The Big Red Biotech Blog

M&A Activity - Usual Suspects

Fierce Biotech reports on latest Moody analyst's take on M&A activity for 2013 in the pharma industry. The news was similar to predictions that I've seen for the past couple of years -- that being a few cash flush Big Pharma players will be looking for bolt on acquisitions from the biotech flock to bolster their pipelines -- to help fill in lost sales due to patent expirations within the existing product portfolio.

Potential big acquirers on the latest list included: Pfizer, Novartis, Roche and AstraZeneca. Their purposrted prey might include these analysts favorites: Theravance, Onyx Pharmaceuticals and Cubist Pharmaceuticals. There is no particular word out there that this is actually happening as we speak but these companies have profiles the analysts love to love as acquisition targets due to their relatively smaller size, existing commercial products and current pipelines.

In the past (May 2011), rumors have circulated that AZ was interested in buying Cubist for its antibiotics versus MRSA.  So some of the candidate deals on the table are not new notions -- at least for analysts.

Posted by Bruce Lehr Apr 23rd 2013.

Timmerman Recommends These Biotech Tweeters

Luke Timmerman put together his definitive list of biotech movers and shakers that you should follow on Twitter (or at least a group of interesting Tweeters who offer insight in their areas of expertise). Luke should know, so check this esteemed "A list" out.

See Xconomy.

Posted by Bruce Lehr Sep 24th 2012.

 

WSJ Reports BMS Still Interested in Amylin

Today's WSJ reports Bristol-Myers Squibb is still interested in acquiring Amylin (mkt cap $3.6 B) -- as one of its larger pearls.  Amylin reportedly turned down and offer from BMS earlier this year of $3.5 B -- which has triggered some furor among its shareholders -- notably one Carl Icahn who owns about 9% of the company's shares.

Amylin's lead drugs Byetta and Bydureon for the treatment of diabetes would help complement the BMS offer that includes drugs like Onglyza (co-marketed with AstraZeneca) and a drug under development called dapagliflozin.  The world wide diabetes market is expected by IMS to reach up to $48 B by 2015 -- making an Amylin acquisition attractive to BMS to replace revenue losses from medicines with expiring drug patents.  In that regard, Amylin would appear to fit neatly into BMS' string of pearls strategy for growth.

Posted by Bruce Lehr Apr 6th 2012.

Icahn Rattles Saber at Amylin Board

Amid market rumors this week that Amylin's board had rejected a $3.5 B takeover bid from BMS, with little or no word of the event, Carl Icahn seized the opportunity to attack.  Icahn (Amylin's third largest shareholder) criticized the Board for failing to discuss the supposed offer publicly and began his saber-rattling to raise a proxy fight to replace the current Board to one more friendly with "the sell the company posture". 

Icahn has a history of buying into companies when they are weak to force changes. He has successfully infiltrated both Biogen Idec and Genzyme in the recent past. Now, it looks like Amylin should prepare itself for the upcoming battle. See Seeking Alpha, Fierce Biotech, and PharmaGossip.

 

 

 

 

Posted by Bruce Lehr Apr 5th 2012.

Amylin Acquisition Comments Consolidated

By now you all know that Amylin is rumored to be in play after word was leaked that the company recently turned down a $3.5 B offer from BMS to be acquired.  Once word hit the market, Amylin's stock price shot up by 55% yesterday to $23.77 per share.

Will Amylin Be Acquired? W hat The Wags Say… // Pharmalot.

Now various analysts are weighing in on how an acquisition of Amylin by a member of big pharma makes ultimate sense.  It is acknowledged that the BMS offer starts the floor price for bidding and a final sales price would make sense in the $25-$30 per share range (most folks tending toward low end of the range).  Companies mentioned as potential suitors include AstraZeneca, Roche, Novartis, Takeda, Johnson & Johnson, and Sanofi to at least consider a bid.

AstraZeneca has also been mentioned as a possible partner who could sign up to help Amylin represent its product in the EU.  If that were to occur, Amylin may not have to or choose to sell under those circumstances.  See Seeking Alpha stories one and two, and Fierce Biotech.

