Deals Shaping The Medical Industry, July/August 2014

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, and Pharmaceuticals – and then categorized by type – Acquisition, Alliance, or Financing. This month’s column covers deals announced May and June 2014.

IN VITRO DIAGNOSTICS

Mergers & Acquisitions

Immucor Inc.

Organ-I Inc.

Immucor Inc. acquired fellow privately held transplant diagnostics company Organ-I Inc. (Jun.)

Organ-I spun out of Stanford University in 2009 by founder Minnie Sarwal, MD, PhD, who now joins Immucor as a scientific advisor. Dr. Sarwal developed Organi-I’s first product, the kidney Solid Organ Rejection Test (k-SORT). The k-SORT assay analyzes the gene expression profile of RNA isolated from peripheral blood leukocytes of kidney transplant patients. The blood test can predict acute transplant rejection four months before clinical rejection signs appear, and is intended as a noninvasive diagnostic and monitoring tool for renal transplant patients at high risk for cellular or hemoral acute rejection. Immucor says the acquisition of Organi-I and k-SORT is highly complementary to the Lifecodes business Immucor bought from Hologic Corp. in January 2013. Immucor paid $85mm (plus earn-outs) for the human leukocyte antigen (HLA) testing and tissue typing assets, which are key for transplant donor/recipient matching.

Alliances

AbbVie Inc.

OraSure Technologies Inc.

OraSure Technologies Inc. (point-of-care diagnostics and collection devices) licensed Abbott’s 2013 spin-off AbbVie Inc. rights to co-promote the OraQuick rapid hepatitis C antibody test in the US and exclusive rights to promote the product in certain markets. (Jun.)

OraSure will receive up to $75mm in exclusivity payments during the agreement, which extends until the end of 2019. AbbVie is also responsible for sales-based milestones and other payments--from $3.5mm to $55.5mm annually--over the deal term. (Strategic Transactions will assume $17.5mm based on the low-end of $3.5mm at five years until the conclusion of the agreement.) OraSure will manufacture and sell the product directly in all markets. OraQuick is the only FDA-approved POC test to detect HCV infection in at-risk individuals, providing a diagnosis in just 20 minutes using a blood sample taken from a finger stick or venipuncture. Under a mid-2002 deal, Abbott became the exclusive US co-promoter for the OraQuick test for HIV-1.

Celgene Corp.

NanoString Technologies Inc.

NanoString Technologies Inc. (molecular diagnostics) will develop a companion test for use in the continued clinical development of Celgene Corp.’s Revlimid (lenalidomide), which is marketed for multiple myeloma, but entering pivotal trials for diffuse large B-cell lymphoma (DLBCL). (Jun.)

Celgene paid $5.75mm up front, and will hand over additional payments of $17mm for development and regulatory milestones, and up to $22.25mm for sales milestones. NanoString plans to develop an assay using its nCounter multi-gene analysis platform, and will handle regulatory approval and commercialization. The digital color-coded barcode system allows for the simultaneous multiplexed expression analysis of hundreds of genes with high precision and sensitivity. The test will be used to screen Revlimid trial patients for subtypes of DLBCL; subtypes of the disease could react differently to treatment methods, and the partners' goal is to have a way to stratify patients based on their specific disease type. NanoString retains rights to independently work on the assay it develops for other indications. Revlimid is Celgene’s flagship product; the drug was first launched for myelodysplastic syndrome in 2005 (the multiple myeloma indication was added in 2006), and brought in $4.3bn in sales in 2013. In addition to DLBCL, the drug is also in trials for peripheral T-cell lymphoma (Phase II), acute myelogenous leukemia (Phase II), and chronic lymphocytic leukemia (Phase III).

Ferring Pharmaceuticals AS

Roche

Roche Diagnostics Corp.

Roche Professional Diagnostics

Roche Professional Diagnostics agreed to develop and sell globally its Elecsys anti-Müllerian hormone (AMH) assay as a companion diagnostic to Ferring Pharmaceuticals AS’ (uro-gyn, GI, endocrine, and orthopedic products) Phase III FE999049 (human cell line-derived recombinant follicle-stimulating hormone (human rFSH); a type of gonadotrophin) for infertility. (Jun.)

Roche will collaborate on Ferring’s ongoing Phase III program for FE999049, and is responsible for qualifying, validating, documenting, and filing for approval of the test. Elecsys is an automated tool that measures levels of AMH--in serum or lithium heparin plasma--to determine ovarian reserve, which is a key metric for assessing infertility. Results are delivered within 18 minutes. Ovarian reserve represents the number of follicles developing in an ovary. Low AMH levels indicate reduced chance for pregnancy. Elecsys AMH can also stratify patients who would best respond to gonadotrophin treatment, and assist physicians in deciding the appropriate dose of FE999049 to administer. If approved, FE999049 would join Ferring’s reproductive health portfolio, the company’s largest collection of products compared with its other areas of focus. Ferring already markets Bravelle, a highly purified form of human FSH.

Financings

Alere Inc.

BBI Diagnostics Group PLC

BBI Diagnostics Group PLC (diagnostic reagents and immunoassays) filed for its initial public offering on the London Stock Exchange. (May)

Rapid diagnostics company Alere Inc. established BBI in April 2014 with the sole purpose of spinning off the company in an IPO. (Note that BBI has roots with an entity called BBI Group, which dates back to 1986.) Alere plans to divest its 25% equity stake at the time of the IPO to a single third-party, which will pay the IPO price or higher. (Alere expects to apply the proceeds from its sale to pay back existing debt.) At the time the offering prices, Alere will also transfer certain assets to BBI, including its diversified reagent manufacturing business, biothreat detection and health care unit, Axis-Shield’s laboratory immunoassays (part of Alere’s 2011 Axis-Shield acquisition), First Check Diagnostics consumer drugs-of-abuse diagnostics business (which Alere bought in 2007), BioNote animal health diagnostics, and Alere’s 50% stake in SPD Swiss Precision Diagnostics GMBH (a 2006 joint venture between Alere and P&G that markets home pregnancy and fertility tests). Alere has also agreed to loan BBI up to £60mm ($101mm) via a credit facility. BBI operates in two segments, the bigger of which, at £53.7mm in 2013 sales, is diagnostic reagents. The company sells over 1k reagents for immunoassays (primarily lateral flow tests) and clinical chemistry. Since they are considered platform-independent, the reagents may be used in any advanced laboratory instrument. BBI’s immunoassay portfolio covers diagnostics in multiple areas including diabetes, cardiovascular disease, rheumatoid arthritis, sepsis, and vitamin B12 deficiency. In BBI’s other primary business, the company offers applied diagnostics to animal health, biothreat detection, and health care markets. The applied diagnostics unit reported £33.2mm in 2013 revenues. Investment Banks/Advisors: Investec Bank PLC; Jefferies & Co. Inc.; Joh. Berenberg, Gossler & Co. KG (BBI Diagnostics Group PLC)

June 2014 update: Alere withdrew its plans to take BBI public.

CareDx Inc.

CareDx Inc. (recently changed its name from XDx; diagnostics for heart transplant recipients) filed for its initial public offering. (Jun.)

CareDx created the AlloMap noninvasive molecular diagnostic, which uses gene expression patterns in blood cells to identify and monitor heart transplant recipients with stable allograft function who have a low probability of acute cellular rejection. The product was launched in the US in January 2005 and, through partnerships, the company is offering AlloMap in Europe (Diaxonhit) and Canada (LifeLabs). CareDx is also working on additional solutions based on cell-free DNA (cfDNA) technology. The first is a research use only test to identify donor cfDNA in samples from heart transplant recipients. It then plans to extend to other solid organ transplants, initially the kidney. IPO funds will help support R&D for additional applications of AlloMap and expand commercial efforts. Founded in late-1998, the company had filed to go public back in October 2007 but withdrew the offering nearly a year later due to poor market conditions. CareDx is backed by investors including Burrill & Co., Duff Ackerman & Goodrich, Kleiner Perkins Caufield & Byers, TPG, Sprout Capital (managed by New Leaf Venture Partners), Intel Capital, and Integral Capital Partners. For the year ended 2013, it reported $22mm in revenues, and at the end of March 2014 the firm had $4.8mm in cash and equivalents. Investment Banks/Advisors: Leerink Partners LLC; Mizuho Bank Ltd.; Piper Jaffray & Co.; Raymond James & Associates Inc.

DermTech International

DermTech International (noninvasive diagnostics for skin-related conditions) filed for its IPO. (May)

The company, founded in 1996, develops scalable and quantitative PCR-based gene expression tests. Biopsies (specifically, RNA extracts) are collected via an adhesive patch as opposed to more invasive surgical intervention, or visual pattern recognition, which is subject to error. DermTech is advancing a laboratory-developed assay for pigmented skin lesions, including moles, to test for melanoma. Product launch could occur in the second half of 2014. Next-generation versions, which DermTech plans to introduce within the next two-to-three years, would be able to determine the histopathologic stage of the disease (in situ or invasive), and the metastatic potential. The company will pursue other skin cancer diagnostics (for basal cell or squamous cell carcinomas) and in the future may out-license its technology for use in aesthetics and acne. DermTech has an agreement with Biogen Idec to provide assay development and adhesive patch testing as part of the biotech’s pursuit of an inflammatory skin disease treatment. The firm is also working on a mobile photoinformatics app that a physician could use to track, via recorded clinical images and data, a pigmented lesion following biopsy. To date, DermTech has realized revenue via its CLIA testing services and sales of its adhesive skin sample collection kits. The company has raised $15.6mm in venture financing. Investment Banks/Advisors: Feltl & Co.; Maxim Group LLC

Signal Genetics Inc.

Signal Genetics Inc. (molecular diagnostics for cancer) netted $7.9mm through its initial public offering of 850k shares at $10. When the company filed in March, it had hoped to sell 2.3mm shares for $10-12 apiece. (Jun.)

Signal Genetics was formed in January 2010 as Myeloma Health LLC, and changed its name the following year. Its multiple myeloma testing IP is licensed exclusively from the University of Arkansas for Medical Sciences (UAMS), and is the basis for Signal Genetics’ first product, Myeloma Prognostic Risk Signature (MyPRS). MyPRS is a microarray-based gene expression profile that tests for the presence of certain genes that can predict low- or high-level risk of early multiple myeloma relapse. MyPRS is also used to personalize patients’ courses of treatment. UAMS is Signal Genetics’ main customer for MyPRS; the institution uses the diagnostic to determine patient eligibility for multiple myeloma therapies it is developing, and UAMS's business accounted for around 80% of Signal Genetics’ $4.3mm in revenue during 2013. With the IPO proceeds the company hopes to expand indications of MyPRS to include multiple myeloma precursor conditions collectively called asymptomatic monoclonal gammopathies (AMG). The risk of progressing from AMG to full-blown multiple myeloma is between 1-10%, but right now there is no tool available to diagnose the AMG conditions monoclonal gammopathy of undetermined significance (MGUS) or asymptomatic (smoldering) multiple myeloma (AMM). Signal Genetics notes that certain studies have already indicated the potential of MyPRS for these precursors, and that the availability of the product in these indications could increase the market for the test from about 33.5k patients a year (for MM) to more than 130k patients (including testing for AMG). Investment Banks/Advisors: Aegis Capital Corp.

MEDICAL DEVICES

Mergers & Acquisitions

Cantel Medical Corp.

Medivators Inc.

PuriCore PLC

PuriCore International Ltd.

Cantel Medical Corp. (infection prevention and control products) acquired PuriCore International Ltd. (manufacturer of automated endoscope reprocessors) for $26.9mm in cash. (Jun.)

PuriCore International Ltd. is the wholly owned subsidiary of UK based PuriCore PLC. The transaction requires majority shareholder approval and is expected to close at the end of Q2 2014. It will be accretive to Cantel beginning in 2015. With a staff of 120, PuriCore reported 2013 annual sales and pre-tax profit of $23.3mm and $2.1mm, respectively. The company manufactures endoscope reprocessors, endoscope drying and storage cabinets, chemistry/consumables, and provides maintenance and validation services. PuriCore built its endoscopy portfolio via acquisitions of Labcaire Systems and Monmouth Scientific. The launch of its next-generation pass-through automated endoscope reprocessor is expected shortly. The acquisition expands Cantel’s international presence, affording the company a complete infection prevention and control portfolio for GI in the UK and Europe. PuriCore will be integrated into Cantel’s Medivators business and will be reported as part of its endoscopy operating segment.

Medtronic Inc.

Corventis Inc.

Device giant Medtronic PLC bought privately held Corventis Inc., which makes wireless health-monitoring patches. (Jun.)

Medtronic did not disclose how much it shelled out for Corventis but says the deal involves a staged investment in which it funded the development of the Patch noninvasive telemetry device (Corventis is co-developer) and had an option to acquire the company. (Patch is currently sold in India and Medtronic plans to begin marketing in the US and Europe by late-2014.) Nine-year-old Corventis has developed two FDA-approved and CE-marked wearable sensors (patches) for cardiology applications. Its Nuvant mobile cardiac telemetry system offers continuous monitoring of symptomatic and asymptomatic cardiac abnormalities by collecting data--such as ECG and heart rate--when a patient experiences symptoms of arrhythmia, including atrial fibrillation. The PiiX Avivo mobile patient management system continually monitors fluid status of heart failure patients. Data from the devices are transmitted wirelessly to a monitoring center, allowing physicians to identify problematic trends and intervene in a timely fashion. The patch technology is an ideal replacement for implanted monitoring devices, but Medtronic still plans to market Patch alongside its Reveal LINQ cardiac monitor. Corventis is Medtronic’s second acquisition of a monitoring device company in less than a year. In August 2013 it paid $200mm for Cardiocom LLC, which is focused on telehealth and patient services to manage chronic diseases.

Medtronic Inc.

Covidien PLC

In the largest medical device M&A to date, Medtronic PLC acquired publicly traded Irish medical technology and services company Medtronic Minimally Invasive Therapies. Medtronic will pay $94.13 per share ($35.19 in cash and $58.94--0.956 of a Medtronic ordinary share--in stock) for each Covidien outstanding share, valuing the deal at $42.5bn--a 29% premium, and over four times Covidien’s 2013 revenues. Medtronic will also assume approximately $5bn in Covidien debt. Post-acquisition, Covidien shareholders will have about a 30% stake in the combined company. (Jun.)

Up until this transaction, Boston Scientific’s $27bn cash and stock takeover of Guidant in 2006--after winning a hostile bidding war with Johnson & Johnson--was the largest M&A in medical device history. Together, with more than ten product categories that are number-one in each market--including coronary stents, endovascular, neuromodulation, spine, and diabetes (Medtronic); and MIS, peripheral vascular, neurovascular, and respiratory/monitoring (Covidien)--the new company will be about second globally to J&J and led by Omar Ishrak, current chairman and CEO of Medtronic. The cost savings are expected to be $850mm by the end of fiscal 2018. Medtronic will transfer its corporate address to Ireland, where it will operate as Medtronic PLC, benefit from a lower 12.5% tax rate versus the 35% rate in the US, and be able to protect the $14bn in cash it has in overseas accounts from US tax repatriation penalties. A stipulation of the agreement is that Medtronic may terminate the deal (paying an $850mm break-up fee) if US laws require it to register as a US entity. The merged company will have pro forma revenues of $27bn; a total of $13bn in combined revenues come from outside the US, $3.7bn of which are from emerging markets, where Medtronic hopes to better establish itself. Covidien was initially founded as Tyco Healthcare in 1994, a division of Tyco International. (Tyco almost merged with CR Bard in 2001, but that transaction was terminated.) As part of Tyco, Covidien acquired various device giants, US Surgical among them, prior to its separation from Tyco in June 2007 to become an independent company. It also acquired radiopharmaceuticals firm Mallinckrodt in 2000, but spun it off as an independent company last year. More recently Covidien redefined its business by divesting several areas--including its specialty chemicals, sleep therapy offerings, incontinence unit, and Confluent surgical sealants and adhesion barrier product lines--and through acquisitions of VNUS Medical (MIS devices), ev3 (cardio/neuro devices), Barrx Medical (endoscopes for GI diseases), Given Imaging (GI devices), and most recently, New Wave Surgical (surgical visualization tools). Most of Covidien’s revenues are now derived from diagnostic, critical care, and surgical devices and supplies offered through three core divisions: surgical solutions (stapling, vessel sealing, fixation, mesh, ablation, MIS/laparoscopy, RF energy, and instruments), respiratory and patient care (sensors, monitors, airway, ventilation, pulse oximetry, wound care, feeding, urology), and vascular therapies (compression, dialysis, peripheral stents, and neurovascular). Covidien’s products mainly cater to hospital patients and relate to general, colorectal, bariatric, thoracic, urologic, gynecologic, and hernia surgical procedures. The added business areas will supplement Medtronic, enabling it to provide hospitals with a full product suite as most of its offerings are chronic disease therapies that benefit patients after hospitalization. Over half of Medtronic’s $17bn in sales are from its cardio/endovascular units (cardiac rhythm management including implantable defibrillators, catheters, balloons, and stents), over a third from restorative therapies (spinal and orthopedic, neuromodulation, and surgical technologies), and the rest from diabetes care (insulin pumps and continuous glucose monitoring), recently enhanced through a collaboration with Sanofi to focus on improving Type II diabetes management. Over the next ten years Medtronic has pledged to invest $10bn in the US in VC funding for start-ups, acquisitions, and R&D. The combined company will have over 87k employees (with the 38k Covidien adds) including over 10k scientists and engineers, 80% of whom will be located in the US. Investment Banks/Advisors: Perella Weinberg Partners (Medtronic Inc.); Goldman Sachs & Co. (Covidien PLC)

Merz GMBH & Co. KGAA

Merz North America Inc.

Ulthera Inc.

In its largest acquisition to date, and the third within a year in the aesthetics field, Merz North America Inc. (part of German drug company Merz GMBH & Co. KGAA’s Merz Pharma Group) will pay $600mm in up-front and earn-out payments for privately held Ulthera Inc. (Jun.)

