motor complications in patients in the early stages of Parkinson's and improves dyskinesias for patients in the advanced stages of the disease. The alliance expands Endo's product offerings; up until now its main focus had been on endocrine, pain management, and cancer therapeutics. Concurrent with this deal, the companies--along with Penwest, Endo's development partner--settled patent litigation enabling Impax to sell a generic form of Endo and Penwest's pain drug Opana in 2013.
Ferring Pharmaceuticals AS
Xanodyne Pharmaceuticals Inc.
Ferring Pharmaceuticals AS (gastrointestinal, metabolic, urology, and gynecology therapeutics) has received worldwide rights to Xanodyne Pharmaceuticals Inc.'s (pain management drugs) first-in-class Lysteda (tranexamic acid) non-hormonal therapy for women with cyclic heavy menstrual bleeding (menorrhagia). (May)
Ferring will first focus on the sale of Lysteda in the US; it was approved by the FDA in November 2009 and may help the estimated 22 million patients suffering from the condition in that market. Lysteda will expand the scope of Ferring's women's health portfolio, which up until now included the fertility treatments Menopur, Bravelle, Repronex and Endometrin, and Prosed DS for UTI/IC pain. Xanodyne will now be able to pursue its renewed focus on pain management. The most recent addition to its portfolio is the NSAID Zipsor for acute pain in adults. Funds from the Lysteda transaction will be used for Zipsor activities and to explore other in-licensing opportunities. Just last month, Ferring and Xanodyne teamed up to expand the market reach of Zipsor; Ferring agreed to use its current orthopedic sales force to co-promote the drug in the US to orthopedic surgeons, rheumatologists, sports medicine doctors, and psychiatrists.
Forest Laboratories Inc.
TransTech Pharma Inc.
vTv Therapeutics Inc. has licensed Forest Laboratories Inc. exclusive worldwide rights--excluding the Middle East and North Africa where TransTech retains rights--to develop and commercialize a portfolio of highly selective glucokinase activators (GKAs), which target an enzyme found in the liver and pancreas that is involved in glucose sensing. (June)
TransTech Pharma receives $50mm up front, up to $1bn in development and commercial milestones, and sales royalties. Under the agreement Forest gains lead compound TTP399 (recently entered Phase II) as well as Phase I and preclinical candidates, and will handle all costs related to their development and commercialization. The licensed small molecules are a new class of glucose-lowering agents for treating Type II diabetes without the risk for hypoglycemia and have demonstrated their ability to decrease serum lipids that are often elevated in diabetics. Studies have also shown that oral administration reduces fasting blood glucose levels. TransTech originally got rights to the GKA program from Novo Nordisk in early 2007. Other companies with GKAs in the clinic are AstraZeneca, Amgen, and Eli Lilly. The TransTech deal comes just two months after Forest terminated an alliance with Phenomix involving the dipeptidyl-peptidase-4 inhibitor dutogliptin for Type II diabetes.
GlaxoSmithKline PLC
Medivir AB
Infectious disease-focused Medivir AB has licensed GlaxoSmithKline PLC exclusive rights to commercialize its over-the-counter Xerclear (acyclovir/hydrocortisone) cold sore cream in key markets including Europe, Japan, India, Australia and New Zealand. (North and South America, China, South Korea, and Israel are excluded in the agreement.) (June)
Medivir receives up to €3mm ($3.7mm) in up-front and pre-commercialization payments, plus double-digit sales royalties. GSK will fund all future commercial development of Xerclear in the licensed territories. The product, which was recently approved in the US and Europe, is the only cold sore treatment available that can help prevent the appearance of lesions. Medivir plans to sell Xerclear in the Nordic region but will seek partners for marketing in other territories. (In February, Medivir gave Meda AB exclusive commercialization rights in North America, where the cream is being sold as Xerese.) GSK will market Xerclear alongside its Zovirax therapy, which is also indicated for herpes as well as other viral infections. The agreement allows the Big Pharma to further expand its OTC business. Just two days ago, the company took on exclusive marketing rights to Labtec's topical patch to treat cold sores.
Graceway Pharmaceuticals Inc.
Meda AB
Meda AB has licensed exclusive European rights to Graceway Pharmaceuticals LLC's Zyclara (3.75% imiquimod) topical cream for actinic keratosis. (May)
Meda also gets exclusive rights to follow-on products. Graceway will receive an undisclosed up-front payment and single-digit royalties; no milestones will be paid. Meda already sells a stronger formulation of imiquimod (5%) in Europe as Aldara, which had 2009 sales of SEK500mm. Graceway's 3.75% version boosts Meda's market share, as it can be used on larger portions of the body. It is applied once daily and is better tolerated by patients due to the lower concentration of the drug. Imiquimod activates a patient's own immune defenses through the skin. Europe has approximately 30 million actinic keratosis patients, but only a small fraction of that population receives treatment for this condition, which can lead to skin cancer. Originally developed by 3M, imiquimod was purchased by Graceway when it bought 3M's branded drugs in the US, Puerto Rico, Canada, and Latin America in 2006; Meda bought 3M's European operations the following year, guaranteeing it rights in those countries. VC-formed iNova Pharmaceuticals gained Asian, Pacific, and South African rights two year ago.