Given the revenue gaps being experienced by some of the companies above and their strength in selling to the diabetes market, odds seems to be good that one of these companies may make a higher offer.  Since, Amylin stock was at $15+ per share only a few days ago, it will be hard for their board to justifying a rejection of another offer in the mid-20's.

Posted by Bruce Lehr Mar 29th 2012.

Place Your Bets on the Onyx Auction Winner

According to Fierce Biotech, GSK or Pfizer have been named as the front runners by industry observers as most likely to acquire Onyx.  Takeda was also mentioned as being in the race. Onyx makes Nexavar (kidney cancer) and has the hotly watched carfilzomib (multiple myeloma) under FDA review.  Analysts project Onyx revenues more than doubling in the next 5 years. 

That will help any acquirer fill in some of those nasty revenue potholes caused by drugs going over the patent cliff. Let the bidding begin and place your bets on the winner.

Posted by Bruce Lehr Dec 1st 2011.

Pfizer Scales Back Unit Sell Off

Pfizer says it is now considering selling its animal health and nutrition businesses -- which together account for about $5.5 B of its combined $68 B corporate sales. This is a more modest approach than what Ian Read had spoken about earlier in the year.  Earlier, he had suggested that Pfizer might sell everything other than its innovative drug business in order to get back to its core offering. 

Now Pfizer says it will hang on to its established products division ($10 B in revenues) that contains its generic drug portfolio. Pfizer will also keep its consumer healthcare business ($2.7 B).  Both of these units had been previously mentioned as potential sales candidates.

In the meantime, JP Morgan has been enlisted to sell off the animal health buiness, and Centerview and Morgan Stanley will be entrusted to deal with the nutrition business. The deals might take as much as 24 months to pull off according to company spokesmen.  Eli Lilly has been mentioned as a possible taker for animal health, and Nestle or Danone might be fits for the nutrition group. See the FT.com story.

 

 

Posted by Bruce Lehr Oct 24th 2011

Wall Street Elements Floating BMS Acquisition Rumors

Ok, so technically this probably isn't a rumor.  But, Fierce Biotech did report today on comments from the Wall Street analysts from Jeffries that BMS is doing so well that it would be a likely acquisition candidate.  I'm not sure how much difference there is between them actually being in play and having  influencial analysts group suggest 'they should be in play'.

In any event, on the heels of BMS' good fortune in getting Yervoy approved for the treatment of advanced melanoma, as well as making out with Eliquis (apixiban) for anti-clotting, the Fierce article names Pfizer as a Big Pharma company likely to be excited to acquire BMS.  This is largely explained due to BMS expected improved positive cash flow from the above drugs as they penetrate the market, coupled with Pfizer's own cash flow dearth's resulting from drugs like Lipitor going generic.

And conveniently, Pfizer is partnered on Eliquis with BMS.  A match made in pharma heaven eh?  I don't know.  I would have thought Pfizer learned a lesson on downsides of its last two mega-deals with Pharmacia and Wyeth. But what do I know?

 

Posted by Bruce Lehr Sep 19th 2011.

'GSK to Buy HGS' Rumor Persists

Fierce Biotech reports that rumors are heating up (again!) that GSK will make as move to buy Human Genome Sciences (HGS) as the latter's stock price is down.  GSK, of course, partners with HGS on its recently approved Benlysta for the treatment of lupus.  With HGS stock down, analysts project that GSK coudl actually acquire the company for less than Benlysta's market value -- which would be a good deal indeed.

HGS is still chugging away at launching Benlysta -- building a commercial team to drive revenue and transform the company into a full fledged biotech -- not just a development group without a commercial product.  But as a one hit wonder, without substantial revenue flowing in at the moment, HGS is vunerable to takeover and GSK is the most likely suitor. Even rumors of the takeover haven't been sufficient to bump up HGS' stock value.  It may be only a matter of time.

 

 

Posted by Bruce Lehr Aug 25th 2011.