Ulthera has raised nearly $39mm in venture financing since its 2004 founding, resulting in a 15.5x step-up based on the total potential deal value (investors include New Enterprise Associates, 3i, and Apposite Capital). The company had filed an S-1 to go public in April 2014, but hadn’t announced any terms. Ulthera’s first commercial product Ulthera, approved in over 50 markets including the US and Europe, is used during a 60-90-minute nonsurgical procedure for skin lifting on the eyebrow, neck, and underneath the chin. Ulthera delivers micro-focused ultrasound energy to noninvasively stimulate natural tissue repair and prompt new collagen formation. At the same time therapeutic ultrasound is administered, ultrasound imaging is used to visualize the treatment areas being targeted. Ulthera recently submitted for approval of Ulthera to reduce in lines and wrinkles of the skin on the chest. In late 2014 Ulthera plans to launch its next product Cellfina, which cuts the connective bands underneath cellulite depressions. The company got this microblade device earlier this year through its acquisition of Cabochon Aesthetics. Ulthera had $11.8mm in 2013 net income on $82.2mm in revenues, and $16.1mm cash on hand at the end of Q1 2014. It expects 2014 sales will exceed $100mm. In the last year-and-a-half, Merz has stepped up efforts to establish itself as a leader in aesthetics. After losing a bidding war in April 2013 to Valeant over Obagi Medical Products (dermatology firm that makes products for fine lines, wrinkles, and other dermatology uses), Merz went on to acquire Swiss company Anteis, which produces dermal fillers including Esthelis and Fortelis, and Neocutis, which makes cosmetics and anti-aging skin care offerings.

Spectranetics Corp.

AngioScore Inc.

Spectranetics Corp. (medical devices for use in minimally invasive cardiovascular procedures) acquired AngioScore Inc. (cardiovascular scoring balloon catheters to treat cardiovascular and peripheral artery disease) for $230mm in up-front cash, plus contingent commercial and regulatory milestone payments. (May)

The transaction will be composed of $115mm in cash plus $115mm in Spectranetics common stock, which will be funded from the proceeds of a concurrent $200mm convertible note offering. AngioScore will also pay cash milestones as follows: annual payments on net sales of AngioScore products in 2015, 2016, and 2017 (equal to a multiple of two times each year’s annual net sales increase in excess of 10% over the highest preceding year net sales); $15mm if AngioScore’s drug-coated AngioSculpt receives a US IDE approval for use in the coronary or peripheral arteries by December 31, 2016; $5mm if AngioSculpt gains the CE mark for use in the coronary arteries by December 31, 2016; and $5mm if AngioSculpt receives CE mark approval for use in the peripheral arteries by December 31, 2016. AngioScore’s portfolio includes AngioSculpt RX, a rapid exchange coronary scoring device; AngioSculpt PTCA, an over-the-wire scoring balloon catheter for treatment of coronary arteries; and AngioSculpt PTA, a scoring balloon catheter for peripheral vascular diseases. AngioScore’s products are used to treat dilatation of lesions in the iliac, femoral, ilio-femoral, popliteal, infra popliteal, and renal arteries, and obstructive lesions of native or synthetic arteriovenous dialysis fistulae. The transaction is expected to be accretive in 2015 to adjusted EBITDA and should bring pre-tax cost synergies of $8mm to $10mm to Spectranetics. The acquisition will expand Spectranetics’ markets, add to its life- and limb-saving solutions, broaden its product pipeline (including the addition of a proprietary drug-coated scoring balloon platform), and increase topline growth. Pro forma, the combined entity had $213.5mm of revenue and $10.1mm of adjusted EBITDA in 2013. Spectranetics completed a $98.3mm common stock public offering earlier in the month. Investment Banks/Advisors: Piper Jaffray & Co. (Spectranetics Corp.)

Stryker Corp.

Small Bone Innovations Inc.

To further expand its upper and lower extremities portfolio, device giant Stryker Corp. paid $375mm in cash for closely held Small Bone Innovations Inc. (SBI; small bone and joint repair). (Jun.)

Ten-year-old SBI offers products to treat injuries of the foot/ankle, thumb, hand, wrist, and elbow. Its Scandinavian Total Ankle Replacement (STAR) system is the only PMA-approved, cementless, three-piece total ankle replacement system, and is currently sold in more than 40 countries throughout the world. STAR becomes Stryker’s first total ankle replacement system, throwing Stryker into this $100mm market with fellow competitors DePuy, Tornier, Wright Medical, and Zimmer. SBI's other lines include the Avanta CMC implant to treat basal joint arthritis of the thumb, Diamond carpal fusion plate, SR implants for hand reconstruction, Re-Motion total wrist system, Precise SD distal radial volar plate, rHead elbow devices, and RingFIX external ankle fixation system. SBI generated $48mm in sales during 2013. This deal comes just four months after Stryker bought Berchtold Holding AG (surgical infrastructure equipment) for $172mm, and paid an undisclosed sum for hip arthroscopy company Pivot Medical Inc. Investment Banks/Advisors: Piper Jaffray & Co. (Small Bone Innovations Inc.)

Volcano Corp.

AtheroMed Inc.

Volcano Corp. (devices to diagnose and treat coronary and peripheral vascular diseases) acquired private cardiovascular device maker AtheroMed Inc. for $115mm in cash up front. (May)

Volcano will also pay a $15mm earn-out should a second-generation version of AtheroMed’s Phoenix atherectomy system for peripheral artery disease (PAD) receive premarket 510(k) notification from the FDA by November 15, 2014. (The application pertains to manufacturing design enhancements.) The acquisition also includes revenue-based milestones. Phoenix gained 510(k) clearance in January 2014 and already has CE mark approval in Europe. Volcano plans to do a limited market release of Phoenix by the end of this year, with a full launch scheduled for early 2015. The device allows physicians to treat PAD using a peripheral atherectomy catheter that captures and removes diseased material to restore blood flow to the ankle and foot. Founded in 2006, AtheroMed has raised at least $21mm in venture financing. Nine months ago Volcano added Medtronic PLC’s Pioneer Plus diagnostic ultrasound transducer and percutaneous catheter to its portfolio, and at the end of 2012 it gained the Crux vena cava filter through its purchase of Crux Biomedical.

Welch Allyn Inc.

PediaVision Holdings LLC

Welch Allyn Inc. (cardio-diagnostics, physical assessment, and vital signs monitoring devices) acquired PediaVision Holdings LLC, a privately held developer of vision screening systems. (Jun.)

PediaVision’s third-party manufacturers agreed to continue developing and sourcing the company’s key asset called Spot, a portable and lightweight vision assessment tool that may be used for any pediatric age group, from toddlers to teenagers, to test for refractive error, including nearsightedness, farsightedness, astigmatism, and eye misalignment. Spot transmits data wirelessly and provides results within seconds. PediaVision, established in 2007, has raised at least $1mm to date, through a July 2008 equity financing, and a year later filed a second Form D for $1mm, but it’s not clear if that amount was actually sold. Welch’s physical exam device portfolio spans many different clinical categories, including otolaryngology (otoscopes, hearing screeners, and laryngoscopes), women’s health, and dermatology. Further, the company already participates in the vision screening market via SureSight, a complementary product to Spot.

Alliances

CorTechs Labs Inc.

General Electric Co.

GE Healthcare

GE Healthcare and CorTechs Labs Inc. (brain image analysis) will jointly market an MRI scanner that incorporates the latter’s NeuroQuant 510(k)-cleared quantitative MRI measurement tool. (May)

Based on a high-resolution 3D T1-weighted sagittal, non-contrast-enhanced MRI scan, NeuroQuant automatically detects volume changes (cortical and subcortical) in 22 brain structures, including the hippocampus and ventricles. The product then compares results with normal scans of patients with similar age, sex, and cranial volume to identify potential neurodegeneration. NeuroQuant may also be used to track or predict disease progression. The device has been distributed in the US by Philips Healthcare’s Invivo under a 2010 agreement that was expanded earlier this year. The CorTechs alliance is one of several CNS-focused deals GE has signed since 2010. Between then and 2020, the company pledges to invest over $500mm in neurology research. GE is working with DiaGenic and J&J’s Biosense to create diagnostics for mild cognitive impairment and Alzheimer’s, respectively.

Itamar Medical Ltd.

Nihon Kohden Corp.

In a three-year agreement, Nihon Kohden Corp. will exclusively market and distribute fellow device firm Itamar Medical Ltd.’s EndoPAT noninvasive diagnostic device in Japan. (Jun.)

When functioning normally, the endothelium--the thin layer of cells that lines the interior surface of blood vessels--protects the blood vessels from atherosclerosis and plaque buildup. EndoPAT can assess endothelial function and therefore diagnose early heart disease. The easy-to-use test can be performed in a doctor’s office in just 15 minutes and results are immediate. Nihon Kohden will sell EndoPAT to hospitals and to over 100k general practitioners throughout Japan. The deal may be extended after the three-year term expires. Itamar also offers the FDA-approved WatchPAT sleep apnea detection device, which is sold by Philips in the Japan and Medtronic in the US.

Financings

Edap TMS SA

EDAP TMS SA (high-intensity focused ultrasound (HIFU) treatment for cancer) netted $8.8mm through the sale to institutional investors of 3mm American Depositary Shares (ADSs) at $3.11 apiece. Each ADS is worth one common share. HC Wainwright was the placement agent. EDAP will use some of the proceeds to prepare for a July 30, 2014 review by the FDA's Gastroenterology and Urology Devices Panel of the Medical Devices Advisory Committee regarding the pre-market approval application for the Ablatherm-HIFU prostate cancer therapy. (May)

Investment Banks/Advisors: HC Wainwright & Co.

Insulet Corp.

Diabetes-focused Insulet Corp. netted $169.3mm through the public sale of 2% convertible senior notes due 2019. The debt converts at 21.5019 common shares per $1k principal amount of notes, or $46.51 per Insulet share. (The company's stock is averaging $35.48.) Insulet will use a majority of the proceeds to repurchase outstanding 3.75% convertible notes due 2016. (Jun.)

Investment Banks/Advisors: JP Morgan Chase & Co.; Perella Weinberg Partners

Intersect ENT Inc.

Menlo Park-based Intersect ENT Inc. (drug delivery implants for sinusitis) filed for its initial public offering. (Jun.)

The company has developed a drug-eluting bioabsorbable implant technology targeting ENT doctors. Its initial devices, PROPEL and PROPEL mini, are the only drug-eluting stents approved by the FDA for chronic sinusitis. The products self-expand during surgery and conform to and hold open the surgically enlarged sinus while releasing anti-inflammatory steroids for 30 days. In August 2012, the company received PMA approval from the FDA for PROPEL and in November 2012 received one for PROPEL mini (targeting patients requiring less extensive surgery or those with smaller anatomies). Intersect has over 1,000 physicians in the US using its devices and expects to expand its efforts overseas. The company has raised nearly $80mm since inception from Venture Partners, Kleiner Perkins, Norwest Ventures, PTV Sciences, and Medtronic (which owns nearly 7% of the company). The most recent fundraising was a $30mm Series D in 2013. Intercept reported sales of approximately $23mm in the year ended March 2014. Investment Banks/Advisors: JP Morgan & Co.; Leerink Partners LLC; Piper Jaffray & Co.; Wedbush PacGrow Life Sciences

Iradimed Corp.

iRadimed Corp., which sells MRI-safe infusion systems, filed for its initial public offering. (Jun.)

Founded in 1992 as IRI Development, iRadimed has developed a non-magnetic IV infusion system that won’t interfere with MRI imaging or generate radiofrequency noise, and thus may be used during MRI procedures for patients who require continuous infusions of anesthesia or other IV fluids. The company’s mRidium infusion pump, which received 510(k) clearance in 2005, may be operated in the presence of 0.2-3 Tesla magnets and up to a 10k gauss magnetic field. It is built with non-ferrous components, ceramic non-magnetic ultrasound motors, and a non-magnetic mobile stand. MRidium also incorporates Masimo’s SET technology for oxygen saturation monitoring. In North America, Mallinckrodt had been exclusively selling mRidium, but their agreement ended in 2010 and now iRadimed markets the product directly in this territory, and via distributors internationally. IRadimed estimates there are over 1.9k pumps installed around the world. MRidium had been competing head-to-head with another MRI-compatible infusion system Continuum, from Bayer’s Medrad. But in 2012 Bayer recalled the device because of tubing issues, and earlier this year the company issued a second recall due to safety risk. By mid-2015 Continuum is expected to be discontinued. Investment Banks/Advisors: Monarch Capital Group LLC; Roth Capital Partners

LeMaitre Vascular Inc.

LeMaitre Vascular Inc. (peripheral vascular devices and implants) netted $10.8mm through the follow-on public sale of 1.64mm common shares (including the overallotment) at $7 each. (May)

Investment Banks/Advisors: Barrington Research Associates Inc.; Benchmark Co. LLC; Brean Capital LLC; Canaccord Genuity Inc.; Roth Capital Partners; Stifel Nicolaus & Co. Inc.

Milestone Scientific Inc.

Milestone Scientific Inc. (computer-controlled drug delivery systems for the medical and dental markets) grossed $10mm through the simultaneous sales of 2mm common shares at $1.50 (a slight discount) and 7mm preferred shares at $1k, all to Innovest SPA. (May)

The preferred shares convert to common at $2.545 apiece, but if not converted within five years, are mandatorily convertible at $2.545 or $1.50, depending on certain conditions. Proceeds will fund development of new devices based on the company's CompuFlo and Dynamic Pressure Sensing computer-controlled injection systems.

NeuroMetrix Inc.

Sabby Healthcare Volatility Master Fund bought $8mm in NeuroMetrix Inc. (devices and diagnostics for CNS conditions, including pain and diabetic neuropathy) common shares, and Series A-3 and A-4 preferred stock, which convert into common at $2.04 (the company’s stock is averaging $1.89). (Jun.)

There were 664.6k common shares issued initially for $2.04 (an 8% premium), 2.6k Series A-3 preferred shares for $1k (converting into 1.3mm common), and 4k Series A-4 shares at $1k (converting into 2mm common). Sabby also received five-year warrants to purchase 3.9mm shares for $2.04. The financing was announced concurrent with the Japanese approval of NeuroMetrix’s NC-stat DPNCheck as a Class II device for early-stage detection of diabetic peripheral neuropathy.

Pixium Vision

Pixium Vision (sensory neuromodulation to restore vision) raised €34.5mm ($47mm) in its IPO on Euronext Paris. The company sold 4.2mm shares (including full exercise of the extension clause; more than the 3.6mm planned) for €8.28, the bottom end of its €8.28-10.12 price range. Bpifrance Participations bought €8.5mm IPO shares (and adds a board member to Pixium), and existing investors Sofinnova, Abingworth, Omnes Capital, Innobio, and Seventure purchased €8.5mm. (Jun.)

The start-up was founded in 2011 by Bernard Gilly, PhD, and Jose-Alain Sahel, who also established the ophthalmic therapeutics company Fovea (acquired by Sanofi in 2009). Using technology developed at the National Eye Hospital’s Vision Institute in Paris, Pixium has created the Intelligent Retinal Implant System (IRIS), a 150-electrode epiretinal implant that addresses vision loss due to diseases, such as late-stage AMD and retinitis pigmentosa, caused by degeneration of photoreceptor cells. IRIS is surgically attached to the surface of the retina, with the goal of replacing the signal processing functions. Following the procedure, the patient must wear glasses containing an integrated micro-camera and wireless transmitter. The camera takes images, which are processed by a pocket computer (connected to the spectacles) and converted into signals that are transferred back through the spectacles and projected onto the implant to stimulate ganglion cells and generate images. During a rehab period, the brain adjusts and learns how to interpret the signals. IRIS started clinical testing in Europe in April 2013. Supported by the IPO funds, Pixium plans to apply for CE mark approval in late 2014 and launch the product the following year. In addition, the company will pursue US market approval, anticipated in late 2017 or early 2018. Pixium is also advancing a next-generation subretinal implant, called PRIMA, which Stanford University is currently developing. This neuromodulation system, based on the photovoltaic retinal prosthesis, has several thousand electrodes and receives images via a head-mounted video camera. Pixium expects to start clinical trials in Europe in 2016. To date, Pixium has raised €24.5mm ($33.2mm) in Series A financing, and the company’s lead investor is Sofinnova, which post-IPO owns 23% of the company. Investment Banks/Advisors: Deloitte & Touche; Societe Generale

Spectranetics Corp.

To fund its recently announced acquisition of AngioScore Inc., Spectranetics Corp. (minimally invasive cardiovascular devices) netted $222.6mm through the public sale of 2.625% convertible senior notes due 2034. The debt converts to 31.9020 common shares per $1k principal amount of notes, equal to $31.35 per share. (Spectranetics stock is currently averaging $22.54.) (Jun.)

Investment Banks/Advisors: Piper Jaffray & Co.

PHARMACEUTICALS

Mergers & Acquisitions

Abbott Laboratories Inc.

Veropharm

Abbott Laboratories Inc. is buying public Russian pharmaceutical producer Veropharm for $395-495mm, based on the ownership held by Veropharm’s holding company Garden Hills at the time the deal closes. Abbott will also assume $136mm in net debt. (Jun.)

The purchase allows Abbott to expand its footprint in the emerging Russian market, even though it has been present there for 36 years. Founded in 1997, Veropharm has three drug manufacturing facilities, over 100 products, and more than 2k employees. Its offerings span various therapeutic areas including women's health, central nervous system, cardiovascular, gastroenterology, and oncology. Veropharm’s top sellers for 2013 were Geptor (ademetionine) for digestive tract disorders, Cerepro (choline alfoscerate) for CNS diseases, the antineoplastic and immunomodulating agent Tautax (docetaxel), and the antimicrobial Irunine (itraconazole). For 2013, Veropharm reported $164.6mm in revenues and $19.1mm in earnings. Abbott believes the transaction will add about $150mm in sales for 2015. Just last month the Big Pharma paid $2.9bn (and assumed $430mm in debt) for Chilean specialty branded generics firm CFR Pharmaceuticals SA, gaining a strong presence in the Latin American market.

AbbVie Inc.

Shire PLC

On the heels of Pfizer Inc.’s failed takeover attempt of AstraZeneca PLC, AbbVie Inc. proposed to pay $46bn (£27bn) for Shire PLC, whose stockholders would receive $34.78 in cash and 0.7988 ordinary AbbVie shares for each share held (worth $78.07 , a 58% discount). (AbbVie’s initial offer on May 5th valued each Shire share at $65.72 and its second bid on May 14th was $67.35.) (Jun.)