Grifols SA
Pharmalink AB
Spanish plasma company Grifols SA has acquired intellectual property--documents, know-how, trial data, and regulatory approvals in Sweden--related to spec pharma Pharmalink AB's Xepol treatment for post-polio syndrome (PPS). (May)
In addition, Grifols receives exclusive rights to US, European, and Japanese patents for the PPS treatment, which uses its own intravenous human immunoglobulin. As the name implies, PPS is a lifelong and debilitating condition that afflicts about 25-50% of polio survivors several years after they suffer from the initial infection. It has an effect on the inflammatory process in the central nervous system and can cause muscle and joint weakness, fatigue, and pain. There are currently no approved drugs for the condition. Pharmalink's human immunoglobulin treatment has received orphan drug status from the FDA. In clinical trials performed with help from the Karolinska Institutet, immunoglobulin was able to reduce pain and improve the quality of life in PPS patients by down-regulating the inflammatory process in the CNS.
Grupo Ferrer Internacional
Companhia Portuguesa Higiene Pharma SA
Stellar Pharmaceuticals Inc.
Companhia Portuguesa Higiene Pharma SA (CPH; a division of Grupo Ferrer Internacional SA) has signed an exclusive agreement to market in Portugal Tribute Pharmaceuticals Canada Inc.'s Uracyst (2% sodium chondrotin sulfate solution) for interstitial cystitis/painful bladder syndrome. (May)
CPH will provide an up-front license fee and pay a set transfer price for an initial five years. The agreement may be renewed for another three-year term. Uracyst has already been granted the CE Mark, so the drug will be launched in the upcoming months. Medac has signed on to sell the product in Germany and Austria. CPH was formed in 1891 and was acquired by the Ferrer Group two years ago. It focuses on OTC neurology, cardiovascular, cancer, and urology products.
Johnson & Johnson
Janssen Pharmaceutica NV
Ortho-McNeil-Janssen Pharmaceuticals Inc.
Orexo AB
Orexo (working on therapeutics for pain and inflammatory conditions) has licensed Johnson & Johnson's Ortho-McNeil Janssen Pharmaceuticals Inc. and Janssen Pharmaceutica NV (collectively OMJ) global rights to its OX-CLI and OX-ESI preclinical programs for asthma, COPD, and other inflammatory diseases. OMJ will also add a third internal drug candidate to the three-year-deal. (June)
Orexo gets $21.5mm in research funding ($10mm up front), and up to $564mm in development milestones (if all three program are successful for multiple indications), plus sales milestones and royalties. Orexo--which gets a co-promotion option for Nordic and Baltic countries--will handle the programs through drug selection, after that OMJ will be in charge of clinical and marketing activities and cover all expenses. Both of the in-licensed programs focus on enzymes that break down arachidonic acid (one cause of inflammation). OX-CLI targets leukotriene C4 synthase (for asthma and COPD) while OX-ESI targets the enzyme 15-lipoxygenase (to treat asthma from the area of inflammation). Orexo says the first drug from the alliance should reach the market by 2018. The same day it announced the alliance with Orexo, J&J also acquired RespiVert Ltd., a company focused on the development of small-molecule inhaled therapeutics for respiratory diseases. Although not known for pulmonary products--the market is dominated by GlaxoSmithKline ( Advair), Merck ( Singulair), Novartis ( Foradil and Xolair), AstraZeneca ( Symbicort), and Boehringer ( Spiriva)--J&J is trying to compete in a fast-growing area. It is working on Phase II Simponi and Stelara for sarcoidosis, and Phase II CNTO888 for idiopathic pulmonary fibrosis.
Johnson & Johnson
Ortho-McNeil-Janssen Pharmaceuticals Inc.
Metabolex Inc.
Johnson & Johnson's Ortho-McNeil-Janssen Pharmaceuticals Inc. has licensed exclusive global rights to develop, manufacture, and market several of CymaBay Therapeutics Inc.'s (metabolic therapeutics) preclinical programs for Type II diabetes and other disorders. (June)
Metabolex gets an undisclosed up-front payment and could receive development, regulatory, and commercialization milestones of up to $330mm, plus royalties. This deal, along with one signed the same day with Diamyd for Type I diabetes, marks a major expansion for J&J. Up until this point the company has mainly focused on devices for monitoring blood glucose in diabetics; it will now broaden its work on drugs to treat the disease. This is the second Type II diabetes deal for J&J and Metabolex; the first, which was signed in 2006, granted J&J access to the now-Phase II PPAR-gamma modulators metaglidasen and MBX2044. Both alliances present a great opportunity for J&J since the US market for Type I and II diabetes is on the rise (with about 100 million patients in that country alone), and diabetes-related expenses are estimated at $200bn annually.
Eli Lilly & Co.
Marcadia Biotech Inc.
