Industry Insight with Chester: A Collection of Current Industry Updates


Welcome to another posting of ‘Industry Insight with Chester’, a periodic round-up of news and views from around the Pharma and biopharma industries compiled by Chester Solack, Business Analyst at SAFC in Lenexa, Kansas.

Though this will be our last update for 2012, we look forward to bringing you many more updates and insights in 2013!

Sanofi’s Merial division to puy Dosch Pharmaceuticals AH operations – 20 Dec 12

http://www.fiercepharma.com/story/sanofi-animal-health-deal-puts-it-india/2012-12-20

Sanofi has found something to like about its prospects in India besides the country’s huge population of potential drug consumers. The country also has a lot of livestock that need drugs, too. In another M&A deal in the animal health arena, Sanofi’s animal health division, Merial, will buy the animal health operations of India’s Dosch Pharmaceuticals Private. Terms were not disclosed, but the French drugmaker says it picks up 86 drugs and a sales force of 279 people in one of the world’s largest and fastest-growing animal health markets.

Novartis to acquires Dendreon NJ Facility – 20 Dec 12

http://www.fiercepharma.com/story/dendreon-monetizes-nj-plant-43m-sale-novartis/2012-12-20

Dendreon ($DNDN) has turned to real estate for a financial boost. The Seattle-based drugmaker, reeling from disappointing sales of its cancer vaccine Provenge, is selling off its New Jersey manufacturing plant to Novartis ($NVS). And it’s looking to sublease a big chunk of headquarters space that’s standing empty after big cutbacks at the company. Essentially, Dendreon figured the plant’s highest and best use was putting it up for sale, rather than producing Provenge. Novartis agreed to buy the 173,000-square-foot facility for $43 million, giving Dendreon a cash infusion. The Swiss drugmaker will also take on 100 of the plant’s 300 employees. The selloff is part of Dendreon’s previously announced restructuring plans, which include 600 layoffs.

Roche “Lets go an make some deals” – 20 Dec 12

http://www.fiercepharma.com/story/cfo-no-stock-buybacks-roche-lets-make-7b-deal-instead/2012-12-20

Don’t count Roche in on the stock-buyback trend. The Swiss drugmaker would rather spend its money on acquisitions of up to $7 billion. Or so CFO Alan Hippe tells Bloomberg Industries analysts, piquing curiosity about likely targets. Hippe’s comments come as reports surface of another run at the gene-sequencing firm Ilumina. As Bloomberg reports, a Swiss newspaper says Roche may have agreed to buy Illumina for $66 per share, a big leap from its earlier $51 per share offer. It’s also outside the range Roche appeared willing to pay; at least one analyst deemed the higher bid “highly unlikely.” The company wouldn’t comment. This Illumina rumor carries at least a small kernel of truth. Hippe told the analysts that Roche would pay up to $6 billion to $7 billion on companies with innovative technologies, such as gene sequencing. He’s also shopping for smaller product deals to add to Roche’s line-up.

Vertex – Some patients have died taking the Hep C Drug Incivek – 19 Dec 12

http://www.fiercepharma.com/story/incivek-patients-died-skin-reactions-vertex-says/2012-12-19

Vertex Pharmaceuticals has some serious news about its hepatitis C drug Incivek: Some patients have died from serious skin reactions. The treatment, approved last year, was known to cause rash and skin reactions in some people, but this is the first time Vertex has reported deaths from those reactions. As the Boston Business Journal reports, FDA has now slapped a “black box” warning on Incivek, amping up the cautionary language already included on the drug’s official label. The safety issue could put a damper on Incivek as newer products near approval. Vertex wouldn’t say how many Incivek patients had died. The label update “follows reports of a small number of fatal skin reactions in patients who continued to receive Incivek combination therapy after a serious skin reaction was identified,” the company said in a statement.