As in the case of Pfizer/AZ, the AbbVie/Shire deal is also subject to UK takeover law. AbbVie has until July 18 to make a formal offer or reach an agreement regarding the sale of UK-based Shire, and if that deadline passes it cannot make another offer for at least six months. If successful, the merger would have significant tax benefits since having a UK location avoids US taxes on ex-US profits. Shire would bring diversity to AbbVie’s portfolio, which is currently led by Humira (adalimumab), an antibody that generates 60% of its revenues. Shire’s top-seller is the ADHD medication Vyvanse (lisdexamfetamine dimesylate), which generated $1.2bn in sales for 2013. If Shire expands the drug label to include binge-eating disorder, the firm could generate another $300mm in revenue by 2020. Shire has been actively expanding its rare disease business over the past few years. In May it paid $260mm for Lumena Pharmaceuticals, which is developing treatments for rare liver and metabolic diseases, and at the end of 2013 it shelled out $3.3bn for orphan disease firm ViroPharma Shire’s rare disease portfolio includes the enzyme replacement therapies Replagal (agalsidase alfa) for Fabry disease, Vpriv (velaglucerase alfa) for Gaucher disease, and Elaprase (idursulfase) for Hunter syndrome. AbbVie says a merger would create a global and diversified biopharma with leading franchises in immunology, rare diseases, virology, neuroscience, and metabolic diseases. In addition the combined entity would hold a pipeline with over 15 compounds in Phase III or under regulatory review. For FYE 2013, Shire reported $4.9bn in revenues and had $665mm in earnings. The company anticipates doubling its sales by 2020. There is speculation that Shire will have other suitors including Big Pharmas such as Merck, Lilly, and BMS and possibly even Allergan, which is trying to avoid a takeover by Valeant. It is also possible that Shire may stave off AbbVie by performing a defensive acquisition of possibly Cubist or BioMarin.

June 2014 update: On June 20, Shire rejected AbbVie’s latest offer saying it significantly undervalues the company.

Investment Banks/Advisors: Citigroup Inc.; Evercore Partners; Morgan Stanley & Co. (Shire PLC); JP Morgan & Co. (AbbVie Inc.)

Celsion Corp.

Egen Inc.

Boosting its own pipeline that contains the heat-activated cancer therapy ThermoDox, Celsion Corp. agreed to acquire Egen Inc., a private company developing DNA- and RNAi-based oncology therapeutics. (Jun.)

Celsion paid $3.4mm in cash up front, and will issue a total of $10.6mm of its common shares (3.4mm shares at $3.13, a slight premium). Egen gets 2.7mm shares now, with the remaining 670k held in escrow for two years. The company could also see up to $30.4mm in earn-outs based on development and licensing achievements. Following the acquisition, the combined company will work together on a variety of therapies and technologies for cancer. Egen brings its lead candidate EGEN001, an IL-12 DNA plasmid vector encased in a nanoparticle delivery system that is in Phase Ib for ovarian cancer and entering Phase I for glioblastoma. The therapy was designed using Egen’s TheraPlas DNA and mRNA delivery technology. In addition to EGEN001 and TheraPlas, Celsion also gains access to Egen’s TheraSilence technology for delivering siRNAs, microRNAs, and microRNA mimics (it was used to design another compound, preclinical EGENRNA002), and the RAST (RNA, Amplification, and Secretion Technology) platform. All will complement Celsion’s ThermoDox, a liposomal encapsulation of doxorubicin that is in Phase III for primary liver cancer and Phase II for recurrent chest wall breast cancer. Celsion plans to retain all of Egen’s staff; the combined company will be headquartered at Celsion’s existing NJ facility, while discovery and preclinical work will be carried out at Egen’s Alabama location. Investment Banks/Advisors: Cantor Fitzgerald & Co. (Celsion Corp.)

Endo International PLC

Dava Pharmaceuticals Inc.

Endo International PLC is acquiring private generics firm Dava Pharmaceuticals Inc. for $575mm in cash, plus up to $25mm in sales-based earn-outs. (Jun.)

Dava has a portfolio of 13 marketed generics (including amoxicillin, penicillin, and pyrazinamide) as well as a pipeline spanning various therapy areas. It plans to launch five products in 2015 and 20 more over the next several years. In 2013, Dava had revenues of $131mm, $54mm in earnings, and adjusted EBITDA of $100mm. Facing patent losses, Endo has been busy with acquisitions and divestitures as it strives for long-term growth. The Dava acquisition is Endo’s third transaction in ten months designed to boost its generics portfolio. Two months ago, Endo paid $268.8mm in cash for Grupo Farmaceutico Somar, a private Mexican pharmaco developing branded, generic, & OTC drugs. And in August 2013 its Qualitest Pharmaceuticals subsidiary bought fellow generics firm Boca Pharmacal for $225mm. Investment Banks/Advisors: Oppenheimer & Co. Inc. (Dava Pharmaceuticals Inc.)

Hikma Pharmaceuticals PLC

Boehringer Ingelheim GMBH

Bedford Laboratories

Hikma Pharmaceuticals PLC (branded, injectable, and generic drugs) paid $225mm up front for Bedford Laboratories, the US generic injectables division of Boehringer Ingelheim GMBH’s now defunct Ben Venue Laboratories. Over the next five years, Bedford is eligible for $75mm in cash earn-outs tied to performance. (May)

The acquisition adds 84 products to Hikma’s 63 injectables portfolio, including drugs gained in Hikma’s 2010 takeover of Baxter International’s US generic injectables unit, which brought multiple cephalosporins, critical care products, and a controlled substances manufacturing facility. Following the Baxter deal, Hikma became the third-largest US generic injectables producer. The current transaction includes Bedford’s IP rights, license contracts, raw material inventories, and pipeline of 27 acute care candidates, 16 of which are awaiting FDA approval. Hikma also acquired virtually all of the assets of Ben Venue’s sterile injectables/lyophilization plant in Bedford, Ohio. In November 2011 Ben Venue suspended manufacturing and distribution at this center after a review found that routine preventive maintenance and requalification hadn’t occurred when it was scheduled. Approximately two years later, Ben Venue shut down and concurrently said it was seeking strategic alternatives for Bedford. Founded in 1993, Bedford claims to have the third-largest portfolio of generic injectables in the US, covering niche therapeutic areas, particularly oncology. Its customers included cancer treatment centers, acute care hospitals, and group purchasing organizations. In 2013, Bedford had a $22mm net loss on $19mm in revenue. Hikma is planning to move manufacturing to its sites in the US, Portugal, and Germany, and re-launch Bedford’s drugs during 2015-2017. Investment Banks/Advisors: Bank of America Merrill Lynch (Ben Venue Laboratories Inc.); Centerview Partners LLC; Citigroup Inc.; HSBC (Hikma Pharmaceuticals PLC)

Merck & Co. Inc.

Idenix Pharmaceuticals Inc.

Beating out other rumored bidders including AbbVie Inc. and Johnson & Johnson, Merck & Co. Inc. paid $24.50 per share (a 264% premium), or $3.7bn total, to buy publicly traded Idenix Pharmaceuticals Inc. (viral diseases). At just over $4bn in sales last year, Merck’s infectious disease portfolio (not including vaccines) made up 11% of the company’s pharma sales. Idenix may improve that number, although the first drug to come out of the acquisition is years away at the least. (Jun.)

Idenix was founded in 1998 as Novirio Pharmaceuticals, which attempted to go public in 2002 but shortly after ended up selling its majority stake to Novartis. The Big Pharma held onto its majority until mid-2011 when an Idenix FOPO reduced its ownership to 36%. Idenix, which completed an IPO in 2004, focuses on the hepatitis C space and is developing nucleotide polymerase and NS5A inhibitors that can be used in any HCV genotype. The company hopes to launch an all-oral, once-daily combination of direct-acting antiviral (DAA) agents that doesn’t require concomitant administration of pegylated interferon and ribavirin. Its lead internal candidate IDX21437, a uridine-based nucleotide prodrug, started a Phase I/II trial late last year outside the US and also has a follow-on compound, IDX21459, in Phase I. Merck itself has been pursuing all-oral HCV combinations, including its second-generation NS3/4A protease inhibitor MK5172, which is paired with NS5A blocker MK8742. The Phase III program has FDA breakthrough designation. Merck is planning to add IDX21437 to the MK5172/MK8742 regimen. In June 2013, Idenix and Janssen signed a nonexclusive deal to combine their DAAs, including Idenix’s pan-genotypic NS5A inhibitor samatasvir (IDX719), Janssen’s non-nucleoside polymerase inhibitor TMC647055 with low-dose ritonavir, and Medivir’s protease inhibitor simeprevir (TMC435; through an agreement between Janssen and Medivir). This combination is undergoing a Phase II trial. Besides the Janssen collaboration, Idenix has no other major alliances. It had partnered non-nucleoside reverse transcriptase inhibitors for HIV/AIDS, including GSK2248761 (formerly IDX899), with GSK in 2009, but the FDA put the candidate on clinical hold and the agreement terminated (GSK had transferred its rights to the Viiv JV with Pfizer). Idenix had a 2013 net loss of $122mm on $469k in revenues, and at the end of Q1 2014 reported $205k cash on hand. In the past few years, the company has raised nearly $380mm through several private and public offerings including a January 2014 $107mm RDO, which resulted in hedge fund Baupost Group owning 35% of Idenix post-transaction. Investment Banks/Advisors: Credit Suisse Group (Merck & Co. Inc.); Centerview Partners LLC (Idenix Pharmaceuticals Inc.)

Ohr Pharmaceutical Inc.

SKS Ocular LLC

Privately held ophthalmic incubator SKS Ocular LLC and its affiliate SKS Ocular I LLC sold virtually all of their assets to Ohr Pharmaceutical Inc. (cancer supportive care and macular degeneration). SKS received $3.5mm in cash and 1.2mm Ohr shares valued at $10.2mm. Once the deal closes, SKS’s management will take on executive roles at Ohr. (May)

SKS could also get 1.5mm Ohr shares (based on the current ten-day average, that stock is valued at $12.7mm) in earn-outs related to three development and regulatory milestones. The transaction includes SKS’s R&D personnel, a research lab in San Diego, and its microfabrication technology (licensed from Akina Pharmaceuticals), which provides sustained-release drug delivery over three-to-six months. Using a dissolvable, gelatin, hydrogel template, the platform creates nanoparticle and microparticle formulations of adjustable size and shape. SKS’s pipeline is led by a preclinical subconjunctival reformulation of an existing drug for glaucoma that’s partnered with a large undisclosed pharmaco. The candidate is administered only once every three months, vs. current treatments which require daily dosing. SKS is entitled to two-thirds of any cash payments Ohr receives (up to $5mm) from this partner. In addition, Ohr now owns preclinical sustained-release programs for glaucoma, steroid-induced glaucoma, allergic conjunctivitis, and retinal disorders. The company also takes on SKS’s license to technology and related patents from the Cleveland Clinic covering a carboxyethylpyrrole (CEP)-induced animal model for dry AMD (patients with AMD have high levels of CEP adducts in their serum). The Cleveland Clinic also licensed SKS a CEP proteomics biomarker. The newly acquired assets should help Ohr as it advances its Phase II candidate squalamine for wet AMD, retinal vein occlusion, diabetic macular edema, and proliferative diabetic retinopathy. Squalamine is a topical anti-angiogenic eye drop.

Teva Pharmaceutical Industries Ltd.

Labrys Biologics Inc.

Teva Pharmaceutical Industries Ltd. paid $200mm up front for Labrys Biologics Inc., a private start-up focused on the treatment of migraine. Teva may also spend up to $625mm in earn-outs based on pre-launch milestones. (Jun.)

Labrys was formed in 2012 to develop an anti-migraine, fully humanized monoclonal antibody that Pfizer shelved. LBR101 (formerly RN307, PF04427429) came from Pfizer’s 2006 acquisition of Rinat Neuroscience. At the start of this year, Labrys advanced the calcitonin gene-related peptide (CGRP) antagonist into Phase IIb as a once-monthly subcutaneous injection--at 39-48 days, LBR101 has a strong half-life--for high-frequency episodic and chronic migraine. In addition to long half-life, Labrys believes LBR101’s other advantage over existing CGRP antagonists is the avoidance of liver toxicity issues. Topline data results are expected later this year or in early 2015. Labrys’ shareholders, including venBio, Canaan Partners, InterWest Partners, and Sofinnova Ventures, realized nearly a 6.5x step-up (based on just the up-front payment) in the current transaction: together they invested $31mm in Labrys’ Series A financing in early 2013. The present Labrys deal comes about five months after Teva got its hands on another migraine therapy. Beating out fellow bidder Endo, Teva bought NuPathe and its FDA-approved migraine patch Zecuity for $122mm. Teva hopes to be among the top pain management companies by 2020; the company already markets Actiq, Fentora, and other products via its Cephalon acquisition, and has several late-stage pain candidates including Phase III MoxDuo (Israeli rights licensed from QRxPharma, although in the US this drug just received a complete response letter, the third formal rejection) and Phase III CEP33237 (also from Cephalon), an abuse-deterring formulation of hydrocodone.

Valeant Pharmaceuticals International Inc.

Akorn Inc.

ECR Pharmaceuticals Co. Inc.

In the wake of its proposed offering for Allergan, Valeant Pharmaceuticals International Inc. paid $41mm in cash for Akorn Inc.’s ECR Pharmaceuticals Inc. (branded prescription pharmaceuticals and generics). Valeant will also assume certain liabilities. (Jun.)

Akorn gained ECR as part of its $591mm acquisition of Hi-Tech Pharmacal Co. Inc. in August 2013, but determined it was no longer a strategic fit. The divestiture enables Acorn to focus on its main business of niche dosage forms. Founded in 1990, ECR’s portfolio consists of Bupap for tension headache, DexPak and Tropazone dermatology products, Lortab analgesic, TussiCaps and Lodrane cold and allergy medicines, VoSol for external ear infections, Zolpimist oral mist spray for insomnia.

Alliances

3SBio Inc.

Selecta Biosciences Inc.

Chinese biotech 3SBio Inc. licensed Selecta Biosciences Inc. (immunomodulatory therapeutics and vaccines) exclusive US and European development rights to pegsiticase, a Phase I pegylated recombinant uricase for reducing plasma uric acid levels in gout patients. (Jun.)

Pegsiticase (formerly known as Uricase-PEG20) was originated by Phoenix Pharmacologics and then fell into the hands of Polaris Pharmaceuticals via a 2006 acquisition. But in mid-2008 EnzymeRx LLC got exclusive global rights--excluding Taiwan--and in late-2010 the company passed those rights to 3SBio for $6.25mm. Selecta will combine pegsiticase with its immunomodulatory Synthetic Vaccine Particle platform to develop preclinical SEL212 for refractory and tophaceous gout and tumor lysis syndrome (elevated uric acid levels resulting from chemotherapy). Selecta’s SVP is designed to optimize the safety and efficacy and reduce the risk of immunogenicity. Both Selecta and 3SBio will work together to gain proof-of-concept for SEL212 and pegsiticase in their territories, with these trials expected to commence in 2015. (3SBio will continue developing pegsiticase in Greater China and Japan.) If successfully developed, the drug would be the first non-immunogenic version of uricase. There are currently limited treatment options available for refractory and tophaceous gout. Concurrent with the deal, Selecta received a $1.25mm grant to support the research of a dual action, immune-activating SVP for malaria.

Actavis PLC

Teva Pharmaceutical Industries Ltd.

Cephalon Inc.

Under a patent settlement, Cephalon (an absorbed division of Teva Pharmaceutical Industries Ltd.) licensed Allergan PLC rights to market generic versions of Nuvigil (armodafinil) 100mg and 200mg starting on June 1, 2016, or earlier. (Actavis believes it was the first company to file an ANDA in these dosage strengths, giving it 180 days of exclusivity.) Actavis may launch the 50, 150, and 250mg strengths 180 days after the first introductions of generics in those dosages. (May)

In 2010 Cephalon sued Watson (which merged with Actavis in 2012), claiming infringement on its US patent 7,132,570. The current deal now settles all outstanding litigation between the companies. Incidentally, prior to the Watson merger, Actavis had developed its own Nuvigil generic. Cephalon filed suit against Actavis but withdrew in 2011 after Actavis stated it would not market a competing version. Nuvigil is indicated for excessive sleepiness due to shift work disorder, obstructive sleep apnea, and narcolepsy, and had $437mm in sales for FYE February 28, 2014.

Acura Pharmaceuticals Inc.

Novartis AG

Sandoz Inc.

In the US District Court for the District of Delaware, Acura Pharmaceuticals Inc. (abuse-resistant drug candidates) settled pending patent litigation with Novartis AG’s Sandoz Inc. surrounding the former’s Aversion formulation of oxycodone for acute and chronic moderate-to-severe pain. (May)

Under a 2007 alliance, Pfizer had been marketing the product under the name Oxecta, but terminated the deal this past April. Acura is seeking a new US partner. In October 2012, Acura filed the lawsuit against Sandoz and several other companies that had submitted ANDAs listing Aversion oxycodone as the reference drug, claiming infringement on Acura’s US patent 7,510,726. Under the current settlement, Acura licensed Sandoz nonexclusive US rights to launch a generic Aversion oxycodone 180 days following the introduction of a fellow generic version by the Paragraph IV first-to-file company. (If there is no such approval under Paragraph IV, then Sandoz may launch the drug when the first generics come to market.) Sandoz could potentially launch even earlier if Acura’s patents are held invalid or unenforceable, or they don’t infringe on a third-party’s generic version (and that generic receives tentative or final FDA approval), or a third party sells generic Aversion oxycodone under license or authorization from Acura. Sandoz is not required to pay Acura sales royalties unless Sandoz modifies the structure of the drug or the amount or type of excipient used, in which case it would be responsible for 7% of net profits. Acura previously settled similar patent disputes regarding Aversion oxycodone with Par Pharmaceutical, Impax Laboratories, Watson (now Actavis), and Ranbaxy.

Adaptimmune Ltd.

GlaxoSmithKline PLC

Adaptimmune Therapeutics PLC (enhances T-cells’ natural ability to destroy disease-causing cells) licensed GlaxoSmithKline PLC an option on its lead cancer candidate, Phase I/II NYESO1. (Jun.)

The companies will co-develop NYESO1 and perform manufacturing optimization. GSK may exercise its option through clinical proof-of-concept studies, which are expected in 2016, and would be responsible for further development and commercialization. Adaptimmune says it expects at least $350mm in payments over the next seven years, plus, upon option exercise, additional development and sales milestones and single- to double-digit royalties. Adaptimmune’s platform harvests a patient’s own T-cells, which are modified using T-cell receptor (TCR) engineering technology to increase affinity, inserts a new gene sequence encoding a TCR of known antigen specificity, expands the cell population, and re-injects the cells back into the body. The new T-cells help strengthen natural T-cell responses. The company’s lead program targets the cancer testis antigen NYESO1/LAGE1 to treat multiple myeloma, melanoma, sarcoma, and ovarian cancer. Besides NYESO1, Adaptimmune and GSK will co-develop additional TCR target programs and work together on engineering TCR candidates. In cancer immunotherapy, GSK has recently been building its pipeline through deals with academia, including MD Anderson (OX40-activating antibodies) and Inserm Transfert (immune checkpoint antibody modulators against inducible T cell co-stimulator). Even though GSK sold many of its oncology assets to Novartis two months ago, the Big Pharma stated it would still focus on certain early-stage cancer research. This is Adaptimmune’s first major partnership. The British biotech was spun out of Medigene in 2008 with IP Medigene gained in its 2006 acquisition of Avidex (Immunocore, Adaptimmune’s sister company and another Medigene spin-off, is also developing TCR technology). Adaptimmune has raised an undisclosed amount of financing from private individuals. Beyond cancer, the company is using its platform to reduce viral load in HIV.