Marcadia Biotech Inc. (developing therapeutics for obesity and diabetes) has licensed Eli Lilly & Co. exclusive global marketing rights to its preclinical short-acting glucagon analog MAR531 and backup compounds for hypoglycemia. (June)
Marcadia will handle development through US regulatory approval, and Lilly is responsible for obtaining regulatory approval in ex-US countries and will commercialize the products worldwide. Existing glucagon therapeutics for hypoglycemia must be reconstituted from a powder prior to being administered via injection. Marcadia's glucagon therapy, however, would be stored in solution form at room temperature and delivered via a single-use injector pen. Marcadia licensed the IP related to its glucagon analog program from Indiana University in late 2006. Marcadia chose to partner with Lilly because of the Big Pharma's expertise in diabetes and glucagon therapies, which include Byetta and Humalog.
medac GMBH
Stellar Pharmaceuticals Inc.
medac GMBH (urology and oncology therapeutics) has licensed exclusive rights to sell in Germany and Austria Tribute Pharmaceuticals Canada Inc.'s Uracyst/ Uropol (2% sodium chondrotin sulfate solution) for interstitial cystitis/painful bladder syndrome (IC/PBS). (May)
Medac will provide an up-front license fee and has agreed to pay a set transfer price; the agreement is for an initial five years, with the option to extend it for two-year periods. The drug is sold as Uracyst in Canada, but branded as Uropol in Germany. Since it has already received the CE Mark, medac plans to launch the drug in the third quarter of this year. Stellar officials say Germany is the single-largest pharmaceutical market in Europe and teaming with medac will more quickly bring the product to the German community suffering from IC/PBS.
Metabolex Inc.
Sanofi-Aventis
CymaBay Therapeutics Inc. (therapies for metabolic diseases) has granted Sanofi exclusive worldwide rights to its MBX2982, a G-protein coupled receptor 119 (GPR119) agonist that is in Phase IIa trials for Type II diabetes. (June)
The deal could be worth up to $375mm for Metabolex, a figure that includes an up-front payment; development, regulatory, and sales milestones. It is also entitled to royalties. Sanofi is in charge of all further development, manufacturing, and commercialization activities for the licensed candidate and any related compounds. MBX2982 is an oral therapy designed to both increase insulin secretion in the pancreas and stimulate the release of the incretin GLP-1 from the intestines. Both actions together have shown the ability to reduce glucose levels in patients with Type II diabetes, and could also help with weight loss. For Metabolex, the deal comes just a few days after the company announced a potential $330mm deal with Ortho-McNeil in which the J&J division licensed rights to some of Metabolex's preclinical Type II diabetes projects. Taking over development of MBX2982 marks the third diabetes deal that Sanofi has signed since the beginning of 2010. In April, it committed up to $335mm for rights to CureDM's preclinical Pancreate, and a month before that, the Big Pharma signed a diabetes monitoring deal with AgaMatrix.
MorphoSys AG
Xencor Inc.
Xencor Inc. (antibody engineering) has granted MorphoSys AG exclusive worldwide rights to its XmAb5574, a Phase I monoclonal antibody for B-cell malignancies. (June)
Xencor gets $13mm up front and could receive additional development, regulatory, and sales milestones plus tiered royalties. MorphoSys renamed the compound MOR208, and will work with Xencor to complete Phase I trials that are in progress for patients in the US with chronic lymphocyctic leukemia. MorphoSys will then take over all responsibility. MOR208 targets CD19, which is expressed more broadly in B-cell development than CD20, the target of Genentech/Biogen Idec's Rituxan. The candidate showed positive preclinical results at depleting B cells and has strong anti-tumor potency and apoptotic properties. Xencor discovered MOR208 using its XmAb Fc domain and antibody engineering technology. The deal marks MorphoSys' first in-licensing of a clinical compound. Its pipeline includes discovery- and preclinical-stage candidates for inflammation and cancer, as well as a Phase I/II project for rheumatoid arthritis.
Nichi-Iko Pharmaceutical Co. Ltd.
Sanofi-Aventis
Sanofi-Aventis KK
Sanofi-Aventis Nichi-Iko KK
Sanofi KK and Japanese drug manufacturer Nichi-Iko Pharmaceutical Co. Ltd. have decided to form a new joint venture, Sanofi-Aventis Nichi-Iko KK, to carry out generics marketing in Japan. (May)
The JV will be 51% owned by Sanofi and 49% by Nichi-Iko. In connection with the deal, Sanofi paid €39.6mm for a 4.66% stake in Nichi-Iko. The Big Pharma purchased 1.5mm shares at €25.99 each and is now Nichi's second largest shareholder behind Hokuriku Bank. The first objective for the JV is to take over the marketing of Sanofi's Amoban (zopiclone), an anti-insomnia drug that brought in about €43mm in Japanese sales in 2009. Other drugs will be added to the JV's portfolio later. Overall, the deal will take advantage of both companies' expertise in generics sales and production, but it also gets Sanofi's foot more firmly into the door of the Japanese market during a critical time. To reduce its country's health care spending, the Japanese government is now strongly encouraging the use of generics over branded drugs, aiming to have generics responsible for 30% of the prescription sales in that country by 2012 (as opposed to the current 8%).
