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.
Private Equity firms snap up 50% of Rattapharm – 15 May 12
Italy’s Rovati family has found its new partners, Bloomberg sources say. Two private equity firms will buy a 50% stake in the family’s drug maker Rottapharm, in a deal that values the company at about €1.7 billion ($2.2 billion). Under the agreement, Avista Capital Partners and Clessidra Capital Partners will each own a 25% stake in the company, leaving the Rovatis majority control. The family had been hunting for minority investors since last year. At a $2.2 billion valuation, this deal falls short of the family’s asking price; the Rovatis had valued their company at around $2.6 billion. Its 2011 revenues are estimated to be about €600 million ($770 million).
Merck KgaA reveals $385M in cuts – 15 May 12
Merck Serono employees in Geneva may have won a battle, but do they have any hope of winning the war? Looking at the cost-cutting numbers Merck KGaA laid out today could be disheartening. After reporting a 48% decline in first-quarter profits (skewed by a one-time gain last year), the German company said it’s aiming for €300 million ($385 million) in pharma-related savings by 2014–and €120 million of that comes from shuttering Serono’s Geneva site. The now-unionized workers at Merck Serono’s Swiss headquarters are fighting that shutdown, which they say endangers 1,250 staffers and 250-odd longtime contractors. They’ve been protesting, petitioning and appealing to Geneva officials for backup. By threatening to strike, the employee group persuaded company officials to extend a required “consultation period” to June 4–giving the union more time to propose alternatives.
Big Pharma looks at Amylin’s books – 15 May 12
A who’s who of drug makers are eyeing Amylin Pharmaceuticals for a possible buyout. As Bloomberg reports, the world’s biggest drug makers have lined up to take a look at Amylin’s books as the U.S.-based company prepares to entertain a first round of bids. Among the Amylin shoppers are 6 of the Big Pharmas: Pfizer, AstraZeneca, Sanofi, Merck, Roche and Bristol-Myers Squibb. Japan’s Takeda Pharmaceutical is also checking the company’s stats, sources tell Bloomberg.
GSK buys Cellzome for $98M – 15 May 12
Four years after it first clambered aboard Cellzome’s drug discovery platform, GlaxoSmithKline ($GSK) has opted to buy out the company for $98 million, snagging full rights to a pair of early-stage inflammation programs and a proteomics technology that it plans to use to screen drug candidates. In the deal GSK will cherry-pick the assets it likes, leaving room for a spinoff company to take shape with the unclaimed portion of work being carried out in labs in Cambridge, U.K. and Heidelberg, Germany
Glaxo goes hostile in its quest to buy Human Genome Sciences – 9 May 12
Prepare yourself for a drawn-out buyout battle–and lots of debate about the lupus treatment Benlysta. GlaxoSmithKline plans to launch a hostile bid for Benlysta partner Human Genome Sciences, without hiking its $2.6 billion offering price. HGS stiff-armed Glaxo’s friendly offer of $13 per share last month. The U.S.-based company said the price undervalued a., Benlysta’s sales potential, and b., the promise of two in-development drugs it’s working on with Glaxo. HGS then brought in the investment bankers for advice on its quote-unquote strategic alternatives.
Novartis buys Fougera to become #1 in skin drugs – 5 May 12
Another day, another deal. Novartis has snapped up Fougera Pharmaceuticals, a U.S.-based maker of generic skin treatments, for $1.5 billion. The buyout will make the Swiss company’s generics unit, Sandoz, the dominant player in dermatology knockoffs–and will add to Novartis’ top line at a crucial time. Novartis’ top drug, Diovan, loses market exclusivity later this year, putting the company in line for a billion-dollar hit to sales. New drugs such as the multiple sclerosis treatment Gilenya can help somewhat, but M&A is another key part of the strategy for pumping up revenue. “Certainly generic pharmaceuticals is a very good way, in these cost-conscious times, to make up revenue
Thermo Fisher Scientific acquires Doe & Ingalls – 1 May 12
Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today announced that it has acquired Doe & Ingalls Management, LLC, a premium provider of specialty production chemicals and customized supply-chain services to the life sciences and microelectronics industries, for approximately $175 million in cash. Based in Durham, North Carolina, Doe & Ingalls operates service centers in key biopharma and microelectronics hubs in North America. The business generated 2011 revenue of approximately $110 million. “Doe & Ingalls’ comprehensive line of production chemicals and related services is highly complementary to our industry-leading channel capabilities, and will enhance the growth opportunities across both portfolios,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “Doe & Ingalls will strengthen our value proposition by adding products and services that address the production market within our extensive customer base, which we have historically served primarily from a research perspective.”