Adcock Ingram Holdings Ltd.

Andrus Ltd.

EffRx Pharmaceuticals SA

Swiss firm EffRx Pharmaceuticals SA signed two distribution agreements for its osteoporosis therapy Binosto (alendronate). Andrus Ltd. will sell in Russia, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan, while Adcock Ingram Holdings Ltd.’s rights extend to South Africa, Namibia, Botswana, Swaziland, Lesotho, Zimbabwe, Kenya, and Ghana. (May)

Developed with IP licensed from Merck, Binosto is the only available buffered effervescent treatment for osteoporosis. EffRx has penned multiple agreements for the drug, most recently in February with Abiogen Pharma SPA (Italy), Atral-Cipan (Portugal), and Lacer SA (Spain). With the Andrus and Adcock licenses, Binosto will now be in 53 countries.

Aduro BioTech Inc.

Johnson & Johnson

Janssen Biotech Inc.

Aduro Biotech Inc. (cancer immunotherapies) licensed Johnson & Johnson’s Janssen Biotech Inc. exclusive worldwide rights to prostate cancer candidates including preclinical ADU741, which are based on Aduro’s live-attenuated double-deleted (LADD) Listeria monocytogene platform. (May)

Aduro will receive up to $365mm in up-front fees and development, regulatory, and commercial milestones, plus tiered sales royalties. Janssen is responsible for all R&D, manufacturing, regulatory, and commercialization activities. Aduro’s LADD immunotherapy platform engineers Listeria monocytogene strains to induce a strong immune response and express tumor-associated antigens. Janssen intends to study the LADD-based candidates together with its FDA-approved CYP17 inhibitor Zytiga (abiraterone acetate) and Phase III ARN509 (gained through J&J’s June 2013 acquisition of Aragon). In addition to the compounds for prostate cancer, Janssen also gets exclusive rights to Aduro’s GVAX vaccine technology (licensed from BioSante under a separate 2011 deal) for that indication. GVAX uses genetically modified cell lines that secrete the immunostimulant granulocyte-macrophage colony-stimulating factor (GM-CSF). GVAX vaccines are ideal for use in combination therapies because they present numerous antigens to the immune system (thus a broad immune response) and have shown a favorable safety profile.

AnaBios Corp.

Zalicus Inc.

Pain management biotech Zalicus Inc. licensed CRO AnaBios Corp. exclusive rights to its voltage-gated sodium (Nav) channel blocker program. The transaction includes IP and related assets. (Jun.)

Zalicus will receive $3.15mm in development milestones ($150k, $1mm, and $2mm for the first patient dosed in Phases I, II, and III, respectively); $14mm in regulatory milestones ($4mm, $6mm, and $4mm upon EU, US, and Japanese regulatory approval, respectively); and 6-12% in sales royalties. Nav channels are key pain signal regulators; they mediate sodium ion currents that lead to excitability of peripheral pain-sensing neurons and spinal cord neurons responsible for transmitting signals to the brain. The licensed program includes preclinical Nav 1.7 channel modulators for pain. Zalicus has been focusing on the high levels of firing and hypersensitivity in peripheral and spinal cord neurons expressing Nav 1.7 and Nav 1.8 linked to chronic inflammatory and neuropathic pain. AnaBios doesn’t appear to have its own pipeline, so the Zalicus candidates would be the first the company is pursuing, aside from its regular business of offering clients its Phase X compound selection, dosing, risk mitigation, and management service; this technology uses viable human cells, tissues, and organs for research (AnaBios will employ Phase X to advance the newly acquired program). This past April, Zalicus announced a reverse merger with Epirus Biopharmaceuticals. Upon the closing of that deal, the combined company will retain the Epirus name and Zalicus’ Nasdaq listing. Shareholders of Zalicus could end up owning between 14-19% of the new entity depending on how much cash Zalicus has at closing. While the monies from the current alliance are not expected to inflate Zalicus’ cash reserves, earlier this month the company sold its combination high throughput screening business to Horizon Discovery for $8mm, improving its cash position, and Zalicus plans to divest more assets. The biotech still owns Phase I Z944, a T-type calcium channel modulator for inflammatory pain.

arGEN-X BV

Bayer AG

Bayer HealthCare Pharmaceuticals AG

Bayer HealthCare Pharmaceuticals AG received rights to develop and commercialize Dutch biotech arGEN-X NV’s antibodies across many indications. (May)

In the past, arGEN-X has also worked with Shire (rare genetic disease drug discovery deal using SIMPLE Antibody) and RuiYi (ARGX109 for cancer and inflammation). In the Bayer alliance, arGEN-X will also take advantage of its SIMPLE Antibody platform to generate antibodies against complex targets--chosen by Bayer--that aren’t accessible via existing antibody technologies. Bayer pays an up-front technology access fee, research funding, and technical, clinical, regulatory, and sales milestones. The partners will validate human antibody leads in disease models. Bayer will conduct preclinical testing, clinical development, and is responsible for commercialization. SIMPLE Antibodies are produced in out-bred llamas. Because protein targets are highly divergent between humans and llamas, the llama immune system can generate high-affinity antibody responses, including those that are human/mouse cross-reactive, against any target. Once arGEN-X discovers an antibody, it uses other technologies to optimize cell-killing properties (BioWa’s Potelligent), extend half-life, and make other improvements. Bayer’s other recent antibody agreements have included a global license to Compugen’s checkpoint inhibitors and an option to Seattle Genetics’ antibody-drug conjugates. The Big Pharma has been a busy dealmaker in May, building up assets on both the drug development and consumer sides. It acquired Merck & Co. Inc.’s OTC business for $14.2bn. The companies also agreed to collaborate on soluble guanylate cyclase modulators for cardiovascular diseases.

Array Biopharma Inc.

Biogen Idec Inc.

Array BioPharma Inc. (mostly focused on oncology therapies) and Biogen Inc. are teaming up to discover and develop kinase inhibitors aimed at autoimmune disorders. (May)

The target and lead inhibitors of focus under the collaboration are the result of Array's Kinase-Directed Phenotypic Screening Platform, which utilizes phenotypic screening to identify kinase inhibitors in any therapeutic area. When potential candidates are discovered, Biogen will conduct clinical development and commercialization. It will also provide three years of R&D funding and pay Array development and commercial milestones and royalties. Array has used its technologies to create a pipeline of fifteen clinical-stage candidates, mostly for cancer. The company’s two lead compounds are in Phase III and being developed with Novartis (binimetinib) and AstraZeneca (selumetinib).

Asana BioSciences LLC

Endo International PLC

Endo Pharmaceuticals Inc.

Start-up Asana BioSciences LLC (affiliated with the Amneal Alliance of Companies) launched operations by acquiring an early-stage branded pipeline from Endo International PLC’s US division Endo Pharmaceuticals Inc. (Jun.)

Asana pays an up-front fee plus development milestones. The assets include pain, cancer, and anti-inflammatory candidates. Asana plans to start Phase I trials for oncology and pain compounds soon. The FDA has already approved Asana’s IND for a prostate cancer program. Sandeep Gupta, PhD, Asana’s CEO, was formerly Endo’s SVP of discovery and early development. Endo has been looking to off-load these assets since last year. The company has also recently divested HealthTronics (urological, renal, and cancer products) and HealthTronics Laboratory Solutions (anatomical pathology services). Endo will still focus on pharmaceuticals (later-stage and marketed drugs; the company recently closed a worldwide license to Zogenix’s Sumavel DosePro for migraine), plus generics (in this area, Endo just bought Mexican firm Grupo Farmaceutico Somar), and devices.

AstraZeneca PLC

Synairgen PLC

Respiratory drug developer Synairgen PLC granted AstraZeneca PLC exclusive global rights to SNG011, an inhaled interferon beta agonist for respiratory infections in patients with asthma and COPD. (Jun.)

AZ paid $7.25mm up front, and could hand over up to an additional $225mm in development, regulatory, and sales milestones, plus tiered single-digit to mid-teens royalties (Strategic Transactions assumes 1-15%). The Big Pharma is also responsible for all development costs. It plans to have SNG011 in a Phase IIa trial in patients with severe asthma during early 2015, with hopes of including those with COPD and other pulmonary diseases in the future. The compound was first discovered at the University of Southampton (Synairgen spun out of the entity in 2003), and Synairgen has been developing it to boost the lungs’ defenses against infection and prevent viral-induced asthma exacerbations. (The company notes that cells lining the airways of asthmatics are deficient in interferon beta, which could cause poor immune response and susceptibility to infection; 80% of asthma flares are linked to respiratory infections such as those brought on by the common cold virus.) Licensing discussions with AZ reportedly began months ago; the biotech was attracted to the Big Pharma’s strength in developing respiratory disease therapies and its asthma portfolio, which includes the well-known brands Accolate, Bricanyl Turbuhaler, Pulmicort, and Symbicort.

Bayer AG

Bayer HealthCare Pharmaceuticals AG

Dimension Therapeutics Inc.

Dimension Therapeutics Inc. (gene therapeutics for blood disorders) licensed Bayer HealthCare Pharmaceuticals AG exclusive rights to its preclinical hemophilia A gene treatment. (Jun.)

It’s been many years since Bayer last did a hemophilia deal. In 2008 the company acquired Factor VIIa, VIII, and IX programs from Maxygen (which folded last year), plus rights to the latter’s MolecularBreeding recombinant technology. Bayer’s own hemophilia A drug Kogenate was the Big Pharma’s top-selling product in 2013 (with €1.2bn ($1.6bn) in sales). In the new alliance, Bayer pays $20mm up front, $232mm in development and commercialization milestones, and tiered royalties. Dimension will run preclinical studies and the Phase I/IIa trial, all of which Bayer will fund. Depending on Phase I/IIa results, Bayer is responsible for the confirmatory Phase III trial plus regulatory submissions and marketing. Dimension provides gene transfer via recombinant adeno-associated virus (rAAV) vectors (collectively known as the NAV platform) licensed from ReGenX Biosciences last year. Dimension also has rights to ReGenX’s gene therapeutics, including the hemophilia A treatment now partnered with Bayer. This therapy introduces a version of the gene that encodes the clotting Factor VIII. Dimension concurrently closed its $30mm Series A round led by Fidelity and including OrbiMed (the company announced the opening of the round at the same time it launched operations in October 2013, but hadn’t disclosed the amount). Now that it has out-licensed its hemophilia A program to Bayer, Dimension is left with a hemophilia B candidate in IND-enabling studies, and two gene therapeutics for rare genetic diseases.

Bayer AG

Orion Corp.

Drug, device, and point-of-care diagnostics company Orion Corp. licensed Bayer HealthCare LLC worldwide rights to its Phase II oral androgen receptor inhibitor ODM201 for prostate cancer. (Jun.)

Bayer pays €50mm ($68mm) up front, cash milestones related to development, tech transfer, and commercialization goals, and tiered double-digit royalties. Later this year Bayer and Orion will launch a Phase III trial of ODM201 in non-metastatic, castration-resistant prostate cancer. The partners will share development expenses, but Bayer will shoulder the majority. Bayer is responsible for commercialization, while Orion will handle manufacturing. In addition, Orion retains a European co-promotion option. Under a 2011 agreement, Endo had a global license to ODM201 as part of a broader deal to market new oncology drugs, but in 2013 the companies terminated their deal, and all ODM201 rights reverted to Orion. In prostate cancer, Bayer markets the radiopharmaceutical Xofigo (licensed in 2009 from Algeta, which Bayer ending up buying late last year) for castration-resistant prostate cancer and other oncology indications. In the pipeline, the Big Pharma is testing the Phase I BAY2010112 prostate cancer antibody, gained through an option exercise from Micromet (now owned by Amgen).

BexPharm Korea Co. Ltd.

MediWound Ltd.

Fresh off of a $75mm IPO a few months ago, wound and burn care company MediWound Ltd. licensed BexPharm Korea Co. Ltd. (ob/gyn, dermatology, burn/wound, and surgery care therapies) exclusive rights to sell its NexoBrid burn treatment in South Korea, once the therapy is approved there. (May)

BexPharm is responsible for regulatory filings and will pay MediWound upon achievement of certain undisclosed distribution milestones. NexoBrid was launched in Europe last year and is currently in Phase III US trials. The treatment is applied topically to deep partial- and full-thickness burns and left on the site for four hours, during which time enzymes in the gel digest eschar, allowing it to be wiped off after treatment, and exposing a clean wound bed. NexoBrid is an attractive burn therapy option because it eliminates the need for autografts or surgical excisions. BexPharm will sell NexoBrid alongside its wound therapy Flaminal, an enzyme alinogel with broad spectrum antibacterial properties. Concurrent with the agreement, MediWound also announced two other new distribution partners for the treatment: Genfa Medica will sell it in Russia, and Tuteur SACIFIA will market in Argentina.

Bind Therapeutics Inc.

Roche

Roche and nanotechnology company Bind Therapeutics Inc. agreed to research and discover nanomedicine candidates delivered via the latter’s Accurins nanoparticles. The companies will explore all indications except cancer. (Jun.)

The exclusion of oncology from the tie-up is not surprising, as several years ago Roche began an initiative to expand its pipeline and portfolio beyond its historical focus on cancer to include other key areas such as neurodegenerative diseases, inflammation, and metabolic disorders. In fact, some of the Big Pharma’s most recent biopharma deals have been in infectious diseases, pain, and Parkinson’s. No licensing has taken place yet in the current collaboration, however Bind says that based on agreement’s success, the partners may expand the deal to include development and future commercialization. The current work involves combining Accurins with Roche’s therapeutic payloads and targeting ligands. Accurins are polymeric nanoparticles designed (via Bind’s Medicinal Nanoengineering platform) to stay in the bloodstream for a longer period of time to allow for controlled-release delivery of the therapeutic moiety directly to the diseased cells or tissues (but not healthy sites). To enable tissue targeting, the physical and chemical properties of the Accurins may be manipulated, while cellular targeting is achieved via specific ligands on the Accurins’ surfaces that bind to cell surfaces or other markers. Roche is the fourth big partner to validate BIND’s Accurin technology. Last year BIND signed three separate deals involving the platform with Amgen (kinase inhibitor against solid tumors), AstraZeneca (focused on the Aurora B kinase blocker AZD1152-hQPA), and Pfizer (option-based alliance).

bionomics Ltd.

Merck & Co. Inc.

Bionomics Ltd. (cancer and CNS disease therapies) licensed Merck & Co. Inc. exclusive worldwide rights to preclinical BNC375 for cognitive dysfunction associated with Alzheimer’s and other neurological conditions. (Jun.)

In addition to covering all development costs, Merck paid $20mm up front and could pay up to $506mm in research and development milestones, plus royalties. BNC375 is an alpha-7 nicotinic receptor agonist that has potential to improve memory and cognition in patients with Alzheimer’s and Parkinson’s diseases, as well as multiple sclerosis, schizophrenia, and ADHD. Bionomics will use its ionX high-throughput electrophysiology drug discovery platform to further evaluate and validate the compound. The deal is the second between the partners in less than a year. In July 2013, Merck optioned rights to candidates for pain (including neuropathy) discovered by Bionomics using ionX and the MultiCore chemistry platforms. That collaboration could get Bionomics up to $172mm in option fees and development and regulatory milestones.

Bristol-Myers Squibb Co.

CytomX Therapeutics Inc.

CytomX Therapeutics Inc. (next-generation, targeted antibodies) licensed Bristol-Myers Squibb Co. exclusive worldwide rights to discover, develop, and sell Probodies interacting with up to four immuno-oncology targets, including cytotoxic T-lymphocyte antigen-4 (CTLA-4). (May)

The alliance is one of several collaborations BMS has forged recently in the immunotherapeutics area. The company signed agreements with both Celldex and Incyte to combine the Big Pharma’s Phase III PD-1 immune checkpoint inhibitor nivolumab with the biotechs’ cancer drug candidates. And a couple months ago BMS established an immune checkpoint discovery deal with Five Prime Therapeutics. CytomX says it is likely that combinations will also likely be tested in the current collaboration. BMS pays $50mm up front; research funding; undisclosed preclinical milestones; up to $298mm in development, regulatory, and sales milestones per target; and royalties ranging in the mid-single-digits to low-double-digits (Strategic Transactions assumes 5-29%). BMS, which will lead preclinical studies, has the right to substitute up to two of the targets. A Probody is a type of monoclonal antibody fitted with a peptide mask, which is removed within the tumor microenvironment when disease-associated, dysregulated proteases cleave the substrate. The result is that the antibody’s therapeutic effect is activated only at the tumor site. In healthy tissue, a Probody is inert and therefore doesn’t cause the systemic damage seen with traditional antibodies. CytomX has previously worked with Pfizer and ImmunoGen on Probody-drug conjugates for cancer. Based on the monies from the present tie-up, CytomX believes it has enough funding until 2016.

Cardio3 BioSciences Asia Holdings Ltd.

Cardio3 BioSciences SA

Celyad SA (developing cardiovascular cell therapies) formed a joint venture with Hong Kong investment firm Medisun International Ltd. called Cardio3 BioSciences Asia Holdings Ltd. to conduct in China, Hong Kong, and Taiwan Phase III trials of Cardio3’s C-Cure heart failure treatment. (Jun.)

Medisun concurrently invested €25mm ($33.8mm) in Cardio3 BioSciences SA for an 8% stake in the firm. It may purchase up to €25mm in additional shares over the next eight months. The JV takes on Cardio3’s C-Cure IP, Belgium manufacturing facility, and clinical expertise. In addition to the financing, Medisun is paying a minimum of €20mm over a three-year period to fund the clinical trials, as well as contributing its clinical and regulatory knowledge. Cardio3 will own 40% of the JV, but will have a 30% stake once trials are running in the three territories. Cardio3 BioSciences Asia will commercialize C-Cure and receive 20-30% royalties based on total revenues. The FDA has approved a trial (CHART-2) for the C-Cure cell therapy designed to study its efficacy as a treatment for ischemic heart failure of ischemic origin.

Cellectis SA

Pfizer Inc.