Norgine BV
Tranzyme Pharma Inc.
Drug discovery firm Tranzyme Inc. has licensed specialty pharmaco Norgine BV exclusive rights to develop and commercialize its ghrelin receptor agonist ulimorelin (TZP101) in Europe, Australia, New Zealand, the Middle East, South Africa, and North Africa. (June)
Norgine will make an undisclosed equity investment in Tranzyme and pay $8mm up front, up to $150mm in development, regulatory, and commercialization milestones, and escalating double-digit sales royalties. The two companies will jointly fund future ulimorelin development. The compound is expected to enter Phase III trials for dysmotility conditions in acute care settings during the second half of this year. Potential applications include gastroparesis and postoperative ileus. Trazyme developed the gastroprokinetic agent ulimorelin using its MATCH (MAcrocyclic Template CHemistry) technology, which enables the predictable and efficient construction of synthetic libraries of drug-like, orally administered macrocyclic compounds that are highly potent and selective. The agreement allows Tranzyme to capitalize on Norgine's expertise in certain territories, while retaining rights to the compound in key markets of North America and Asia.
Novartis AG
Novartis Vaccines
Talecris Biotherapeutics Inc.
Novartis Vaccines and Talecris Biotherapeutics Inc. (critical care products; in the process of being acquired by Grifols SA) have agreed to co-promote each other's rabies vaccines. (June)
Novartis will sell Talecris' HyperRAB S/D (rabies immune globulin (human)), which is administered in combination with rabies vaccines for patients that were exposed to the virus. Talecris will market Novatis' RabAvert, which is given pre- and post-exposure to rabies. Talecris gained HyperRAB when it purchased the plasma business from Bayer Healthcare in 2004. The vaccine was approved by the FDA in 1974 and in Canada in 2005. Gained through Novartis AG's acquisition of Chiron, RabAvert was first approved in Germany in 1984 and is now sold in over 70 countries, including Australia (CSL) and in Canada (Merck). RabAvert is Novartis' sole rabies vaccine; its other products include prophylaxes for influenza, meningitis, and travel diseases. Rabies has the highest fatality rate of any infectious disease and is almost 100% fatal once clinical symptoms appear. It damages the central nervous system, which distresses the brain and results in up to 70,000 deaths annually.
QLT Inc.
Valocor Therapeutics Inc.
Valocor Therapeutics Inc. has licensed exclusive rights to several dermatology programs from QLT Inc., the company from which it recently spun off. (May)
Valocor has gained access to lemuteporfin--the moderate-to-severe acne drug candidate that is set to enter Phase I/II and is designed to be a safer alternative to Roche's Accutane--plus three preclinical programs: VAL001 (for acne and sebaceous gland hyperactivity), VAL002 (chronic inflammatory skin disease), and VAL003 (vitiligo). Valocor used recently obtained seed money to fund the deal and anticipates closing an $8mm Series A round by year's end.
Recordati Industria Chimica & Farmaceutica SPA
Zambon Group SPA
Zambon France SA
Zambon France SA (pain, respiratory, and urology therapeutics) has received co-promotion rights in France to Recordati Industria Chimica & Farmaceutica SPA's Silodyx (silodosin) for benign prostatic hyperplasia. (May)
Approved by the EMA this past January, Silodyx is an A1A adrenergic receptor antagonist; blocking the A1A receptor can increase urinary flow and minimize other BPH symptoms. Kissei originally developed silodosin and now sells it as Urief in Japan, where it has gained over a quarter of the market since its mid-2006 launch. Watson currently sells it as Rapaflo in North America. Recordati received European, Middle Eastern, and African rights to the drug in 2004 and plans to market it as Urorec in several of its licensed territories. Zambon France already has experience selling the urology therapeutics Monuril, an antibiotic for acute cystitis, and Monurelle, taken for urinary tract discomfort.
Regulus Therapeutics Inc.
Sanofi-Aventis
Regulus Therapeutics Inc. (microRNA-based drug discovery) and Sanofi have entered into a multi-target development deal that could bring Regulus over $750mm. (June)
Regulus has granted Sanofi exclusive worldwide rights to discover, develop, and sell four microRNA therapies, including Regulus's lead fibrosis program that targets microRNA-21. Sanofi paid $25mm up front and will make a $10mm minority equity investment once the companies agree on valuation figures. It will also provide research funding for three years (with the option to extend for two years) as well as milestones. The exact amount of the milestones was not disclosed, but is broken up roughly in thirds for preclinical, clinical, and sales achievements. For each program in the deal, Sanofi will pay all costs as well as royalties. In addition to the main licenses, Regulus has also given Sanofi a three-year option to enter into a broader technology license involving other platform and product rights. If exercised, Regulus gets another $50mm plus milestones and royalties for any product developed with the optioned technology. Regulus, which was formed in 2007 as a 50/50 joint venture by Alnylam Pharmaceuticals and Isis Pharmaceuticals, is obligated to pay its founders 7.5% of the up-front and all milestones from Sanofi. The company has discovered that modulating microRNA regulates disease pathways and can be an effective treatment for cancer, cardiovascular, and metabolic diseases, along with fibrosis. Its deal with Sanofi is the largest to date in the microRNA field; in 2008, Regulus entered a similar collaboration with GSK for immunology and inflammation. The price-tag there could total $600mm.