Watson unveils $5.6B offer for Actavis – 26 Apr 12
The ink has dried, and now it’s official: Watson Pharmaceuticals ($WPI) has agreed to buy its Swiss-based rival Actavis. The price–€4.25 billion ($5.6 billion) up front, plus a potential €250 million worth of stock in milestone payments–was about what the gossips expected, a total of $5.9 billion. There are plenty of reasons to applaud the combo: It will give Watson additional heft in the margin-shaving generics market, plus send it deeper into international markets, both in Western Europe and in emerging markets such as Eastern Europe and Russia.
Amgen jumps into generics with $700 deal to buy MN Pharma – 25 Apr 12
Big Pharma has been moving into emerging markets and shoring up sales with generics for some time. Now, the biggest of Big Biotech is joining in. In a twofer deal, Amgen has agreed to pay $700 million for Turkey’s Mustafa Nevzat Pharma, which makes injectable generics for sale in its home country and the surrounding region.
Life Technologies expands GIBCO manufacturing – 24 Apr 12
The use of genetic sequencing in drug development is expanding and Life Technologies is lining up its pieces to get more of that market with a manufacturing plant expansion in Scotland. The company says that Scottish economic development agencies are providing some help so that it can invest $20 million in its operations in Inchinnan. The expansion will increase production of its GIBCO cell culture products. The company said it expects the site up and running next year and actually shipping products in 2014. It will serve markets in Europe, the Middle East and Africa. There are currently 500 employees working at its facility at Inchinnan.
Pfizer divest Nutrition unit to Nestle – 23 Apr 12
As expected, Nestlé has prevailed in the steeplechase for Pfizer’s nutrition unit. The price, however, was better than expected: $11.85 billion, rather than the $10 billion estimated by analysts. All the more cash for Pfizer to share with investors and invest in its core pharma business. The nutrition-unit sale comes as Pfizer is readying a spinoff of its animal health business. The drugmaker announced its plans to shed both units last summer as part of a restructuring designed to streamline the company and focus attention on its branded-drug nucleus.
Roche walks away from effort to buy Illumina – 18 Apr 12
Roche said it wouldn’t extend its $51-per-share bid for Illumina, after voting tallies indicated that shareholders backed the gene-sequencing company’s incumbent board candidates, rather than Roche’s slate
Valeant Pharma continues buying spree – 18 Apr 12
Valeant Pharmaceuticals made the M&A news again today: This time, the Canadian drugmaker scored some assets from Atlantis Pharma, a Mexican branded-generics company, for $71 million. The small deal, which gives Valeant a boost in the Mexican market, also adds one more piece to the puzzle CEO J. Michael Pearson is assembling, one deal at a time.
Takeda buys URL Pharma for $800M – 11 Apr 12
Takeda Pharmaceutical has nabbed another drugmaker. This time, the Japanese company is buying Philadelphia-based URL Pharma for $800 million upfront, plus potential follow-up payments. The deal gives Takeda the gout drug Colcrys, which brought in $430 million for URL last year. That hunk of revenue–expected to grow this year as Colcrys further establishes itself in the anti-inflammatory market–will help make up for sales lost to generic versions of stomach-acid fighter Prevacid, The Wall Street Journal reports. In fact, Takeda expects the URL deal to add $550 million to its top line this year
Covidien buys Oridion for $346M – 5 Apr 12
With the $346 million acquisition of Israeli device maker Oridion Systems that Covidien announced today, it is getting a company still operating under an FDA import restriction tied to GMP concerns. The all-cash deal was announced today, and Dublin-based Covidien, which also makes medical devices, expects the deal to close by June 30