Pfizer Inc. and oncology firm Cellectis SA teamed up to develop chimeric antigen receptor T-cell (CAR-T) cancer immunotherapies aimed at 15 targets selected by the Big Pharma and 12 targets chosen by Cellectis. (Jun.)

Pfizer has exclusive rights to develop and commercialize CAR-T therapies directed at its own targets. Cellectis will help with preclinical work. Cellectis is solely responsible for clinical development and commercialization for all 12 of its targets, but Pfizer will help conduct preclinical research on four, to which Pfizer has rights of first refusal. Under the agreement, Cellectis receives $80mm up front; R&D funding for all Pfizer targets and the four Cellectis targets; up to $185mm in development, regulatory, and commercial milestones per Pfizer therapy; plus tiered sales royalties on the Big Pharma’s products. Upon approval by two-thirds of Cellectis’ stockholders, Pfizer will also purchase 10% of the company’s shares at $12.54 (€9.25; a 43% premium). Should the equity sale not be approved, Pfizer can opt to terminate the deal altogether. Cellectis’ CAR-T technology uses engineered T-cells from a single donor for use in multiple patients to create unique therapies that cannot be gained using autologous methods, which engineer a patient’s own T-cells to target tumor cells. France-based Cellectis plans to open a US facility so it can more closely work with Pfizer scientists. Four months ago, Cellectis granted Servier SA options for exclusive rights to up to six of its preclinical cancer projects developed using CAR-T.

Debiopharm Group

Orient Europharma Co. Ltd.

Asian pharmaceutical firm Orient EuroPharma Co. Ltd. licensed exclusive rights to sell Debiopharm Group’s prostate cancer treatment Pamorelin (triptorelin) in Southeast Asia, including Singapore, where the product will launch immediately. (May)

Pamorelin is a gonadotropin-releasing hormone receptor agonist analog that is available in three sustained-release formulations (over one, three, and six months), and is sold globally under the additional brands Trelstar and Decapeptyl. Debiopharm will manufacture and export Pamorelin to Orient, and Orient will market it mainly to urologists and oncologists for the treatment of locally advanced or metastatic hormone-dependent prostate cancer. The product brings in over $400mm in global sales through marketing partners including Ipsen, Ferring, Actavis, Vifor, and Dr. Reddy’s. Orient's other main cancer offerings are Navelbine (vinorelbine tartrate) for non-small cell lung and metastatic breast cancers, and Kytron IV for nausea and vomiting related to radiation therapy or surgery.

GCA Therapeutics Ltd.

Neurotez Inc.

Neurotez Inc. (Alzheimer’s therapeutics) licensed spec pharma GCA Therapeutics Ltd. exclusive rights to develop and sell in China (excluding Hong Kong) and Taiwan its preclinical leptin derivatives for Alzheimer’s disease and other cognitive disorders. (May)

Neurotez says it plans to continue to partner the leptin agents regionally. The company will receive $102.5mm in commercialization milestones plus royalties. GCA must meet certain annual sales goals following the first commercial sales in China. The leptin candidates are recombinant human forms of the adipocyte hormone leptin, levels of which are often decreased in AD patients. Previous research on leptin’s mechanism has found that it inhibits beta-amyloid and tau phosphorylation. Leptin was approved earlier this year in the US, and in 2013 in Japan, under the name Myalept (BMS/Amylin) for generalized lipodystrophy, a fat redistribution disorder in HIV patients. GCA is based in the US, but focuses on in-licensing compounds from the Western world to sell in China via T&T Pharma, its joint venture with the Tianjin Institute of Pharmaceutical Research. GCA plans to build a portfolio covering oncology, cardiology, neurology, infectious disease, and immunology. The company also holds rights in China, Hong Kong, and Taiwan to Achillion Pharmaceuticals’ Phase II nucleoside reverse transcriptase inhibitor elvucitabine for HBV and HIV.

Inception 5

Inception Sciences Inc.

Roche

Roche signed an exclusive funding and option-to-acquire deal with Inception Sciences Inc. (incubator involved in drug discovery) and its new spin-off Inception 5 Inc., focused on multiple sclerosis. (Jun.)

The Big Pharma will fund Inception 5’s research upon achieving certain milestones, and holds an exclusive option to buy the start-up once it submits an IND for a lead candidate. Inception 5, which concurrently received financing from Versant Ventures, will employ a remyelination screening platform--invented by the University of California, San Francisco’s Jonah Chan, PhD--to develop small molecules (from Roche’s libraries as well as newly discovered agents) against multiple molecular targets to promote generation of myelin sheaths around axons, a process that is lost in MS. In the MS area, Roche is already working on the Phase III antibody ocrelizumab (RG1594) for primary progressive and relapsing forms of the disease. This is the second time that Roche has teamed up with Inception Sciences and Versant on a new venture. In October 2012 the Big Pharma agreed to fund Inception 3’s research into small molecules for sensorineural hearing loss, and similarly holds an option to acquire when Inception 3 files its first IND. Since 2011, Inception has spun off three other start-ups in partnership with and funding from Versant. The other companies are focusing on oncology, neurodegenerative diseases, and ophthalmology (the CNS-focused Inception 1 is collaborating with Shire, while the ophthalmic one Inception 4 is working with Bayer).

Johnson & Johnson

Janssen Pharmaceuticals Inc.

Vertex Pharmaceuticals Inc.

Vertex Pharmaceuticals Inc. licensed Janssen Pharmaceuticals Inc. exclusive rights to develop, manufacture, and commercialize VX787, which is currently in Phase IIa for influenza A including H1 (pandemic) and H5 (avian) strains; plus a back-up compound VX353; and others. (Jun.)

Vertex receives $30mm up front and could get development and commercialization milestones and sales royalties. Janssen is responsible for all development and commercialization activities. VX787 is an oral polymerase inhibitor designed to directly block replication of all influenza A strains tested, including those demonstrating resistance to Genentech Inc.’s Tamiflu (oseltamivir). With its unique mechanism of action, VX787 shows promising potential as an alternative to neuraminidase inhibitors, the most common flu treatment. Earlier this year Vertex announced it was seeking collaborators to advance clinical development of the compound and other non-core candidates so it can focus on its cystic fibrosis pipeline. Last month the firm said it was no longer investing in hepatitis C and handed back Alios BioPharma rights to VX135 (ALS2200).

Ligand Pharmaceuticals Inc.

TG Therapeutics Inc.

Ligand Therapeutics Inc. (acquires and develops royalty-generating assets across a wide variety of indications) granted oncology company TG Therapeutics Inc. exclusive worldwide rights to its preclinical Interleukin-1 receptor associated kinase-4 (IRAK-4) inhibitor program for use in cancer and immune disease treatments. (Jun.)

TG issued 125k of its common shares (valued at $1mm) to Ligand as an up-front fee, and could pay up to $207mm in development, regulatory, and commercialization milestones. The agreement also includes tiered royalties: 6% for annual sales up to $1bn, 9.5% for sales in excess of $1bn, and 4% (subject to increase or decrease) for licensed products not covered by Ligand’s patents. IRAK-4 is a signaling component involved in the regulation of innate immunity and inflammation. The kinase is overexpressed in tumors that carry the MYD88 mutation, including B-cell lymphomas, non-Hodgkin’s lymphoma, and chronic lymphocytic leukemia, and could also have implications in autoimmune diseases. The program is highly complementary to TG Therapeutics’ pipeline, and will be developed alongside its blood cancer candidates TG1101 (an anti-CD20 mAb in Phase II) and TGR1202 (a PI3K inhibitor in Phase I). The deal is the third for Ligand in two months. In May, it entered into collaborations with Viking Therapeutics, in which Ligand granted Viking exclusive global rights to five projects in exchange for up to $337.5mm, plus sales milestones; and it also granted AZ’s Omthera Pharmaceuticals exclusive worldwide rights to its LTP prodrug drug delivery technology.

MacroGenics Inc.

Takeda Pharmaceutical Co. Ltd.

MacroGenics Inc. (monoclonal antibodies for cancer and autoimmune diseases) granted Takeda Pharmaceutical Co. Ltd. an option for exclusive global rights to its preclinical autoimmune disease candidate MGD010. (May)

MacroGenics received $15mm up front, and if Takeda exercises its option (which could occur following a Phase Ia study conducted by MacroGenics), an additional $18mm could be realized, including an option exercise fee and an early development milestone. Takeda could also pay up to $468.5mm in clinical, regulatory, and sales milestones, plus double-digit royalties. MacroGenics retains an option to co-promote in the US, and if it decides to fund a portion of Phase III trials of the bispecific antibody, would also benefit from profit sharing in North America. MacroGenics designed MGD010 through its Dual-Affinity Re-Targeting (DART) platform, which allows for the targeting of multiple antigens or cells with a single molecule that has an antibody-like structure. MGD010 simultaneously targets two B-cell surface proteins--CD32B and CD79B--to modulate B-cell function (blocking the B cells that promote autoimmune disease activity) without depleting the B cells all together. The compound is MacroGenics’ first DART project for autoimmune diseases that is headed for clinical development. The company is also working on earlier-stage candidates for the indication under a broad 2010 alliance with Boehringer Ingelheim (up to ten combinations of targets, initially for immune disorders and potentially extending to other diseases). The majority of MacroGenics’ tie-ups for DART programs focus on cancer, with partners including Servier, Pfizer, and Gilead.

Medison Pharma Ltd.

uniQure BV

Gene therapy firm uniQure NV licensed Israeli firm Medison Pharma Ltd. exclusive rights to distribute its orphan drug Glybera (alipogene tiparvovec) for lipoprotein lipase deficiency (LPLD) in Israel and the Palestinian Authority. (May)

Medison will handle regulatory activities in the licensed territories. Glybera is the first gene therapeutic ever approved; it was cleared in the EU in November 2012. LPLD is a rare disorder caused by a mutation in the gene that codes lipoprotein lipase, resulting in the inability to effectively break down fatty acids in the body. Under a mid-2013 deal, Chiesi Farmaceutici SPA exclusively markets Glybera in Europe, Brazil, Mexico, Pakistan, Turkey, Russia, the CIS, and China.

Merck KGAA

EMD Serono Inc.

Mersana Therapeutics Inc.

Merck KGAA’s EMD Serono Inc. entered into an agreement with Mersana Therapeutics Inc. (antibody-drug conjugates) to develop ADCs for cancer using Mersana’s Fleximer technology. (Jun.)

Financials weren’t detailed, though industry sources cite an undisclosed Mersana spokesperson stating up-front and milestones could hit $792mm. Fleximers are biodegradable polymers that can be linked to drug payloads and then attached to an antibody. The conjugate then remains stable throughout the bloodstream, and is designed to release the cytotoxic drug ingredient once the compound is inside the targeted tumor. EMD Serono will provide monoclonal antibodies, and Mersana will generate the ADCs. Mersana is responsible for discovery and preclinical development, after which point EMD Serono gets exclusive development and commercialization rights from Mersana. The Fleximer platform was the center of Mersana’s April 2014 alliance with Takeda Oncology Mersana also counts Endo Pharmaceuticals and Teva as key partners for the technology.

Merck KGAA

Merck Serono SA

MorphoSys AG

Therapeutic antibody firm MorphoSys AG will use its Ylanthia fragment antigen-binding (Fab) library to identify antibodies against immune checkpoints for Merck KGAA’s Merck Serono SA. (Jun.)

Ylanthia, an antibody Fab library that contains over 100bn distinct fully human mAbs, uses 36 fixed, naturally-occurring heavy and light chain framework combinations for highly increased structural diversity. MorphoSys will co-fund R&D costs (with the ability to opt-out at certain stages) and receives development and sales milestones, plus royalties that will take into account the co-funding. Merck, which takes over development after Phase I and will have all rights to projects resulting from the deal, looks forward to boosting its immuno-oncology pipeline. The company has two Phase I immunotherapies (MSB0010360 for solid tumors and MSB0010718C for stomach cancer), MSB0010445 in Phase II for melanoma, and in April of this year, commenced Phase III trials with tecemotide for lung cancer. (Tecemotide was formerly known as Stimuvax, which previously failed Phase III in the indication in late 2012.) MorphoSys’ other Ylanthia partners include Heptares and Novartis; MorphoSys originally agreed in 2004 to use its HuCAL antibody technology to generate and optimize antibodies for Novartis, but the deal was expanded in 2012 to include Ylanthia.

Mission Pharmacal Co.

Retrophin Inc.

Retrophin Inc. (rare-disease drugs) licensed US rights to Mission Pharmacal Co.’s (dermatology, women's health, urology, pediatric therapies) kidney stone treatment Thiola (tiopronin). (May)

Thiola originated at Santen Pharmaceutical, and was approved by the FDA in the late 1980s to treat cystinuria, a genetic cystine transport disorder that results in high levels of the amino acid cystine in the urine and recurring kidney stones. The drug is recommended for the prevention of cystine/kidney stones in patients who cannot comply with diet modifications and increase in fluid intake, and in those who cannot take the chelating agent d-penicillamine. The deal marks the launch of Retrophin’s first salesforce; the company’s portfolio already includes two marketed drugs (Chenodal for gallstones and Vecamyl for hypertension), but those two were taken on through the acquisition earlier this year of Manchester Pharmaceuticals. Through the new sales channel, Retrophin hopes to build relationships with nephrologists in preparation for upcoming renal therapies in its pipeline. The company has sparsentan in Phase II for focal segmental glomerulosclerosis (a severe form of nephropathy), and is also working on preclinical studies with RE034 for nephrotic syndrome.

Nestle SA

Galderma SA

Valeant Pharmaceuticals International Inc.

On the same day it upped its bid for Allergan from $45bn to $49bn, Valeant Pharmaceuticals International Inc. announced it is selling to Nestle SA's Galderma SA subsidiary all rights to the aesthetic dermatology products Restylane, Perlane, Emervel, Sculptra, and Dysport for $1.4bn in cash. (May)

Galderma was a 1981 50-50 dermatology joint venture between Nestle and L’Oreal SA, and just three months ago Nestle took full ownership. Restylane and Perlane are hyaluronic acid-based products used in correcting moderate-to-severe facial wrinkles and folds by adding volume and fullness to the skin. Emervel, also a line of hyaluronic acid dermal fillers, is designed to smooth away facial lines, restore volume, or enhance the lips. Dysport (botulinum toxin A) injection is for use in patients under the age of 65 who are looking to reduce moderate-to-severe glabellar lines. Sculptra is a poly-L-lactic acid for treating facial lipoatrophy associated with HIV and for cosmetic indications in immune-competent patients. Valeant gained Restylane, Perlane, Emervel and Dysport (originated by Ipsen and sold as Azzalure in Europe) through its $2.6bn purchase of Medicis Pharmaceutical in 2012, at which time Valeant expressed its interest in becoming a leading dermatology player and rival to Allergan and Galderma. Galderma already manufactures and sells the four products outside of North America under a previous agreement with Medicis, and now Galderma will add the US and Canada. Sculptra, a fully owned Valeant product, will now be sold and supplied by Galderma worldwide. Valeant is offing these assets because they raised antitrust concerns in connection with the Allergan takeover due to a strong overlap in its aesthetics portfolio. Specifically, the four injectable dermal fillers compete with Allergan’s Juvadérm line, and Dysport contends with Botox. Investment Banks/Advisors: Credit Suisse Group (Galderma SA)

Novartis AG

Servier SA

Servier SA and Novartis AG penned a worldwide co-development agreement for Bcl-2 selective inhibitors that are entering Phase I for cancer. (May)

Servier will conduct research, while both parties are responsible for clinical development and will share regional commercialization rights. Pro-survival Bcl-2 regulates apoptosis: depending on different forms of intracellular stress, the protein directs the survival or destruction of a cell in tandem with other Bcl-2 family members. The receptor is highly expressed in tumor cells, and when it is dysfunctional, tumors are allowed to survive. The compounds came out of Servier’s partnership with Vernalis. The companies first teamed up in 2007 in a drug discovery deal using Vernalis’ fragment-based technology to identify the crystal structure of Servier-chosen target and ligands to that target. Two years later they signed a second agreement around a separate oncology target, and in 2012 entered a third collaboration for another undisclosed cancer target. Servier says Bcl-2 blockers represent a new mode of action to address oncology in its pipeline, aside from HDAC and kinase inhibitors, and immunotherapeutics. In the last year the company has received options on six Cellectis candidates, including an allogenic CD19 T-cell therapy, as well as Nerviano’s TTK/MPS1 inhibitors. Meanwhile, Novartis continues to build strength in oncology less than a month after paying $14.5bn up front for GSK’s cancer portfolio and other assets.

Pfizer Inc.

X-Chem Inc.

Small-molecule drug developer X-Chem Inc. agreed to use its drug discovery capabilities to identify leads against various inflammatory and orphan disease targets provided by Pfizer Inc. (Jun.)

The Big Pharma gets an exclusive option to license any resulting compounds. X-Chem’s DNA-encoded small-molecule library uses DNA tagging to record a molecule’s synthetic history and chemical structure during combinatorial synthesis processes. Because the compounds have “barcodes,” they can easily and quickly be identified through DNA sequencing during drug target screening. X-Chem signed a similar agreement with Roche in 2010.

Sorrento Therapeutics Inc.

Concortis Biosystems Inc.

Eisai Co. Ltd.

Morphotek Inc.

Sorrento Therapeutics Inc. (oncology) agreed to generate and develop antibody-drug conjugates (ADCs) for Eisai Co. Ltd.’s Morphotek Inc. (antibodies for cancer, inflammation and infectious diseases) in an option deal that could garner up to $50mm in undisclosed milestones for Sorrento. (Jun.)

Morphotek will also pay research fees, an up-front fee, and royalties. Sorrento and its Concortis Biosystems Inc. division (acquired in December 2013) will use the latter’s ADC technologies together with a Morphotek antibody and a chemotherapeutic agent to design cancer treatments. Concortis’ K-Lockk platform is based on selective lysine conjugation, and allows for consistent site-specific drug conjugation, while the C-Lockk technology stabilizes the ADC and prevents the drug payload from being released early and causing toxic side effects. Morphotek traditionally uses its two unique morphogenics technologies to generate antibodies: Morphodoma incorporates an ex vivo immunization process in combination with morphogenics for antibody generation, while the Libradoma platform generates hybridoma libraries that can be screened to identify fully human mAbs.

Financings

Acorda Therapeutics Inc.

CNS-focused Acorda Therapeutics Inc. netted $293.6mm through the public sale of 1.75% convertible senior notes due 2021. The debt converts at 23.4968 common shares per $1k principal amount of notes, or approximately $42.56 per Acorda share (the company's shares are averaging $34.71). Acorda will use the proceeds for general corporate purposes including the funding of potential future acquisitions. (Jun.)