Sanofi-Aventis
Sanofi Pasteur
Vivalis
Valneva SE (cell-based protein therapies and vaccines) has granted Sanofi Pasteur exclusive rights to the Humalex monoclonal antibody production platform to discovery new infectious disease drugs. (June)
Vivalis received €3mm ($3.58mm) up front and could get an additional €35mm in development milestones per indication, plus sales royalties. Humalex separates fully human monoclonal antibodies from human B lymphocytes that have been isolated from donor cells of specific diseases. It has shown clinical efficacy in producing antibodies against both viral and bacterial pathogens, and could have implications in autoimmune conditions as well. Vivalis took on the platform when it bought French biotech Humalys SAS for €15mm back in January. Under the current deal, Vivalis will perform preclinical and toxicity testing, financed in part by Sanofi, and then turn over targets to Sanofi for further development. Sanofi comes out of the deal with exclusive worldwide development and commercialization rights to any resulting antibodies. This is the third time Sanofi Pasteur and Vivalis have partnered. Their relationship goes back to 2003, when the two used Vivalis's cell lines and viral vector technology for HIV and cancer vaccine research, and again in 2007 when Sanofi got rights to Vivalis's EBx embryonic stem cell lines for MAb production.
Teva Pharmaceutical Industries Ltd.
Teva Women's Health Inc.
Watson Pharmaceuticals Inc.
Teva Women's Health Inc. and Allergan PLC have settled litigation pertaining to Teva's Seasonale (levonorgestrel/ethinyl estradiol) extended-cycle oral contraceptive tablets. (May)
Teva filed suit in December 2007 stating Watson's Quasense had infringed upon its patent. Teva has now granted a fully paid-up license to the patents enabling Watson to continue selling Quasense. Seasonale was approved by the FDA in 2003, and Quasense was approved three years later.
Financings
AEterna Zentaris Inc.
AEterna Zentaris Inc. (mainly develops therapies for cancer and endocrinology disorders) netted $11.5mm through the registered direct offering of 8.8mm common shares at $1.37 each (a 7% discount) to institutional investors. The company also issued five-year warrants to purchase 4.4mm common shares exercisable at the same price. Rodman & Renshaw was the placement agent. (June)
Investment Banks/Advisors: Rodman & Renshaw Capital Group Inc.
Anadys Pharmaceuticals Inc.
Hepatitis C-focused Anadys Pharmaceuticals Inc. has netted $11.7mm through the registered direct offering of 5.8mm common shares at $2.15 per share (an 11% discount) to institutional investors. Lazard Capital Markets (lead) and Piper Jaffray & Co. were the placement agents. (May)
Investment Banks/Advisors: Piper Jaffray & Co.; Lazard LLC
Arena Pharmaceuticals Inc.
Arena Pharmaceuticals Inc. (drugs that target G protein-coupled receptors) has grossed $35.5mm through the registered direct offering of 11mm common shares at $3.23 (an 8% premium) to six funds associated with Deerfield Management. The money will be used to obtain FDA approval for lorcaserin, which has completed Phase III for weight management. (June)
BioSante Pharmaceuticals Inc.
BioSante Pharmaceuticals Inc. (therapies for female sexual health and cancer) netted $14.25mm through the registered direct offering of 7.1mm common shares at $2.10 each (a 7% premium) to institutional investors including Deerfield Management. The company also issued five-year warrants to purchase 3.6mm shares exercisable at $2.45. Rodman & Renshaw was the placement agent. (June)
Investment Banks/Advisors: Oppenheimer & Co. Inc.; Trout Group LLC; JMP Securities LLC; Rodman & Renshaw Capital Group Inc.
Corcept Therapeutics Inc.
Corcept Therapeutics Inc. (developing treatments for metabolic and neurological disorders) netted $14.1mm through the follow-on public offering of 5mm common shares at $3 each. (June)
Investment Banks/Advisors: Thomas Weisel Partners LLC
Hana Biosciences Inc.
Talon Therapeutics Inc. (cancer) sold $40mm of its Series A-1 convertible preferred stock to new investor Warburg Pincus (lead) and returning backer Deerfield Management, Hana's largest shareholder. Under terms of an investment agreement entered into by all three parties, the investors have the right to purchase up to another $60mm in preferred stock--$20mm any time before Hana receives FDA approval for any of its compounds and $40mm within four months of the company obtaining such approval. The stock converts to common at $0.18 per share for the initial $40mm and subsequent $20mm sales, and at $0.28 for the remaining $40mm. (Hana's shares averaged $0.22 at the time of the initial closing.) (June)
Investment Banks/Advisors: Roth Capital Partners
Ikaria Holdings Inc.