Celgene inks $500M ADC deal with Sutro Biopharma – 18 Dec 12

http://www.fiercepharma.com/story/celgene-inks-500m-plus-deal-adc-developer-sutro/2012-12-18

Celgene has turned to the upstart antibody-drug conjugate developers at Sutro Biopharma. The drugmaker promises a package of more than $500 million in upfront fees, an equity stake, R&D support and milestones in exchange for some fine-tuned products.

Valeant completed acquisition of Medicis – 18 Dec 12

http://www.fiercepharma.com/story/valeant-cuts-200-medicis-jobs-26b-deal-closes/2012-12-18

Valeant Pharmaceuticals ($VRX) isn’t pussyfooting around Medicis. As the built-by-acquisition Canadian company wrapped up its deal for Medicis last week, some 200 employees were told to pack their bags. In a bid to beef up its dermatology business, Valeant snapped up Medicis for $2.6 billion, closing the deal last Tuesday. Valeant officials said they planned to save $225 million in integrating the two companies’ operations, by eliminating duplicate functions and positions, The Republic reports. So, Valeant has cut the Medicis payroll accordingly. The laid-off employees worked in finance, legal, investor relations and other headquarters departments, Spokeswoman Laurie W. Little told the Arizona newspaper. She wouldn’t confirm the exact number of jobs cut, but said the total was probably “a couple hundred.”

US branded drug sales begin a slide that is expected to last a few years – 17 Dec 12

http://www.fiercepharma.com/story/us-branded-sales-end-2012-35-decline/2012-12-17

By the time the ball drops in Times Square this year, branded drug sales will have dropped 3.5%. So says a new report on U.S. spending, which pegs this year’s decline at that rate–and forecasts an annual decline of 2.6%, on average, over the next several years. With megablockbuster products now off patent, branded drug sales were destined to slip. Pfizer’s Lipitor, AstraZeneca’s Seroquel, Eli Lilly’s Zyprexa, Sanofi and Bristol-Myers Squibb’s Plavix, Merck’s Singulair–all of these multibillion-dollar drugs have succumbed to generic competition in recent months, taking a major bite out of 2012 revenues.

Vivalis to acquire Intercell – 17 Dec 12

http://www.fiercebiotech.com/story/troubled-intercell-throws-towel-signs-merger-deal-vivalis/2012-12-17

With its only approved product floundering on the vaccine market, Austria’s Intercell has signed off on a plan to be acquired by the French biotech Vivalis, creating a new public company dubbed Valneva that plans to immediately raise fresh cash to back its combined operations. The deal values Intercell at $174 million, a significant premium for a biotech company that has seen its share price blasted over the past two years by clinical trial failures and poor results for the Japanese encephalitis vaccine Ixiaro, which has disappointed investors with weak sales. At the end of the third quarter, Intercell projected an annual loss of €24 million, significantly higher than the €20 million loss that had been projected earlier. A €40 million rights offering has been committed to after the merger closes.

Fresenius intends to sell its biotech operations – 14 Dec 12

http://www.fiercepharma.com/story/fresenius-intends-unload-biotech-operation/2012-12-14

Fresenius is huge in kidney dialysis, and its generic injectables unit has been racking up big sales gains by taking advantage of competitors’ manufacturing faux pas, but it just can’t seem to make money in biotech. Now it will quit trying. The German drug and healthcare company said today that it intends to sell its biotech unit and has a couple of parties interested in taking it off its hands. According to Bloomberg, the unit actually saw a 15% pop in 9-month revenue to about $34 million but is still expected to end up about $32.7 million in the red.

Gilead to acquire YM Biosciences – 12 Dec 12

http://www.fiercepharma.com/story/gilead-caps-2012-roll-bagging-cancer-drugmaker/2012-12-12

Gilead the world’s biggest maker of AIDS drugs announced today that it will pay $2.95 a share, or about $510 million, to acquire YM BioSciences to get its work on a drug for treating a bone-marrow disease. Gilead pointed out that it has been building its oncology area in recent years and this deal advances that effort. Gilead expects the deal to close in the first quarter of 2013 and says it will pay cash for YM.