Investment Banks/Advisors: JP Morgan Chase & Co.

Actinium Pharmaceuticals Inc.

Actinium Pharmaceuticals Inc. (developing targeted radiopharmaceuticals in combination with mAbs for cancer) netted $11.6mm through the public sale of 1.67mm common shares at $7.50. The company will use some of the proceeds to advance lead projects through clinical trials, including Iomab-B (entering Phase III as a preparatory agent for hematopoietic stem cell transplant in acute myeloid leukemia patients) and Actimab-A (Phase I/II for AML). (Jun.)

Investment Banks/Advisors: Canaccord Genuity Inc.; Laidlaw & Co.; MLV & Co.

Ambrx Inc.

Ambrx Inc. (clinical-stage biotech developing bio-conjugates) filed for its IPO on Nasdaq. (May)

The San Diego-based biotech is developing optimized protein therapeutics, known as bio-conjugates, which selectively deliver drugs to a target to reduce damage to non-cancerous cells. The company’s pipeline includes antibody and bi- and multi-specific drug conjugates, and long-acting therapeutic proteins. ARX788, the company’s most advanced antibody drug conjugate (ADC) for cancers expressing human epidermal growth factor 2, will begin clinical trials in early 2015. ARX201, Ambrx’s most advanced long-acting protein, a once-weekly human growth hormone, completed Phase IIb trials. Other candidates in preclinical assessment include: ADCs for metastatic castration-resistant prostate cancer, glioblastoma, renal, and nasopharyngeal cancers, a bi-specific anti-CD3 X folate for ovarian cancer, and CD184-FK506 for immunological diseases. Ambrx’s technologies include ReCODE for long-acting therapeutic proteins (bacterial platform) and EuCODE for ADCs (mammalian platform). Ambrx has over 100 issued and pending US patents and over 500 outside of the US. The company has numerous Big Pharma collaborations that have together generated over $200 million in non-dilutive funding, including three deals with Bristol-Myers, a $300 million deal with Astellas Pharma, a $300 million deal with Merck, and a collaboration with Eli Lily’s Elanco Animal Health for a long-acting protein that is expected to reach the market by 2015. Ambrx’s growth strategy is to submit one IND every 12-18 months beginning in 2016, create new product candidates using ReCODE and EuCODE, enter into additional collaborations, and expand intellectual property. The company--which was founded by a strong management team, including Peter G. Schultz, founder of Ilypsa, Kalypsys, Syrxx, and Phenomx--has raised over $100mm to date in equity financing.

June 2014 update: Ambrx withdrew its IPO due to current public market conditions.

Investment Banks/Advisors: Canaccord Genuity Inc.; Needham & Co. Inc.; Roth Capital Partners; Stifel Nicolaus & Co. Inc.; Wells Fargo Securities LLC

Amphastar Pharmaceuticals Inc.

Amphastar Pharmaceuticals Inc. (injectable and inhalable drugs) netted $38mm in its initial public offering. The company sold 5.8mm shares (including the overallotment) and priced below its range at $7 (it had planned to offer 7.4mm shares for $10-12). (Jun.)

Amphastar, which was founded in 1996, manufactures 15 specialty and generic injectable and inhalable products. The company's portfolio, available in the US, includes an enoxaparin sodium injection, used as an anticoagulant and for deep vein thrombosis (generic version of Sanofi’s Lovenox). Enoxaparin is the largest of the company’s products by revenue. Other marketed medicines include Cortrosyn, a lyophilized powder used as a diagnostic agent for adrenocortical insufficiency; topical anesthetic lidocaine formulations; emergency pre-filled syringes; and phytonadione vitamin K injection for newborn use. Amphastar is developing 13 generic and seven proprietary injectable/inhalable drugs and has filed three ANDAs, one NDA, and one sNDA with the FDA. The company had a May 2014 PDUFA date (received a complete response letter on May 22 requiring additional non-clinical information, label revisions, and follow-up studies) for its Primatene Mist HFA, an OTC epinephrine inhalable for mild asthma, and in December 2013 filed an NDA supplement for Amphadase, a bovine sourced hyaluronidase injection. Acquisitions are a part of core growth in inhalation/injectables, and in April 2014, Amphastar acquired Merck’s French API manufacturing business, which produces porcine and recombinant insulin API. Amphastar initially filed for an IPO in February 2005, however later that year withdrew its filing. Investment Banks/Advisors: BMO Financial Group; Jefferies & Co. Inc.; Needham & Co. Inc.; Piper Jaffray & Co.

Ardelyx Inc.

Ardelyx Inc. (developing therapies for cardiorenal, gastrointestinal, and metabolic diseases) netted $64.2mm in its initial public offering of 4.93mm common shares (including the overallotment) at $14 each. The company had planned to sell 3.6mm shares priced between $13 and $15 each. (Jun.)

The seven-year-old firm uses its platform--the Ardelyx primary enterocyte and colonocyte culture system (APECCS)--to rapidly and cost-effectively identify and develop compounds that work exclusively in the GI tract, targeting receptors and transporters to modulate key gut functions while avoiding systemic toxicities. Ardelyx has signed two deals with Big Pharmas. In October 2012 it granted AstraZeneca PLC exclusive global rights to Phase II tenapanor, a sodium-hydrogen antiporter-3 inhibitor for end-stage renal and chronic kidney diseases. (Ardelyx recently received a $25mm milestone payment from AZ triggered by the commencement of a Phase IIb trial.) Earlier this year, the company licensed Sanofi worldwide rights to its phosphate transport NaP2b inhibitor program, including lead preclinical candidate RDX002. Under both agreements, Ardelyx kept a US co-promote option. The company also has early-stage candidates for inflammatory bowel disease, hyperkalemia, and fluid overload. Some of the IPO funds will help R&D activities, including expanding the development of APECCS. And if Ardelyx exercises its right to co-fund the first Phase III trial of tenapanor, it may invest some of the money to increase the royalties it would receive from AZ. Ardelyx is backed by New Enterprise Associates, CMEA Capital, Amgen Ventures, and individuals including company co-founder Dr. Jean M. Frechet of the University of California, Berkeley and Dr. Peter G. Schultz (Scripps Research Institute and Novartis Research Foundation). For FYE 2013, Ardelyx reported $28.9mm in revenues, and at the end of March 2014 it had $33.2mm in cash and equivalents. Investment Banks/Advisors: Citigroup Inc.; JMP Securities LLC; Leerink Partners LLC; Wedbush PacGrow Life Sciences

arGEN-X BV

Dutch antibody drug discovery company arGEN-X NV filed for its IPO on Euronext Brussels. (Jun.)

ArGEN-X uses its SIMPLE Antibody platform to generate antibodies in out-bred llamas, since these animals are able to produce high-affinity antibody responses, including those that are human/mouse cross-reactive, against any target. The company further optimizes antibodies using NHance (prolongs antibody circulation time and improves tissue distribution), ABDEG (alters binding and clearance of antibodies from systemic circulation), and Potelligent (enhances antibody-dependent cellular cytotoxicity; nonexclusively licensed from BioWa). SIMPLE Antibody is the subject of two major collaborations. This month, Shire and arGEN-X expanded their 2012 alliance covering rare genetic diseases. And in May 2014, arGEN-X penned a deal with Bayer in multiple indications. The Dutch biotech also forged a pilot research program with Boehringer Ingelheim earlier this year. ArGEN-X’s in-house pipeline is led by ARGX110, a CD70 immune checkpoint inhibitor in Phase Ib for hematological cancers (lymphomas and leukemias) and solid tumors. The antibody is also expected to be tested in autoimmune diseases and, via a collaboration with the Leukemia & Lymphoma Society, in Phase II for Waldenstrom’s macroglobulinemia (a rare lymphoma). The firm’s next most-advanced candidate is ARGX111, a c-Met antagonist in Phase Ib for solid and blood cancers, and its preclinical programs include treatments for other cancers and autoimmune diseases including atopic dermatitis. ArGEN-X has raised close to $62mm through its Series A and B rounds since it was founded in 2008. Investment Banks/Advisors: KBC Securities; Kempen & Co.; Petercam Group; Wedbush PacGrow Life Sciences

Ariad Pharmaceuticals Inc.

Ariad Pharmaceuticals Inc. (marketed product is Iclusig (ponatinib) for chronic myeloid leukemia) netted $177mm through the private sale of $200mm aggregate amount of its 3.625% senior notes due 2019. The notes convert to common at 107.5095 shares per $1k principal amount, or $9.30 per share. Ariad's stock was averaging $6.59 at the time of the sale. (Jun.)

BioCryst Pharmaceuticals Inc.

BioCryst Pharmaceuticals Inc. (infectious and rare diseases)netted $108.1mm through the follow-on public offering of 11.5mm common shares (including the overallotment) at $10 each. Proceeds will help fund ongoing trials of its Phase IIa BCX4161 for hereditary angioedema, development of second-generation HAE compounds, and commercial activities for its influenza drug peramivir. (May)

Investment Banks/Advisors: HC Wainwright & Co.; JMP Securities LLC; JP Morgan Chase & Co.; Mizuho Bank Ltd.; Noble Financial Group; Piper Jaffray & Co.; Wells Fargo Securities LLC

BrainStorm Cell Therapeutics Inc.

BrainStorm Cell Therapeutics Inc. (autologous stem cell therapeutics for neurodegenerative diseases) netted $9.7mm by selling 42mm shares at $0.25 (a 17% discount) to private investors, including some health care-focused funds. Buyers also received three-year warrants to purchase 42mm shares for $0.35. (Jun.)

The placement agent was Maxim Group. BrainStorm will use some of the proceeds to fund its Phase II trial of NurOwn in amyotrophic lateral sclerosis. NurOwn, an orphan drug candidate licensed from Ramot at Tel Aviv University, is a cell transplant that induces differentiation of bone marrow-derived mesenchymal stem cells into neuron-supporting cells, which prompt the release of several types of neurotrophic factors that support development of neurons. Investment Banks/Advisors: Maxim Group LLC

Cardio3 BioSciences SA

Nearly one year after going public, Celyad SA (cardiovascular cell therapies) raised €25mm ($33.8mm) through a two-tranche financing of shares for €44 each (a 6% premium) to Hong Kong investment firm Medisun International, giving it an 8% stake. (Jun.)

Concurrently, Cardio3 and Medisun created a joint venture to conduct Phase III trials of the company’s C-Cure heart failure therapy in China, Hong Kong, and Taiwan. Medisun may purchase up to €25mm in additional Cardio3 shares over the next eight months.

Cesca Therapeutics Inc.

Regenerative medicine firm Cesca Therapeutics Inc. netted $10.4mm through the follow-on public sale of 7.53mm units priced at $1.50 each. Together, the units are comprised of 7.53mm common shares and five-year warrants to purchase another 2.26mm shares--one warrant can buy 0.30 of a share--exercisable at $1.55. Some of the proceeds will support clinical development of stem cell candidates for critical limb ischemia, acute myocardial infarction, and bone marrow transplant. (Jun.)

Investment Banks/Advisors: HC Wainwright & Co.; Maxim Group LLC

China Biologic Products Inc.

Nasdaq-traded China Biologic Products Inc. (human plasma products), a Beijing-headquartered biopharma company, netted $29.2mm in a follow-on offering of 800k shares at $38. (Selling stockholders sold 750k shares.) (Jun.)

The company was founded in 1989 as a nonmedical entity. After several name changes and a reverse-merger with public shell company Logic Express in 2006 (grabbing LE's OTC listing as a vehicle to go public), CBPI adopted its current name in 2007 and was listed on Nasdaq in 2009. It has over 20 different dosages of plasma-based raw materials--including human albumin, immunoglobulin for intravenous injection, and coagulation factor--sold in China through its Shandong Taibang and Guizhou Taibang subsidiaries. CBPI’s products are used in hospital emergency rooms and also in vaccinations to prevent and treat fatal and immune-deficiency-related diseases. CBPI generated sales of $203.4mm in 2013. Investment Banks/Advisors: Aegis Capital Corp.; Morgan Stanley & Co.

Cytori Therapeutics Inc.

Cytori Therapeutics Inc. netted $9.6mm through the private sale of 4mm common shares at $2.47 (4% premium). Investors also received five-year warrants to purchase 4mm shares at $3. WBB Securities was the placement agent. (May)

Cytori is developing adipose-derived regenerative cell therapies for chronic heart failure, burn care, soft tissue injuries, and sports medicine/orthopedics. Some of the proceeds from the financing will go toward the continued development and marketing of its Celution system for the extraction and concentration of regenerative cells and stem cells from adipose tissue. Investment Banks/Advisors: WBB Securities LLC

DARA BioSciences Inc.

Midatech Pharma US Inc. (cancer supportive care; treatments for side effects of radiation and chemotherapy) netted $11.5mm through the public sale of 12.5k units at $1k apiece. Each unit consisted of one Series C-1 preferred share (equal to 900.9 common shares with a conversion price of $1.11 each; the market average at the time of the sale was $1.26); a five-year warrant to purchase 450.5 common shares for $1.67; and a 13-month warrant to buy 450.5 common at $1.67. (May)

Ladenburg Thalmann and HC Wainwright were the placement agents. Proceeds will fund commercial activities surrounding a shared sales force agreement between DARA and Mission Pharmacal (Mission's Alamo Pharma Services division markets three of DARA's products, and three of Mission's), and will also help DARA pursue next steps for its Phase II candidate KRN5500 for chronic chemotherapy-induced peripheral neuropathy. Investment Banks/Advisors: HC Wainwright & Co.; Ladenburg Thalmann & Co. Inc.

GW Pharmaceuticals PLC

GW Pharmaceuticals PLC (cannabinoid-derived drug candidates for multiple diseases) netted $97.9mm in a follow-on public offering of 1.2mm American Depository Shares (representing 14.4mm ordinary shares) for $86.83. Selling stockholders also offered 500k ADSs. (Jun.)

The company will spend $30mm on each of the following: US pre-launch plans for Epidiolex; expansion of manufacturing and inventory of the candidate (which is in Phase II/III for Dravet and Lennox-Gastaut syndromes); and development of early-stage programs, including those for orphan diseases. Investment Banks/Advisors: Bank of America Merrill Lynch; Cowen & Co. LLC; Morgan Stanley & Co.; Piper Jaffray & Co.

Heron Therapeutics Inc.

Heron Therapeutics Inc. (formerly AP Pharma; polymer-based drug delivery) netted $56mm through its latest public offering. The company sold 4.5mm common shares at $11.75, and also received proceeds from the concurrent sale of 600k pre-funded warrants at $11.74. (The seven-year warrants are exercisable at $0.01.) (Jun.)

Investment Banks/Advisors: Brean Capital LLC; JMP Securities LLC; Jefferies & Co. Inc.; Leerink Partners LLC; Noble Financial Group

Horizon Pharma Inc.

Horizon Pharma PLC (therapeutics for pain, arthritis, and inflammation) entered into a five-year $300mm senior secured credit facility with affiliates of Citigroup Global Markets and Cowen & Co. The funds will support the cash portion of Horizon's $660mm cash/stock acquisition of Vidara Therapeutics Research Ltd.; the current agreement replaces one that Horizon had previously signed with Deerfield Management for $250mm. (Jun.)

Investment Banks/Advisors: Citigroup Inc.; Cowen & Co. LLC

IGI Laboratories Inc.

Teligent Inc. (generic topical anti-fungal and anti-inflammatory products, and contract drug, OTC, and cosmetic manufacturing services) netted $22mm in a follow-on public offering of 4.6mm shares for $5. (Jun.)

Investment Banks/Advisors: Craig-Hallum Inc.; Oppenheimer & Co. Inc.; Roth Capital Partners

Immune Design Corp.

Immune Design Corp. (immunotherapies for cancer) filed for its initial public offering. (Jun.)

Founded in 2008, Immune Design devised technologies that activate the immune system’s ability to create cytotoxic T-cells to fight cancer. It’s DCVex platform uses a re-engineered vector to transport genetic information of tumor antigens selectively to dendritic cells in the skin, creating cytotoxic T-cells that can then go after the targeted tumor. DCVex was used to design LV305, which targets the NYESO1 antigen and is in Phase I trials for solid tumors. The other technology--GLAAS--is based on glucopyranosyl lipid A (GLA), which selectively binds to the TLR4 receptor and activates dendritic cells to boost production of CD4 helper T-cells, which also enhance anti-tumor response. The two GLAAS-based compounds in Immune Design’s pipeline are CMB305, in Phase I for solid tumors, and G100, in Phase I for Merkel cell carcinoma. Immune Design’s main collaboration is a 2010 deal with AstraZeneca’s MedImmune LLC, which has rights to use GLAAS to develop and sell vaccines in three different infectious disease indications. (The first candidate disclosed from that alliance is MEDI7510, in Phase I for respiratory syncytial virus. Immune Design could get up to $228mm in milestones, plus royalties, from MedImmune.) Immune Design raised over $80mm since inception from VCs including Alta Partners, the Column Group, and ProQuest, among others. The company had about $25mm in cash on hand as of March 31, 2014. Investment Banks/Advisors: Jefferies & Co. Inc.; Leerink Partners LLC; Wells Fargo Securities LLC

Innocoll GMBH

Innocoll AG (collagen-based technology platform and products for infection prevention and post-operative pain) filed for its IPO. (Jun.)

The company’s lead candidates are XaraColl (implantable, bioresorbable collagen sponge that delivers bupivacaine at the surgical site) for post-operative pain, and Cogenzia (topically applied bioresorbable collagen sponge that administers a high dose of gentamicin) for the treatment of diabetic foot infections. Innocoll plans to initiate Phase III trials for both in H2 2014 and expects final data in late 2015. XaraColl has completed four Phase II trials and an NDA is anticipated in H1 2016. Cogenzia will be submitted for the FDA’s Fast Track program to address substantial unmet medical need. Both products are already approved in Canada, Saudi Arabia and Jordan, and the company expects to partner in emerging countries. Innocoll is also developing CollaGUARD, a transparent collagen film for prevention of post-operative adhesions in digestive, colorectal, gynecological, and urological surgeries. CollaGUARD is regulated as a Class II device in the US and will require pivotal clinical trials for pre-market approval by the FDA. The product is cleared in 45 countries in the EU, Asia and emerging markets, and distributed through a partnership with Takeda. Innocoll expects to launch CollaGUARD in over 20 countries in Q2 2014. The company also has CollaRx (which is the basis for XaraColl and Cogenzia), a lyophilized porous sponge prepared by freeze drying dispersed purified collagen, and CollaFilm, a film cast membrane put together by convective drying of dispersed purified collagen (the basis for CollaGUARD). Investment Banks/Advisors: JMP Securities LLC; Piper Jaffray & Co.; Stifel Nicolaus & Co. Inc.