Ikaria Inc. (developing therapeutics for cardiovascular, renal, and respiratory conditions) has filed for its initial public offering. (May)
The company was formed in 2005 and merged two years later with INO Therapeutics. It markets Inomax, a form of nitric oxide for hypoxic respiratory failure linked to pulmonary hypertension in infants, which earned the company $13mm from $274mm in 2009 revenues. Ikaria spent $75mm on R&D last year, and is continuing Phase III studies of Inomax for additional indications, including the prevention of bronchopulmonary dysplasia and acute respiratory distress syndrome. It is also working on Lucassin for hepatorenal syndrome Type I (Phase III to begin later this year; the drug was in-licensed from Orphan Therapeutics), IK5001 for cardiac remodeling and CHF post-acute myocardial infarction (Phase II/III; licensed from BioLineRx), and IK6001 for vascular leakage (preclinical; in-licensed from Fibrex Medical). IK1001 is another compound--in-licensed from the Fred Hutchinson Cancer Research Center in 2005--that has received a substantial amount of attention. IK1001 is a form of hydrogen sulfide that is designed to slow down an injured patient's metabolism by putting the body in a hibernation-like state in order to give physicians an opportunity to save tissue cut off from a steady supply of blood. It has completed three Phase I trials for tissue damage post-myocardial infarction. While completing an IPO would be beneficial, Ikaria's executives will receive a nice financial boost, whether the financing occurs or not. According to Ikaria's S-1, a $130mm dividend has been authorized by its shareholders (New Mountain Investments owns 51% of the company) to be distributed amongst 12 executives and directors, paid from a new $250mm loan. Investment Banks/Advisors: Goldman Sachs & Co.; Morgan Stanley & Co.; Cowen & Co. LLC; Wedbush Morgan Securities; Lazard LLC; Credit Suisse Group
La Jolla Pharmaceutical Co.
Auto-immune and inflammatory disease therapeutics developer La Jolla Pharmaceutical Co. has raised $6mm through the sale of 29mm common shares at $0.03 (a 50% discount) and 5k shares of convertible preferred stock at $1k. Backers, who include institutional investors and company officers, will also receive a three-year warrant to purchase an additional 10k shares of 15% convertible preferred stock for an aggregate $10.3mm. Each share of convertible stock is redeemable at the conversion rate of 66,667 shares of common for each preferred share. (May)
Neuralstem Inc.
CNS-focused Neuralstem Inc. netted $9.3mm through the registered direct offering of 3.57mm units priced at $2.80 each (a 14% discount) to institutional investors. Each unit consists of one common share and ¾ of a common stock purchase warrant. The three-year warrants are exercisable at $3.25. Noble Financial Capital Markets was the placement agent. (June)
Investment Banks/Advisors: Noble Financial Group
Pharmacyclics Inc.
Pharmacyclics Inc. (treatments for cancer and immune-related diseases) netted $50.9mm through the registered direct offering of 8mm common shares at $6.51 each (a slight premium). The company had originally hoped to sell 6.15mm shares. Institutional investors participated, along with Pharmacyclics' CEO who bought 1.075mm shares (about $7mm). (June)
Investment Banks/Advisors: Leerink Swann & Co.
Salix Pharmaceuticals Ltd.
Salix Pharmaceuticals Ltd. (developing prescription drugs for gastrointestinal disorders) has netted $291mm through the public offering of 2.75% five-year senior notes, convertible at $46.38 per common share (a 27% premium). (May)
Investment Banks/Advisors: Jefferies & Co. Inc.; BMO Financial Group; JMP Securities LLC; Merrill Lynch Pierce Fenner & Smith Inc.; Caris & Co.
Ziopharm Oncology Inc.
Ziopharm Oncology Inc. (treatments for hematologic and solid cancers) netted $32.9mm through the follow-on public offering of 7mm common shares at $5 each. (May)
Investment Banks/Advisors: JMP Securities LLC; Jefferies & Co. Inc.
Medical Devices
Acquisitions
Covidien Ltd.
Covidien Ltd. has sold off its sleep therapy product lines including continuous airway pressure (CPAP) and bi-level devices to PH Invest, a private company in Luxembourg. (June)
PH will acquire Covidien's GoodKnight and Sandman diagnostic systems and CPAP devices, a manufacturing facility in Nancy, France, and European commercial operations. The Adam, Breeze, and Dreamfit sleep interface products are not included in the transaction and will continue to be sold by Covidien. This sell-off was the one of three deals Covidien announced in a day in its efforts to hone its focus on what it says are more profitable businesses--vascular and neurovascular diseases. Covidien divested its radiopharmacies to Triad Isotopes and bought peripheral and neurovascular company ev3 for $2.6bn. Just days before that Covidien also sold its specialty chemicals business to an affiliate of New Mountain Capital for $280mm.
Covidien Ltd.
ev3 Inc.