Bausch & Lomb for sale…or how about an IPO – 12 Dec 12

http://www.fiercepharma.com/story/sanofi-merck-others-said-be-eyeing-bausch-buyout/2012-12-12

Bausch & Lomb, which has been building its prescription drug business, is drawing enough attention from Big Pharma names such as Sanofi and Merck & Co that its private equity investors may just sell it instead of going the IPO route. The company has hired the Goldman Sachs Group to see just how deep interest goes, according to The Wall Street Journal, citing unnamed sources. It is owned by Warburg Pincus, which paid $3.7 billion for the company in 2007 when it was having issues. Warburg figures it may be worth $10 billion to major drug manufacturers that like its pipeline of drugs and steady consumer business in contact lenses and related paraphernalia. Goldman this month began running the traps with drugmakers such as GlaxoSmithKline, Sanofi and Merck & Co., a source told Bloomberg, and has others on its GPS.

Pernix to acquire Somaxon – 11 Dec 12

http://www.fiercepharma.com/story/pernix-snatches-struggling-somaxon-25m/2012-12-11

A small specialty drug company out of Texas that has been on a buying binge is picking up Somaxon Pharmaceuticals and its insomnia drug Silenor for a song. Pernix Therapeutics Holdings said it is offering $25 million worth of Pernix shares to Somaxon shareholders. Somaxon shares were up more than 85% on the news, to $2.74 in midmorning trading. But that is a far cry from the $27 a share the company was trading at in 2011 when the company and its drug seemed to have some promise.

Amgen to Acquire deCODE Genetics – 10 Dec 12

http://www.fiercepharma.com/story/investors-must-decode-amgens-415-million-deal-genetics-firm/2012-12-10

Biotech company Amgen says it will pay $415 million to buy Icelandic company deCODE Genetics, but the deal has some watchers wondering what Amgen’s new CEO is really thinking here. The deal comes two years after a pair of biotech venture funds bought out of bankruptcy the struggling Icelandic biotech which had been working on the genetic triggers of disease. Amgen’s CEO Robert Bradway says deCODE will put his company at the forefront of genetic research. But, as FierceBiotech points out, deCODE was forced into bankruptcy in 2009 after investors were growing increasingly concerned that much of the hype about genetics had obscured how long it would take for deCode to actually cash in on its research. And in this case, deCODE’s work in genetics doesn’t completely sync up with Amgen’s pipeline, raising a question of whether Amgen can make any money off of much of deCode’s assets. Still, Amgen has been trading at record-high prices this year, particularly since Bradway took over in May, giving him some leeway to trade outside Amgen’s box.

Presidio call off acquisition of BioCryst – 30 Nov 12

http://www.fiercepharma.com/story/presidio-biocryst-call-101-million-merger/2012-11-30

Presidio Pharmaceuticals is leaving BioCryst Pharmaceuticals at the altar. The companies announced today that their $101 million marriage is off. What broke up the two, whose hepatitis C pipelines seemed so compatible? Ever since the engagement was announced in October, BioCryst has had one pipeline disaster after another. It killed plans for an early-stage trial of its experimental NS5B inhibitor BCX5191 over toxicity concerns. Its late-stage study of its flu drug peramivir crashed and then BioCryst announced that the FDA slapped a clinical hold on development of BCX41 for hereditary angioedema.

BASF Acquires Pronova – 21 Nov 12

http://www.fiercepharma.com/story/fish-oil-drugmaker-pronova-sells-germanys-basf-844m/2012-11-21

This isn’t the big fish-oil drug acquisition industry watchers were anticipating. BASF, the German chemicals giant, plans to gobble up Norway’s Pronova BioPharma, maker of the active ingredient in GlaxoSmithKline’s blockbuster omega-3 drug Lovaza, in a cash buyout valued at NOK 4,845 million or $844 million.