India Pharma Companies Stay In Play

According to The Economic Times via the Pharmalot blog, Takeda Pharmaceuticals is seekign to purchase an Indian pharma company and is considering both Cipla and Lupin.  Either company would give Takeda a beach head in the generics market in India, with Cipla as No. 2 in market and Lupin at No. 5.  According to McKinsey, the India pharma market will grow from today's $12 billion to more than $55 billion by 2020 making it one of the world's fastest growers.

Rumor has it that Lupin is asking $1.5 billion for its assets or 17 times sales.  Wow!  Good selling price if you can get extract it from the buyer. A Lupin spokesman however termed the rumor a "baseless market speculation."  Sounds like they are ready to sell any minute doesn't it?

This no doubt gives India regulators heartburn as they have already expressed concern that both Western and Japanese Big Pharma are buying up the domestic Indian companies.  The fear is that the acquirers will drive up prices on medicines for India's copious poor populations -- making many medicines unaffordable.  This is one reason that applications for compulsory licenses to Western drugs still under patent have also been rising.  This is one market dynamic to watch.

Posted by Bruce Lehr Aug 24th 2011.

Roche to Receive Early Approval for Melanoma Treatment

Reuters reports that Roche's experimental melanoma drug vemurafenib appears headed for an early approval by the FDA, well ahead of its scheduled November 11 date. The agency is apparently encouraged by some dramatic evidence that the drug significantly cut the risk of death versus chemotherapy.

Vemurafenib, which will be named Zelboraf on the market, is likely to join a roster of new cancer drugs to gain FDA approval. Others include Bristol-Myers Squibb's melanoma drug Yervoy and J&J's prostate cancer therapy Zytiga, and Dendreon's Provenge also for prostate cancer.  Peak sales of vemurafenib have been estimated at more than $700 million a year.  See Fierce Biotech.

The Pharma Strategy blog notes that Roche and BMS, the manufacturers of ipilimumab (Yervoy), have now met to discuss and finalize the much anticipated combination trial of Zelboraf and Yervoy.  It will be interesting to see if the combination will extend survival even further in patients with the BRAFV600E mutation.

Yervoy was launched recently with a $120K price tag for four infusions.  Sales are apparently were good in Q2.  It is given as a 3mg infusion every three weeks for 4 cycles, over a 3 month period.  It will be interesting to see what the Zelboraf monthly price will be, assuming it successfully garners approval.   Should the combination work out in the future, the cost of treating metastatic melanoma will likely become even more expensive despite only small incremental survival benefits. 

It will also be interesting to see how this expensive cocktail with relatively modest survival benefits will fare at this high cost - especially vis a vis Dendreon's Provenge.  The latter offers about a 4 months survival benefit at a cost of $93,000 per patient that is incurred in about 1month of treatment.  Dendreon has reported issues in getting physician's to prescribe the cost dense Provenge due to reimbursement concerns.  Will a Yervoy and Zelboraf cocktail surmount this hurdle?  If the cocktail does succeed, is that indicative of a better patient benefit or a better selling strategy to prescribers and third-party payers?

 

Posted by Bruce Lehr Aug 9th 2011.

Seattle Genetics' Adcetris Gains FDA Panel Endorsement

Seattle Genetics, as expected, got the endorsement of an FDA advisory panel to approve Adcetris (brentuximab vedotin) for the treatment of Hodgkin's lymphoma.  If the drug is now approved by the FDA for sale (decision Aug 30th), it will be the first approved antibody drug conjugate (ADC) on the market.  Another FDA expert panel will be discussing this afternoon whether or not Adcetris should also be recommended for the treatment of anaplastic large cell lymphoma (ALCL). 

"Brentuximab works and it works well. People with Hodgkin's lymphoma will have another option for treating a terrible disease," said Michael Sekeres, an oncologist at the Cleveland Clinic. See Xconomy. 

Seattle Genetics will not only be gaining its first approved drug but as an ADC the first one of that class.  This is the second drug this year from the Seattle biotech pool, besides Dendreon's Provenge, that represents a novel treatment type for a cancer.  Fierce Biotech notes in an article today that Dendreon and Seattle Genetics would both appear to be high on Big Pharma's short list of acquisitions.  Cancer therapies are expected to grow twice as fast as the rest of the pharmaceutical market (according to IMS Health) and many novel oncology drugs have been approved so far in 2011 (see next post on Yervoy).  Indeed, look for more acquisitions in the oncology space to happen.