Covidien Ltd. has agreed to buy cardiovascular/neurology device company ev3 Inc. for $2.6bn. Shareholders will receive $22.50 in cash per share (a 21% premium). (June)
Formed in 2000, ev3 achieved 2009 sales of $449mm (netting $41.2mm in earnings) and had $98mm in cash on hand at the end of last year. The company's products include the Silver Hawk plaque excision system (gained through its 2007 acquisition of FoxHollow); Protégé stents; NanoCross, PowerCross, and EverCross balloon catheters; SpiderFX embolic protection device; Rinspirator thrombus removal system (also from FoxHollow); and Helix Clot Buster mechanical thrombus device. It also markets Onyx liquid embolics, embolization coils, flow diversion, and thrombectomy catheters. Ev3 completed its most recent acquisition last year by purchasing neurointerventional surgery device company Chestnut Medical Technologies. Ev3 will become part of Covidien's vascular products line in its medical devices business segment. On the same day it announced the purchase of ev3 to strengthen its position in the peripheral vascular and neurovascular markets, Covidien sold its sleep therapy device product line and its radiopharmacies to two different companies. The decisions were made to help streamline its product portfolio and free up resources for its more profitable businesses.
Covidien Ltd.
Somanetics Corp.
In its third acquisition this year, Covidien Ltd. is acquiring all the outstanding common shares of Somanetics Corp. (cerebral and somatic oximetry devices) for $25 each--a 39% premium--valuing the transaction at $299mm. (June)
Somanetics has developed the Invos (in-vivo optical spectroscopy) noninvasive cerebral/somatic oximeter, which can continuously monitor a patient's blood oxygen level in the brain as well as in the body of those at risk for restricted blood flow. It is currently the only available product of its type that provides improved patient outcome following surgery. Through previous agreements, Covidien markets Invos in Europe, Canada, the Middle East, and South Africa, while Edwards Lifesciences sells the product in Japan. Somanetics also offers Vital Sync, which takes data from bedside devices and integrates and stores the information into a single system for efficient patient assessment. On top of adding to its existing portfolio of patient monitoring devices, the acquisition gives Covidien products to expand its presence in the operating room. In 2009, Somanetics achieved earnings of $6.8mm on $50mm in sales, and had $79.7mm in cash and cash equivalents at the end of that year. The company will become part of the oximetry and monitoring unit of Covidien's medical device division. Covidien has been busy signing deals this year. In March it purchased Orthofix International NV's vascular business unit for about $19mm, and earlier this month it agreed to buy cardiovascular/neurology device company ev3 Inc. for $2.6bn. In addition, Covidien recently sold off its sleep therapy product lines to a private Luxembourg firm. These transactions are part of the company's strategy to capitalize on high-growth areas and gain a competitive advantage in the marketplace.
Elekta AB
Resonant Medical Inc.
Elekta AB (radiation and radiosurgery for cancer and brain diseases) will pay $Cdn30mm ($28mm) in cash to acquire privately held image guidance and ultrasound company Resonant Medical Inc. (RMI). (May)
RMI was spun out of McGill University in 2000 and has raised over $Cdn24mm in at least two venture financing rounds from investors including MDS, BDC Venture Capital, Desjardins Venture Capital, Ventures West, MMV, and MSBi. The company developed and markets the Clarity image guidance technology used by radiologists to visualize soft tissues with 3D ultrasound. The system allows for the specific localization of breast, prostate, liver, cervix, uterus, bladder, and head and neck cancers and helps direct radiation without having to use additional x-rays or surgical markers. Clarity is used in the US, Canada, Italy, the Netherlands, and Ireland. Elekta looks forward to adding Clarity and RMI's Mutual Referencing technology to its Mosaiq treatment planning software suite that compiles information for the diagnosis, planning, and management of radiation oncology care.
Orthopaedic Synergy Inc.
Praxim SA
Orthopaedic Synergy Inc. has acquired fellow private joint replacement company Praxim SA for an undisclosed amount. (June)
Praxim, which is headquartered in France, develops automated systems, software, and instruments for less invasive and more cost-effective total joint arthroplasty procedures. Its products include the i-Block surgical robot, Nano-station computerized surgical navigation system, and Nano-block instruments for computer-assisted surgeries. Praxim's offerings are designed to eliminate the risk for misalignment and improper sizing of joint replacements that can occur with traditional methods. The acquisition enables Orthopaedic Synergy to expand its portfolio of implants and instruments, reduce product development cycles, and increase sales. Praxim will become a division of Orthopaedic Synergy, whose other units include OMNI life science (orthopedic implants) and Enztec (instrument designer). The parent firm says it will continue to pursue other strategic acquisitions.
St. Jude Medical Inc.
Goodman Co. Ltd.
LightLab Imaging Inc.