Karyopharm Therapeutics Inc.

Less than a year after closing its $116mm IPO, Karyopharm Therapeutics Inc. (developing selective inhibitors of nuclear export for cancer and other serious diseases) netted $113.6mm through the public offering of 2.8mm common shares (including the overallotment) at $42.50. Selling stockholders also issued 200k shares. The company earmarked $65mm of the proceeds for its lead candidate selinexor (Phase II and III trials for blood and solid tumors, and earlier studies for other cancers), and will also use the funds for preclinical inflammation, viral disease, and wound therapies. (Jun.)

Investment Banks/Advisors: Bank of America Merrill Lynch; JMP Securities LLC; Leerink Partners LLC; Oppenheimer & Co. Inc.; Wedbush PacGrow Life Sciences

Kite Pharma Inc.

Kite Pharma Inc. (autologous cell therapies for cancer) netted $118.6mm through its initial public offering of 7.5mm shares at $17. Shortly after the company filed in May, it set terms of 6mm shares at $12-14, and then raised the bar just a few weeks later, stating it hoped to sell 7.5mm shares at $15-16. (Jun.)

Formed in 2009, Kite is developing cancer immunotherapeutics based on its engineered Autologous cell Therapy (eACT) platform. The technique manufactures T-cells (derived from a patient’s own peripheral blood T-cells) to express either chimeric antigen receptors (CAR) or T-cell receptors (TCR), and kill tumor cells regardless of origin, stage, or exposure to previous treatments. Under a CRADA with the surgery branch of the National Institutes of Health’s National Cancer Institute, Kite is conducting trials for eACT-based blood and solid tumor treatments. Some of the IPO proceeds will fund an upcoming Phase I/II trial with NCI of KTEC19, a CAR therapeutic for diffuse large B-cell lymphoma. Kite is also working on TCR-based cell therapies with an exclusive license to the NIH’s IP regarding targeting the SSX2 antigen for head and neck cancer, hepatocellular carcinoma, melanoma, prostate cancer, and sarcoma. (Kite has co-exclusive rights for additional tumor types.) The company's principal investors include individuals Arie Belldegrun, MD (company founder and executive chairman; 17.3% stake following the IPO), David Bonderman (TPG; 6.6%), and VC firms Pontifax and Alta Partners (6% and 8%, respectively). Kite brought in $35mm through its Series A round in May 2013, and earlier this year, sold $50mm of its convertible notes to new and existing backers. Investment Banks/Advisors: Cowen & Co. LLC; Credit Suisse Group; Jefferies & Co. Inc.; Stifel Nicolaus & Co. Inc.

Lantheus Holdings Inc.

Lantheus Holdings Inc., which markets radiopharmaceuticals and contrast agents, filed for its initial public offering. (Jun.)

Lantheus was established in 1956 as New England Nuclear, which was acquired by DuPont Pharmaceuticals in 1981. Twenty years later, Bristol-Myers Squibb bought DuPont, but in 2007 the Big Pharma re-prioritized to focus on specialty pharmaceuticals and divested Lantheus (then known as Bristol-Myers Squibb Medical Imaging) to private equity firm Avista Capital Partners for $525mm. Internationally, Lantheus now sells ten diagnostic imaging agents used in nuclear imaging, MRIs, and echocardiography procedures mainly to diagnose cardiovascular diseases such as coronary artery disease, congestive heart failure, stroke, and peripheral vascular disease. Customers include radiopharmacies, hospitals/clinics, group practices, GPOs, and wholesalers. The company’s two flagship products are Definity, a top-selling ultrasound contrast agent (with $78.1mm in 2013 revenue) employed during echocardiography exams to visualize the left ventricle and assess its function, and TechneLite, a self-contained system that produces the medical isotope technetium (Tc99m), used to prepare patient-specific radiolabeled agents. Lantheus’ other imaging agents detect additional cardiovascular conditions, brain blood flow blockage, infections, and cancer. In the pipeline, the company is working on candidates for assessing myocardial perfusion, cardiac sympathetic nerve function, and atherosclerotic plaque location, burden and composition. Investment Banks/Advisors: Citigroup Inc.; Jefferies & Co. Inc.; RBC Capital Markets; Robert W. Baird & Co. Inc.; Wells Fargo Securities LLC

Merus Labs International Inc.

Canadian spec pharma Merus Labs International Inc. sold 10k Series A convertible preferred shares for $1k to a Canadian institutional investor, grossing $Cdn10mm ($9.2mm). The shares, which expire at the end of October 2019, convert into common stock at $Cdn2.20 apiece. The investor may redeem the stock only if Merus does not complete a product acquisition by the end of the year. (Jun.)

Merus Labs International Inc.

Merus Labs International Inc. (spec pharma) netted $Cdn29.7mm ($27.3mm) in a bought deal public financing of 18.4mm shares (including the overallotment) at $Cdn1.70 apiece. It plans to use the proceeds from this financing for future acquisitions targeting products with annual sales exceeding $200mm. (Jun.)

Investment Banks/Advisors: Canaccord Genuity Inc.; Clarus Securities ; Cormark Securities Inc.; Paradigm Capital Inc.; TD Securities Inc.

Minerva Neurosciences Inc.

Minerva Neurosciences Inc. (CNS drug candidates) netted $30.4mm in its IPO of 5.4mm shares for $6, way below its initially anticipated $10-12 price range. Existing investors indicated interest in buying $16mm of the stock. (Jul.)

The company was founded in 2007 as Cyrenaic Pharmaceuticals; last year Cyrenaic merged with Sonkei Pharmaceuticals to form Minerva. The company’s financial backers include Care Capital and Index Ventures. Via acquisition or in-licensing, Minerva has built a pipeline led by MIN101 (formerly CYR101), a 5-HT2A/Sigma-2 antagonist in Phase II for schizophrenia. Minerva believes its candidate is differentiated from existing treatments in that MIN101 may tackle negative symptoms (for example mood flatness and social deficits) in addition to addressing positive and cognitive issues without side effects. A Phase IIb trial in Europe is planned for the second half of 2014. The next most advanced compound is the 5HT1A/5HT2A antagonist MIN117 (SOK117) for major depressive disorder. Minerva expects to move the candidate into Phase II this year. The company has worldwide rights outside of Asia to both MIN101 and MIN117 from Mitsubishi Tanabe Pharma, which retains Asian rights per its agreements with Cyrenaic and Sonkei. Under a preliminary alliance signed in February 2014, Minerva is co-developing with Janssen Phase I MIN202, a selective orexin-2 antagonist for primary insomnia, and secondary insomnia as an adjunctive with an antidepressant for the treatment of mood disorders. Upon completion of the IPO, Minerva will own exclusive European rights and pay Janssen royalties. Finally, Minerva is working on material scale-up for IND-enabling studies of MIN301, a recombinant neuregulin-1 beta-1 protein therapeutic/ErbB4 activator for Parkinson’s. Phase I is expected to start in early 2015. MIN301 (formerly NRG101) came from Minerva’s February 2014 acquisition of Mind-NRG. Investment Banks/Advisors: JMP Securities LLC; Jefferies & Co. Inc.; Robert W. Baird & Co. Inc.

Novavax Inc.

Infectious disease vaccines developer Novavax Inc. netted $108.1mm through the follow-on public sale of 28.8mm common shares (including the overallotment) at $4 each. Funds will partly support ongoing preclinical and clinical programs. (Jun.)

Investment Banks/Advisors: Citigroup Inc.; FBR & Co.; JP Morgan & Co.; Ladenburg Thalmann & Co. Inc.; Piper Jaffray & Co.

Nuvilex Inc.

PharmaCyte Biotech Inc. (cell and gene therapy) could raise up to $50mm in an at-the-market private placement of common shares. Chardan Capital Markets is the placement agent. Upon the company’s approval, Chardan will offer up to a maximum number of shares (determined by Nuvilex). (May)

In February 2014 Nuvilex entered a financing arrangement of up to $27mm with Lincoln Park Capital--which invested $2mm of that amount through the purchase of 8mm shares $0.25--but has since terminated that agreement for this one, which is more favorable to shareholders. At-the-market offerings provide advantages over traditional follow-on offerings such as flexibility, lower expense, and giving stockholders a quick method to raise capital (by selling newly issued shares) while controlling the deal. Initially founded in 1996 as a nonmedical entity called DJH International, the company went public as e-FoodSafety.com in 2004 and underwent several more acquisitions, name changes, and reorganizations over the following five years. It changed its name to Nuvilex in late 2009 and through the buy of cell-encapsulation assets from SG Austria subsidiaries in 2011 and 2013, Nuvilex made biotech its core business. With its acquired Cell-in-a-Box platform, it’s developing treatments for all types of cancers, and has a compound in Phase III for pancreatic cancer. Proceeds from the current financing will fund late-stage clinical trials for the pancreatic cancer candidate, preclinical studies and clinical trials, and further testing and research for a potential diabetes drug. Investment Banks/Advisors: Chardan Capital Markets

OncoGenex Pharmaceuticals Inc.

OncoGenex Pharmaceuticals Inc. (developing cancer therapies that address treatment resistance) netted $22.6mm through a registered direct offering of units to undisclosed investors. (Jun.)

The company sold 5.56mm Series A units at $3.48 (a slight discount); each unit consisted of one common share and a five-year Series A warrant to purchase up to half a share at $4. Additionally, to investors whose purchase of Series A units would have resulted in beneficial ownership exceeding 9.99%, OncoGenex issued 1.3mm Series B units at $3.47. These units each consisted of a pre-funded five-year warrant to buy one share at $0.01, and a five-year Series B warrant for up to half a share at $4. Proceeds will fund development of apatorsen (OGX427), a heat shock protein 27 inhibitor in Phase II trials for prostate, bladder, pancreatic, and lung cancers. Investment Banks/Advisors: Stifel Nicolaus & Co. Inc.

OncoSec Medical Inc.

OncoSec Medical Inc. (using its ImmunoPulse electroporation platform to create and deliver cancer immunotherapies) netted $15mm through the registered direct sale of 22.5mm common shares at $0.71 (a 9% discount). Investors also received warrants to buy 7.9mm common at $0.90. HC Wainwright was the placement agent. (Jun.)

Investment Banks/Advisors: HC Wainwright & Co.; Maxim Group LLC; Noble Financial Group

Oxford BioMedica PLC

Oxford BioMedica PLC (CNS, ocular, and cancer gene therapies, antibodies, and vaccines) sold 1.3bn new ordinary shares at £0.02 (market average) through a firm placing, subscription, and open offer to net £23.7mm ($39.7mm). (May)

Existing shareholder Vulpes Life Sciences Fund bought 83.4mm in stock and was also allotted 48.8mm shares, bringing its ownership stake to 28.3%. In addition, Oxford directors acquired stock. Roth Capital Partners was the US placement agent. The financing will support continued expansion of Oxford’s LentiVector pipeline, especially in ophthalmology. In addition, the company expects to pay back a loan from Vulpes and develop its manufacturing capacity and processes. Investment Banks/Advisors: Roth Capital Partners

Pfenex Inc.

Biosimilar therapeutics developer Pfenex Inc. filed for its initial public offering. (Jun.)

The company spun out from Dow Chemical in 2009 and has a protein production platform called Pfenex Expression Technology. Pfenex’s pipeline consists of seven biosimilars, one generic, and three vaccine candidates. Its lead compound PF582 is a biosimilar to Roche/Novartis’ Lucentis (ranibizumab) for retinal diseases. (Worldwide sales of Lucentis reached $4.3bn in 2013.) PF582 is in Phase Ib/IIa for wet age-related macular degeneration, and is expected to enter Phase III trials in mid-2015. Second in the pipeline is PF530, a biosimilar to Bayer’s Betaseron (interferon beta-1b) for multiple sclerosis; it should commence Phase I in H2 2014. In April 2013 Pfenex and Indian company Agila Biotech Pvt. Ltd. created a joint venture to develop, manufacture, and sell biosimilars worldwide. The JV is initially focusing on PF530. For FYE 2013, Pfenex reported $11.9mm in revenues and at the end of March 2014 it had $5.1mm in cash and equivalents. Investment Banks/Advisors: JMP Securities LLC; Mizuho Bank Ltd.; William Blair & Co.

Radius Health Inc.

After two previous failed attempts to go public in the last two years, women’s health and osteoporosis drug developer Radius Health Inc. finally completed its IPO, netting $48.4mm through the sale of 6.5mm shares at $8. The company’s first attempt occurred in February 2012, but terms of 6.5mm shares for $8.50-10.50 were withdrawn later that year. It re-filed in February 2014, hoping to sell 5mm shares at $14-16, but that too was withdrawn just last month, to be followed less than three weeks later by the new filing, which closed shortly thereafter. (Jun.)

Formed in 2003 as the private company Nuvios, Radius took on public status in May 2011 through a reverse merger with MPM Acquisition Corp., an unlisted public reporting shell entity. In-licensed from Ipsen in 2005 the company’s lead osteoporosis candidate, abaloparatide (formerly BA058), in Phase III as an injectable, and in Phase II as a microneedle patch. Novartis had an option for exclusive rights to BA058 in 2007, but let it expire for strategic reasons about a year-and-a-half afterward. 3M Drug Delivery Systems’ Microstructured Transdermal System is utilized in the development of the abaloparatide patch under an exclusive agreement. Radius’ pipeline also includes Phase II RAD1901 for vasomotor symptoms associated with menopause (the compound is also in Phase I for breast cancer metastases), and preclinical RAD140 for bone density and weight loss associated with osteoporosis/frailty, cancer cachexia, and breast cancer. Radius has raised over $200mm to date (including a $43mm private placement that closed in April 2013). A few of the company’s shareholders (BB Biotech, Brookside Capital Partners Fund, and F2 Ventures) could purchase up to $19mm of the IPO shares. (F2 was a new investor in the April 2013 PIPE, and after the IPO will hold a 16.5% stake, second to MPM Capital’s 20.4%.) Investment Banks/Advisors: Canaccord Genuity Inc.; Cantor Fitzgerald & Co.; Cowen & Co. LLC; Jefferies & Co. Inc.

Receptos Inc.

Immune and metabolic disease drug developer Receptos Inc. netted $170mm in a follow-on offering of 4.4mm shares at $40.25, 65% higher than its IPO price ($14) a little over a year ago. Proceeds will fund continued development of lead candidate RPC1063 (an S1P1R modulator), in Phase II/III for relapsing multiple sclerosis and ulcerative colitis, and RPC4046, a Phase I anti-IL-13 antibody for eosinophilic esophagitis in-licensed last year from AbbVie under an option agreement. (Jun.)

Investment Banks/Advisors: BMO Financial Group; Credit Suisse Group; Leerink Partners LLC; Nomura Securities International Inc.; Wedbush PacGrow Life Sciences

Retrophin Inc.

Four months after completing a Nasdaq IPO, Retrophin Inc. (rare disease therapeutics) entered into a definitive purchase agreement to sell to institutional investors up to $46mm of its 4.50% senior convertible notes due 2019. The notes convert into common stock at a rate of 57.43 per $1k principal amount, or about $17.41 per share. (The company's stock is currently averaging $13.19.) (May)

Concurrently Retrophin received a $40mm senior secured term loan commitment from Athyrium Capital Management. The loan will mature in 2018 at an interest rate of LIBOR (with a 1% floor), plus 10%. The company also issued Athyrium five-year warrants to purchase 300k of its common shares at $13.93 per share.

ReVance Therapeutics Inc.

Only four months after completing a $103mm IPO, Revance Therapeutics Inc. (topical and injectable formulations of botulinum toxin for aesthetics and therapeutic dermatology) netted $114.7mm through a FOPO, selling 4mm shares at $30.50. (Jun.)

Approximately $70mm of the proceeds will go toward development of the topical and injectable candidates RT001 and RT002, respectively: two US Phase III trials, one European trial, and a long-term safety study for crow’s feet lines, and a Phase II trial in hyperhidrosis (RT001); and nonclinical and clinical programs in glabellar lines, and studies in blepharospasm and therapeutic indications (RT002). Revance may use another $20-30mm to support manufacturing, quality, and regulatory activities for both formulations, and the balance to test in new therapeutic areas. Investment Banks/Advisors: BMO Financial Group; Cowen & Co. LLC; Piper Jaffray & Co.; William Blair & Co.

SAGE Therapeutics Inc.

SAGE Therapeutics Inc., which is targeting various stages of status epilepticus (state of persistent seizure), filed for its initial public offering. (Jun.)

SAGE, a 2011 start-up, develops positive and negative allosteric modulators (PANAMs) interacting with GABA, an important synaptic and extrasynaptic receptor in the CNS, and the NDMA glutamate receptor, which regulates excitatory neurotransmission. Imbalances in GABA and glutamate are believed to play a part in many neurological diseases. The company’s lead candidate SAGE547 (allopregnanolone) is a neurosteroid/progesterone metabolite in Phase I/II that’s combined with existing drugs for a rare epileptic condition called super-refractory status epilepticus. SAGE547 has US orphan drug designation, and data from the Phase I/II trial is expected in the second half of this year. SAGE is conducting IND-enabling toxicology and safety studies of the GABA-A allosteric modulators SAGE689, for adjunctive second-line therapy for status epilepticus, and SAGE217, for maintenance therapy status epilepticus/orphan genetic seizure disorders and refractory status epilepticus. The biotech holds exclusive rights to Washington University’s small-molecule GABA-A allosteric modulators for neuropsychiatric diseases, and also has an exclusive license to Ligand’s cyclodextrin-enhancing Captisol technology to improve solubility, bioavailability, stability, and pharmacokinetics of its pipeline. SAGE has raised $96mm in venture financing to date, including a $38mm Series C announced just a few months ago. Investment Banks/Advisors: Canaccord Genuity Inc.; Goldman Sachs & Co.; JP Morgan & Co.; Leerink Partners LLC

Silenseed Ltd.

Israel’s Silenseed Ltd. (RNAi-based drug delivery) filed for its initial public offering in the US. (Jun.)

The company was formed in late-2008, and is developing targeted cancer therapeutics based on its LODER (LOcal Drug EluteR) technology, which implants RNAi drugs directly into the core of a tumor using a specialized polymer scaffold. The therapy involves placing the polymer into the tumor through a minimally invasive procedure similar to a needle biopsy, and allows for the extended release of the active ingredient. Silenseed’s lead candidate SiG12D-LODER completed Phase I pancreatic cancer trials; next up are Prostate-LODER and GBM-LODER for prostate and brain cancers, respectively. According to its F-1 filing, Silenseed raised about $3mm through multiple private placements since 2011. Investment Banks/Advisors: Aegis Capital Corp.