Wright Medical acquires BioMimetic – 19 Nov 12

http://www.fiercebiotech.com/story/wright-medical-snap-biomimetic-potential-380m-deal/2012-11-19

Eyeing growth in the regenerative medicine field, Wright Medical Group is making a calculated gamble on BioMimetic Therapeutics. While BioMimetic awaits a key FDA decision for its lead product, Wright has agreed to acquire the company for $190 million up front and $190 million down the road depending on certain milestones. BioMimetic has struggled to gain U.S. approval of its recombinant protein product for bone grafts, with the FDA denying the Franklin, TN-based company a green light to sell the therapy in January and requesting more information. BioMimetic has submitted the info, and the agency is weighing a potential approval for foot and ankle fusions, opening the doors to a key market for the protein therapeutic, called Augment Bone Graft.

Allergan to acquire SkinMedica – 16 Nov 12

http://www.fiercepharma.com/story/allergan-scratches-expansion-itch-350-million-skinmedica-offer/2012-11-16

The end of the year M&A action seems to be on. Botox maker Allergan has agreed to pay $350 million to pick up skin products company, SkinMedica, Bloomberg reports. The announcement came the same day that U.K. consumer goods company Reckitt Benckiser Group said it would be willing to pay $1.4 billion to buy vitamin maker Schiff Nutrition International. Thatoffer was an overbid of the $1.2 billion that drugmaker Bayer already extended for Schiff. The Allergan deal comes as the company is looking at getting out of the Lap-Band weight loss device market, a product that has been controversial and is seeing falling sales. Dermatology drugs and products are a popular area right now. In September, Valeant Pharmaceuticals said it would pay $2.6 billion to buy dermatology specialist Medicis Pharmaceutical.

Sistema to acquire Veropharm – 12 Nov 12

http://www.fiercepharma.com/story/sistema-aims-buy-russias-veropharm-potential-636m-deal/2012-11-12

It’s official: Russian conglomerate Sistema is government-approved to buy Veropharm, a fast-growing generics maker that’s currently operating under the aegis of pharmacy retailer 36.6. According to RIA Novosti, Sistema could pay up to $326 million for 36.6′s 51.8% stake in Veropharm. In fact, Sistema has Russia’s blessing to take over Veropharm completely, by buying out minority shareholders. When the approval was announced, Veropharm’s shares leapt by 9.7%. The government approval is contingent on “prescriptions” to preserve market competition, the Federal Anti-Monopoly Service said.

Sun Pharma acquirs DUSA – 8 Nov 12

http://www.fiercepharma.com/story/sun-joins-dermatology-rush-230m-dusa-buyout/2012-11-08

Dermatology is hot. Valeant Pharmaceuticals has been snapping up skin-remedy companies, including its recent $2.6 billion deal for Medicis. Novartis’ generics unit Sandoz agreed in May to buy U.S.-based Fougera Pharmaceuticals, to become the biggest player in dermatology generics. Now, India-based Sun Pharmaceutical is joining the party. It’s buying U.S. drugmaker DUSA Pharmaceuticals for about $230 million, or $8 per share, a 38% premium to yesterday’s closing price. The key prizes: DUSA’s Levulan combination therapy, used to treat non-hyperkeratotic actinic keratoses, and BLU-U, used to treat acne.”DUSA has proven technical capabilities in photodynamic skin treatments, with USFDA approved manufacturing,” Sun Managing Director Dilip Shanghvi said in a statement. “DUSA’s business brings us an entry into dermatological treatment devices, where we see good growth opportunities.”

Takeda acquires Envoy Therapeutics – 6 Nov 12

http://www.fiercebiotech.com/story/takeda-snaps-cns-drug-developer-envoy-therapeutics-140m-deal/2012-11-06

Japan’s Takeda has moved in to snap up a Florida biotech equipped with some novel CNS drug technology and backed by a Nobel Prize-winning scientist who’s played a prominent role in the field. The Japanese pharma giant will pay up to $140 million for Envoy Therapeutics in an upfront and milestone payments, possibly laying out some healthy returns for the investors behind a drug developer launched three years ago with $8 million in venture cash, including money from Takeda’s venture arm.

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