St. Jude Medical Inc. has agreed to acquire LightLab Imaging Inc. (diagnostic coronary imaging) from Goodman Co. Ltd. for about $90mm in cash. (May)
Founded in 1998 with IP from entities including MIT, LightLab has developed optical coherence tomography (OCT), which offers high resolution imaging of the heart to assist in the detection of cardiovascular disease. OCT provides image resolution that is ten times more precise and captures images twenty times faster than intravascular ultrasound imaging systems (IVUS). Although it already has products approved in 40 countries, it was only just this month that LightLab gained FDA clearance to sell its first product--the C7-XR imaging system and companion C7 Dragonfly imaging catheter. The catheter is inserted into the vessel enabling clinicians to see and measure characteristics that would not be readily visible with older imaging systems and eliminates the need for temporary vessel occlusion that was mandatory with older OCT devices. St. Jude says the acquisition will be accreditive immediately, with an estimated $20mm in revenues to be added to its cardiovascular business during the last six months of this year. St. Jude will now be the only company to offer both OCT and fractional flow reserve (FFR) technologies that were gained through the 2008 acquisition of Radi Medical Systems and are marketed as PressureWire Certus and Aeris wireless systems. (The latter technology measures pressure differences to determine the severity of narrowings in the coronary arteries.) The OCT market is expected to grow at a double-digit compounded yearly rate over the next half decade, capturing the IVUS market share and broadening the general heart imaging market as well. Investment Banks/Advisors: Bank of America (St. Jude Medical Inc.); Brown Brothers Harriman & Co. (LightLab Imaging Inc.)
Alliances
Accuray Inc.
Siemens AG
Siemens Healthcare
Radiosurgery company Accuray Inc. and Siemens Healthcare will co-promote Accuray's CyberKnife robotic surgery system worldwide for an initial period of five years. (June)
CyberKnife noninvasively treats tumors anywhere in the body by delivering high doses of radiation with extreme accuracy and precision. Siemens will now be able to sell the system alongside its own radiation oncology products, which include the Artiste, Oncor, and Primus linear accelerators. Siemens will also purchase certain elements of Accuray's technology to incorporate directly into its products. Through an R&D component to the deal, Accuray gets the chance to expand its offerings as the companies have agreed to explore synergies between each other's skills and technical offerings for future product development.
Arthrex Inc.
Kensey Nash Corp.
Regenerative medicine firm Kensey Nash Corp. will use its Optrix extracellular matrix (ECM) technology to develop porcine dermis-derived surgical meshes, which sports medicine company Arthrex Inc. will market and distribute for use in tendon repair procedures and small joint surgeries. (June)
Kensey Nash's Optrix technology can disinfect pig dermis tissue, eliminate viruses, and remove cells, leaving behind functional biomaterials. As the matrix breaks down, it releases other biomolecules that continue the healing process. Kensey Nash will manufacture the materials for Arthrex. ECM products have applications in various surgical procedures including soft tissue and abdominal repairs. Kensey Nash signed a similar agreement with Synthes in August 2009. The current deal comes just one day after Kensey Nash signed a two-year agreement in which it becomes the exclusive supplier of St. Jude Medical's collagen plugs.
BioControl Medical Ltd.
Medtronic Inc.
Medtronic PLC has made a $70mm equity investment in BioControl Medical Ltd., a private company developing the CardioFit implantable nerve stimulation device for cardiovascular use. (May)
Medtronic also has the option to acquire the company for $550mm if BioControl gets FDA approval for CardioFit. If it does not complete clinical studies or get FDA approval, Medtronic will only pay $350mm for the company. BioControl was formed in 1999 and counts Pitango Venture Capital, GlenRock Israel, Vitalife Life Sciences, Eucalyptus Ventures, Biomedical Investments, and HBM BioVentures as current shareholders. The company divested its urology product line (including the miniature device for urinary incontinence and interstitial cystitis) in 2006 to American Medical Systems for $50mm. Since then BioControl has focused its resources on CardioFit, which increases parasympathetic nerve system tone in heart failure patients by electrically stimulating the vagus nerve. The device received the CE Mark in late 2008, but the company says it may have another three years to go before getting the FDA's okay. (Medtronic's funds will be applied to those US trials.) This is Medtronic's second big move in the Israeli market; the first was its $325mm acquisition of fellow cardiovascular device company Ventor Technologies last year.
Hologic Inc.
IsoRay Inc.
Hologic Inc. (women's health) has granted brachytherapy company IsoRay Inc. exclusive rights to sell its GliaSite radiation therapy system worldwide. (June)
GliaSite is the only device approved by the FDA to deliver liquid radiation to the brain via a balloon catheter. Brain tumors cannot always be completely removed due to the complexity of the organ and the possibility of causing damage. Following surgery, doctors typically administer chemotherapy and/or radiation to catch missed cells, but even in those cases, brain cancer spreads so quickly that the methods do not always work. Brachytherapy using GliaSite allows for the delivery of a high dose of radiation, in a novel liquid form, directly to the tumor site, reducing the chance that a tumor will recur while at the same time sparing surrounding healthy tissue. IsoRay markets Celsium-131-containing brachytherapy seeds for prostate, lung, and ocular cancers. It is also awaiting approval for a new liquid form of Celsium-131, which will be delivered using the GliaSite device.