TetraLogic Pharmaceuticals Corp.

TetraLogic Pharmaceuticals Corp. (developing second mitochondrial-derived activator of caspase (smac) mimetics for cancer and infectious diseases) netted $44mm through the private sale of $47mm aggregate amount of its 8% senior notes due 2019. The notes convert to common stock at a rate of 148.3019 shares per $1k principal amount, or $6.74 per share. (TetraLogic's stock averaged $4.98 before the sale.) Some of the proceeds will fund Phase II trials of birinapant for solid and blood cancers, as well as Phase I studies with SHAPE (suberohydroxamic acid phenyl ester), a topical compound for cutaneous T-cell lymphoma. (Jun.)

Investment Banks/Advisors: Nomura Securities International Inc.

Tobira Therapeutics Inc.

Tobira Therapeutics Inc. (developing cenicriviroc for multiple diseases) filed for its initial public offering. (Jun.)

The seven-year-old firm is working on therapies for liver disease, HIV, fibrosis, and inflammation. Lead compound cenicriviroc (CVC), licensed from Takeda in 2007, is an antagonist of chemokine receptor types 2 and 5, demonstrating anti-inflammatory and antifibrotic activity. It’s expected to enter Phase II for non-alcoholic steatohepatitis (NASH) in H2 2014. Tobira claims it’s the only firm working on a NASH treatment targeting the immuno-inflammatory pathways that cause fibrosis. CVC is also being developed for HIV-1 and is Phase III-ready for that indication. In preclinical studies the candidate showed potential in kidney fibrosis, graft-versus-host disease, and certain cancers. The company raised a total of $62mm in its Series A and B rounds and is backed by Novo AS, Domain Associates, Frazier Healthcare Ventures, Montreux Equity Partners, and Canaan Partners. Investment Banks/Advisors: BMO Financial Group; JMP Securities LLC; Nomura Securities International Inc.; Oppenheimer & Co. Inc.

Transition Therapeutics Inc.

Transition Therapeutics Inc. (metabolic, neurological, and musculoskeletal diseases) raised $17mm through the sale of 3.2mm units at $5.32 (a 2% premium) to Oracle Investment Management, Jack W. Schuler, Larry N. Feinberg, and company management and board members. Each unit consists of one common share and 0.61 of a two-year warrant; whole warrants are exercisable at $7.10 per share. The company will use the money to finish Phase II trials of ELND005 in agitation and aggression associated with Alzheimer's disease, and TT401 (partnered with Lilly) in Type II diabetes. (Jun.)

Vascular Biogenics Ltd.

Vascular Biogenics Ltd. (Israeli biotech also known as VBL Therapeutics; cancer and inflammatory disease therapies) filed for its initial public offering in the US. (Jun.)

Formed in 2000, VBL has two technology platforms utilized in its drug development activities. The VTS platform allows for the systemic administration of gene therapies to either destroy or promote the growth of angiogenic blood vessels. VTS compounds are made up of a viral vector, a proprietary genetically modified promoter (PPE-1-3X; targets the endothelial cells of angiogenic blood vessels), and a transgene/genetic sequence designed to produce a desired protein. In oncology, the transgene destroys blood vessels, while in other applications it promotes their growth. VBL’s lead VTS candidate VB111 is in Phase II for glioblastoma multiforme, with Phase III trials expected by the end of the first quarter 2015. (It is also in Phase I/II for thyroid and ovarian cancers.) The company’s other technology, the lecinoxid platform, consists of oral small-molecule therapies that modulate inflammatory response. The lead project here is VB201, which is in Phase II for psoriasis and ulcerative colitis. (Additional potential indications include Crohn’s disease, atherosclerosis, multiple sclerosis, and rheumatoid arthritis). VBL raised about $70mm in venture funding; key shareholders include the Keffi Group (24% stake pre-IPO), Aurum Ventures (23.5%), and affiliates of Pitango Ventures (11.7%). Investment Banks/Advisors: Deutsche Bank AG; JMP Securities LLC; Oppenheimer & Co. Inc.; Wells Fargo Securities LLC

Zafgen Inc.

After raising $45mm in a December 2013 Series E, obesity-focused Zafgen Inc. netted $102.7mm in its initial public offering of 6.9mm shares (including the overallotment) at $16 each, the high end of its intended $14-16 range. The company had planned to sell 5mm shares. (Jun.)

Founded in 2005, Zafgen is developing therapies that target the biological mechanisms of obesity and can overcome metabolic adaptations. Current obesity treatments work by suppressing the appetite or blocking fat absorption, and come with side effects and have limited success rates. Zafgen’s lead compound beloranib is a Phase IIa methionine aminopeptidase 2 (MetAP2) inhibitor designed to help the body balance fat production and metabolism. It’s being developed as a twice-weekly subcutaneous injection for obesity and hyperphagia in patients with Prader-Willi syndrome (PWS) and craniopharyngioma. The IPO money will help move beloranib (for the PWS indication) through a Phase III trial in the US and commence Phase III in the EU; complete a Phase IIa trial in craniopharyngioma-associated obesity; and initiate a Phase IIb as a treatment for severe obesity in the general population. Funds will also support IND-enabling studies and Phase I development of ZGN839 for nonalcoholic steatohepatitis. Zafgen raised over $125mm through five venture rounds from investors including RA Capital Management, Brookside Capital, Venrock, Alta Partners, Atlas Venture, and Third Rock Ventures. At the end of March 2014, the company had $38.5mm in cash and equivalents. Investment Banks/Advisors: Canaccord Genuity Inc.; Cowen & Co. LLC; JMP Securities LLC; Leerink Partners LLC

Zosano Pharma Corp.

Transdermal drug delivery firm Zosano Pharma Corp. filed for its initial public offering. (Jun.)

Zosano was originally spun off from J&J's Alza division as Macroflux in 2006 and changed its name to Zosano Pharma Inc. the following year. After a 2012 recapitalization it was known as ZP Holdings, and as of June 2014, the company’s name is Zosano Pharma Corp. Its lead product is ZPPTH, a Phase III-ready patch for severe osteoporosis that delivers teriparatide (parathyroid hormone 1-34), a compound that stimulates new bone formation and reduces the risk of fractures. ZPPTH uses Zosano’s ZP Patch transdermal microneedle patch technology, which is designed to deliver daily or weekly both large- and small-molecule drugs as an alternative to daily injections. Zosano recently partnered with Novo Nordisk, which got exclusive worldwide rights to use the ZP Patch platform for a preclinical GLP-1 analogue candidate for Type II diabetes. Zosano’s preclinical compounds--including ZPTriptan (zolmitriptan; a serotonin receptor agonist for migraines) and an undisclosed vaccine and mAb--also use the ZP Patch system. Through the sale of preferred stock and the issuance of debt, the company has raised about $120mm since its inception from backers that include New Enterprise Associates, Nomura Phase4 Ventures, HBM BioVentures, and ProQuest Investments. Investment Banks/Advisors: Ladenburg Thalmann & Co. Inc.; Roth Capital Partners; Wedbush PacGrow Life Sciences

ZS Pharma Inc.

ZS Pharma Inc. (late-stage biotech developing drugs for hyperkalemia) netted $99.5mm in its initial public offering of 6mm shares. The company had planned to offer 5mm shares at $15-17 and priced above the range, at $18 per share. (Jun.)

The Texas-based biotech, founded in 2008, is developing products based on a proprietary zirconium silicate technology for renal, cardio, liver and metabolic indications. Its main candidate ZS9 is in Phase III trials for hyperkalemia and the company intends to submit a NDA in the US and an MAA in the EU in H1 2015. ZS’s strategy will be to use its internal US sales force to target nephrologists and cardiologists and to seek a partner for ex-US commercialization. To date, ZS has completed two clinical trials in hyperkalemia for ZS9--ZS002 (Phase II) in May 2012 and ZS003 (Phase III) in May 2013. Both studies met their primary and secondary endpoints and had statistically significant results. A second Phase III trial, ZS004, was initiated in Q1 2014, and ZS plans a long-term safety study, ZS005, in Q2 2014. The company intends to manufacture in two in-house facilities and will also seek to acquire/in-license products. ZS, whose management team has Big Pharma backgrounds, has raised at least $100mm in equity financing from various venture capital firms ($55mm in Series D this past May, and $46mm in a Series C round in 2012). Investment Banks/Advisors: BMO Financial Group; Credit Suisse First Boston; JP Morgan & Co.; William Blair & Co.

RESEARCH, ANALYTICAL EQUIPMENT & SUPPLIES

Mergers & Acquisitions

Agena Bioscience

Sequenom Inc.

Newly formed Agena Bioscience (research tools) acquired all the assets and related intellectual property of Sequenom Inc.’s bioscience business, which develops, manufactures, and sells genetic analysis instruments and tools, software, reagents, and consumables for research applications. (May)

The start-up will pay $31.8mm in cash now, but Sequenom could also receive a $2mm earn-out if a specified regulatory milestone is met by September 30, 2014; the amount will be $1mm should regulatory clearance be obtained between September 30, 2014 and December 31, 2014. If the 2014 net revenues of the bioscience business reach or exceed a certain target, Agena could also pay out an additional $2mm in sales earn-outs. The bioscience unit’s MassARRAY highly sensitive and accurate DNA analysis system uses MALDI-TOF mass spectrometry to provide reliable and specific data from only trace amounts of biological samples or genetic target material in research applications including somatic mutation profiling, genotyping, methylation analysis, molecular typing, and quantitative gene expression detection. The segment recorded $42.9mm in revenues for 2013, most of which came from sales of the MassARRAY system and related contract research services provided to clinical research laboratories, biopharma companies, academic institutions, and government agencies. Other product offerings include chip and reagent consumables, and software and biomarker assay panels for applications in translational and clinical research. Sequenom first divulged plans to unload this unit following a strategic business review in September 2013. With the divestiture, Sequenom can now focus on its more profitable molecular diagnostic business, which brought in sales of $119.6mm for 2013 through laboratory testing services and laboratory-developed assays mostly focused on prenatal diseases and conditions. Agena, a portfolio company of PE firm Telegraph Hill Partners (THP), was formed to leverage the strengths of MassARRAY. (Although Agena’s financing history is unknown, last year THP raised a $310mm fund (THP III) earmarked for investments in new health care and life science companies.) The transferred segment will become part of Agena’s bioscience division (formerly known as Genetic Analysis), and continue to sell MassARRAY and associated products and services for research purposes. Agena plans to use UltraSEEK chemistry--a new ultrasensitive technology to detect rare somatic mutations that occur in less than 1% of matched tissue, circulating plasma, and tumor samples--on the MassARRAY system. Agena also hopes to expand the product’s diagnostic market opportunities. Sequenom is awaiting a response from the FDA regarding its 510(k) application submitted last year for IMPACT Dx, a version of the MassARRAY system for use in clinical diagnostics. Investment Banks/Advisors: Jefferies & Co. Inc. (Sequenom Inc.)

June 2014 update: Upon Sequenom’s 510(k) clearance from the FDA to market its {IMPACT Dx} system, Sequenom will receive $2mm; the approval also marks Agena’s entrance into the clinical diagnostic market.

Bio-Techne

ProteinSimple

Bio-Techne (develops purified proteins including cytokines, growth factors, antibodies, immunoassays, and biologically active small molecules) acquired ProteinSimple (protein analysis systems and consumables) for $300mm in cash. The transaction will be financed through cash on hand and a new revolving credit facility, and is expected to close by July 31, 2014. (Jun.)

Santa Clara-based ProteinSimple offers the Simple Western family of instruments, including the Wes, which delivers 25 Western blots in less than three hours. The company also provides the Peggy Sue and Sally Sue Western blot products. With over 200 employees, the company has manufacturing facilities in Canada, and sales offices in Japan and China. The transaction will provide for full protein analysis solutions focused on purity and identification and will fit Bio-Techne’s antibody reagents with ProteinSimple’s customers’ consumable needs. For FYE May 2014, ProteinSimple reported revenues (30% growth) and EBITDA of $57.1mm and $7.9mm, respectively. ProteinSimple will operate as a division of Bio-Techne. Investment Banks/Advisors: JP Morgan & Co. (ProteinSimple)

Horizon Discovery Group PLC

Horizon CombinatoRx Inc.

Zalicus Inc.

Zalicus Inc. (pain therapeutics) divested its combination high throughput screening (cHTS) services business to research tools and drug discovery company Horizon Discovery Group PLC for $8mm, plus working capital adjustments and up to $58mm in earn-outs for each combination that advances through development via partnerships. The transaction also included two fully integrated robotic screening platforms, outstanding customer contracts, the Chalice bioinformatics software, 800 cell lines, and a compound and chemical probe library. (May)

The deal adds to Horizon’s existing contract research services segment; the company went public earlier this year on London’s AIM (netting $62.3mm), marking the largest IPO by a UK research firm to date. CHTS is powered by a technology that evaluates the activities of compounds in whole cell-based phenotypic assays to assess the synergies of combinations against multiple targets. Zalicus couples this method with Chalice to derive combination activity profiling data. Novartis Institutes for BioMedical Research has been using the platform in its cancer drug discovery activities. Horizon has added its X-MAN genetically defined cells line to those of cHTS, which will also be integrated with Horizon’s gene editing tool GENESIS. The company expects to perform screening of compound siRNA, shRNA, and sgRNA (for CRISPR-based screening) libraries. In 2013, revenue from cHTS and related collaborations totaled $8.1mm. Horizon has renamed the acquired business Horizon CombinatoRx Inc., which will be located in the US (CombinatoRx was Zalicus’ former name). Last month, Zalicus and fellow biotech Epirus Biopharmaceuticals agreed to reverse merge to create a new company that holds the Epirus name and Zalicus’ public listing. Zalicus’ ownership in the combined entity will depend on how much net cash the company has at deal closing. Based on the proceeds from the cHTS divestment, Zalicus is expected to have over $9mm, increasing its holdings to 17%. The biotech still aims to boost its stake to the maximum 19% by monetizing other assets, potentially its ion channel programs for pain.

Roche

Roche Sequencing

Genia Technologies Inc.

Roche acquired private DNA sequencing firm Genia Technologies Inc. for $125mm up front plus $225mm in earn-outs. (Jun.)

Genia, founded in 2009, designed a chip that can determine DNA sequences electronically at the single-molecule level. The platform involves a metal-oxide semiconductor-integrated circuit in which protein nanopores (developed at Harvard University) are assembled in a lipid bi-layer membrane to analyze single strands of DNA. DNA sequences are identified by measuring the changes in electrical currents caused by the passage of each of the four different tag types (NanoTags, licensed from Columbia University) released from the nucleotide during PCR. Genia says its product will cost less than others (sequencing the genome for $100, instead of $1k), improve sequencing times and sensitivity, and is less complicated to use in that it doesn’t require amplification or optical detection. In 2011 the company raised $10mm in Series A financing from Life Technologies (now part of Thermo Fisher Scientific) and in 2013 received a three-year $5.25mm grant from the National Human Genome Research Institute. Last year Roche went through a restructuring of its Roche Applied Science business, which was dissolved. Roche had been working on a nanopore-based sequencing platform with IBM (supplemented with DNA base sensing and reading technologies licensed from universities in 2011), but in 2013 terminated the IBM agreement because of high technical risks. At the same time Roche also returned a semiconductor-based sequencing project to DNA Electronics. So Genia’s assets will fill those gaps and will fall under the Roche Diagnostics Corp.’s Roche Sequencing unit established in 2013. Genia’s capabilities are also complementary to PacBio’s Single Molecule, Real-Time (SMRT) platform. In September 2013, Roche Diagnostics received exclusive worldwide rights to sell over the next 13 years in vitro diagnostics built with SMRT. Roche is pushing for clinical DNA sequencing to be a part of routine diagnostics.

Sebia SA

Cinven is in exclusive negotiations to divest Sebia SA (electrophoresis systems and diagnostics) to a consortium led by fellow private equity firms Montagu and Astorg Partners. Cinven says the deal would result in a 2.4x step-up. In March 2010 Cinven acquired Sebia from Montagu and Astorg for a reported €800mm ($1.1bn), putting the current purchase price in the neighborhood of €1.9bn. (Jun.)

Nordic Capital was rumored to have also bid for Sebia. Astorg initially took a stake in Sebia in 2001, followed five years later by Montagu. Cinven says it used the same investment strategy with Sebia as it did with Phadia, an allergen testing business Cinven sold to Thermo Fisher in 2011 for over $3bn (a 3.4x multiple). Sebia, founded in 1967, produces clinical electrophoresis equipment and reagents used for protein separation analysis. Its products include agarose gel and capillary electrophoresis systems. Sebia uses these methods to diagnose several diseases, in particular myeloma. But in the past few years the company has expanded its portfolio to include Hb1Ac, hemoglobin, and carbohydrate-deficient transferrin (CDT) testing, and has also increased its presence in the US and emerging markets, where 21% and 23% of revenues are realized, respectively. Sebia’s portfolio is available in over 110 countries, and customers include private and public testing labs.

Alliances

Cellectis SA

Thermo Fisher Scientific Inc.

Cancer immunotherapy company Cellectis SA licensed Thermo Fisher Scientific Inc. worldwide rights to its TALEN (transcription activator-like (TAL) effector nuclease) genome editing technology outside of therapeutics. Concurrently, Thermo granted Cellectis a global license to its TAL nucleases. (Jun.)

Thermo has rights to sublicense Cellectis’ TALEN for R&D use, bioproduction, and applied markets. Cellectis’ license to Thermo’s TAL nucleases extends to R&D for internal and partnered research; bioresearch products and services; plant biotechnology, both in-house and via collaborations; and therapeutics, including a sublicense to use in conjunction with T-cell and natural cell medicines. In cell therapy, Cellectis is already developing engineered T-cell chimeric antigen receptor therapeutics for cancer. TALEN provides targeted genome modification and involves the fusion of a transcription activator-like effector DNA binding domain to the catalytic portion of an endonuclease. The resulting entity can efficiently and precisely break DNA strands to change or correct a gene’s function. Cellectis holds exclusive global rights to TALEN technologies from Iowa State University. Thermo Fisher, through Life Technologies (which it acquired in April 2013 for $15.2bn), already participates in the TALEN market via the GeneArt line of custom DNA-binding proteins. Life Tech got ahold of TALEN via a 2011 licensing agreement with Two Blades Foundation and the inventors of the platform from Martin-Luther-Universitat Halle-Wittenberg.