 

Posted by Bruce Lehr July 14th 2011.

 

 

Pharma Transactions and Rumors

 A few transactions and rumors of transactions happened today in the pharma world.  Firstly, Biomarin announced that it will be acquiring Pfizer's Shanbally, Cork, Ireland manufacturing plant.  The price tag is $48.5 million - which Biomarin says is only 20% of the cost it would have to incur if it built a new plant from the ground.  Biomarin expects to make its mucopolysaccharidosis drug GALNS in the facility when it is approved in 2015. See In-Pharma Technologist.com.

Icagen shares went up 156 percent on the news that Pfizer may be acquiring the company for its new pain drugs.  The news became public through an SEC filing Pfizer made and the fact the firms were talking about something was confirmed by Icagen. Pfizer already has a deal in place with Icagen that calls for milestone payments up to $359 million and owns 14 percent of the company. See Fierce Biotech.

Genentech cut a novel deal with Forma Therapeutics to acquire an early stage cancer drug program from the latter.  The deal involves a therapeutic still in animal testing that blocks cancer cell metabolism.  Genetech will make an upfront payment, provide research support, and agrees to milestone payments if the drug hits certain development goals. Genentech can then acquire the program (asset) with no royalty payments.  The deal would however allow Forma to pay off its investors and remain and independent company to pursue other similar targets than could be sold in like deals. See Xconomy.

Posted by Bruce Lehr June 27th 2011.

 

 

 

AZ May Make Its Move to Buy Cubist

Market rumors have it that AstraZeneca may be looking to acquire Cubist Pharmaceuticals and its Cubicin antibiotic for the treatment of MRSA.  Cubicin had sales in excess of $600 M in the US in 2010 and many analysts project it will become a blockbuster with sales breaching the $1 billion mark. Couple the revenue, with Cubist's settlement of a patent dispute with Teva last month, which lessens the near term chance of generic competition, and you have an attractive acquisition candidate.

AZ may be that buyer -- it already has rights to sell Cubicin in China -- but Teva and J&J are also rumored to be considering this buy. See Fierce Biotech.

 

 

 

Posted by Bruce Lehr May 20th 2011.

Elan now Sitting Duck for Big Pharma Takeover?

PharmaGossip via an article from the Independent raises the question as to whether Elan is now a very attractive takeover candidate for Big Pharma now that it has sold its drug delivery business to Alkermes.

PharmaGossip: Elan move makes it a sitting duck for big boys -- Independent.ie.

Elan now is a "pure" neuroscience play with potentially attractive programs at at multiple sclerosis, Alzheimer's and Parkinson's disease. It has also lowered its debt from about $770 M to only $270 M and has cash balances hovering around $500 M. 

This should make it look a lot prettier to suitors and likely accounts for its stock increasing by 8% last week. Rumors suggest that J&J could be first in line as it already owns 50.1% of Elan's Alzheimer's unit to foot the rest of the bill to acquire it. Posted by Bruce Lehr May 16th 2011.  

Time to Takeover Shire?

The analysts have spoken so it must be so.  Shire is a no brainer takeover candidate and it is only a matter of time for some Big Pharma to gobble her up. GSK and Pfizer, with their big cash reserves and announced forays into rare disease areas, would seem to be leadign suspects to make a move.

Shire is deemed attractive as a supplier of niche product to the ADHD market and to various rare disease applications.  It's differentiated.  It's profitable.  It has a pipeline.  It has said that it expects to grow by 15% annually through 2015.  What's not to like?

Shire CEO Angus Russell says, "We're an independent company, but we're a public company as well, and on behalf of our shareholders obviously we always have to entertain approaches that are significantly value-enhancing."  See Fierce Biotech.

Make me an offer our shareholders can't refuse. It's only a matter of time as it is so lovely in the Shire.

 

 Posted by Bruce Lehr May 13th 2011.

 

Takeda has NOT agreed to buy Nycomed --- Yet!

Takeda issued a statement today that it "has not agreed to any such agreement [with Nycomed] as suggested by certain newspaper publications."  Damn newspapers!

Of coure, they didn't say they weren't n the process of purusing such an agreement.  Takeda merely indicated it wasn't in the habit of commenting on market rumors (other than to say we don''t have an agreement in hand). 

Analysts say Takeda's profits are headed for a 13 year low on the heels of generic competition for its top-selling Actos.  So many are prediciting the "Real Deal" to be announced within the month and possibly by next week. See Fierce Biotech.

 

Posted by Bruce Lehr May 13th 2011.

 

 

Takeda in Talks to Buy Nycomed for $14 Billion

Takeda is rumored to be in discussions with Nycomed to purchase the latter company for between $12 and $14 billion.  The former is said to be lining up financing with several banks and has hired Deutsche Securities as an advisor on the deal.

PharmaGossip: Takeda in Talks to Buy Nycomed for $14 Billion: Report - CNBC.

A purchase of this magnitude would be the second biggest takeover ever by a Japanese firm.  In acquiring Nycomed, Takeda would pick up the former's to selling drug pantoprazole for heartburn (complementing its own Prevacid), the lung drug roflumilast, sold as Daxas in Europe and Daliresp in the US, for the treatment of COPD.

The purchase would also give Takeda a presence in Europe and in emerging markets which have been a focus of Nycomed's growth. Emerging markets accounted for 39 percent of Nycomed's 3.2 billion in 2010 revenue with sales in Latin America up 29.8% and in Russia up 23.3%.  Nycomed also bought a majority stock position in a Chinese pharma company, Guandong Techpool Bio-Pharma, last year.  Takeda would also pick up Nycomed R&D operations in India.

This purchase would seem similar in strategic intent to Takeda's nearly $9 billion purchase of Millenium Pharmaceuticals in 2008.  It will increase the strength of Takeda's pipeline in some targeted therapeutic areas: osteoporosis, gastroenterology, and respiratory diseases.

 

Posted by Bruce Lehr May 12th 2011.

Insitutional Investors Play Tug-o-war with Actelion future

Who will win control of Actelion's board?  Will it be Elliott Advisors and sympathizers or their opponents BB Biotech AG, Rudolph Mag and allies?  Right now it looks like a neck and neck battle. The US consulting group Georgeson is working a straw poll with Actelion investors on Elliott's behalf in preparation for battle at the May 5th annual meeting.  They say a group of International Institutional investors will decide it.

Elliott tells the WSJ it has the upper hand now -- what else would they say?  We've lost?  They say International Shareholder Services will back their candidates.  It will come down to a close vote at the May 5th meeting and will hinge on a group of 18% in the middle who are primarily instituional investors. 

Again, we won't have to wait long -- May 5th hovers in the near future. See Fierce Biotech and warm up the ropes.

 

Posted by Bruce Lehr April 22nd 2011.

 

Biotech Take Over Targets Nominated

Fierce Biotech published today some analyst opinions (for what they're worth) as to which companies may be the next on the list of take over targets as Big Pharma companies go shopping to fill their bare pipelines with approved drugs. The nominees are:

• Human Genome Sciences.  Hardly a surprise with its newly approved Benlysta hitting the market and projections that it will become profitable for the first time next year after 20 years of red ink.  Its partner in Benlysta, GSK, is widely expected to be the likely acquirer.
• Acorda.  Also the ownwer of a newly (2010) licensed drug, the oral MS drug Amyra.  Amyra also may get a patent extension which makes it and Acorda more valuable.  Many players may be suitors in this situation.
• Forrest Labs.  The company is said to be attractive for its portfolio of specialty pharmaceuticals that faces somewhat less generic competition.  It's been on the acquisition list for 3 years now.

That's the Fierce reported list from today.  Of course, Celgene and Actelion have also been mentioned as possible candidates in many circles.  And Cephalon is under hot pursuit by Valeant right now. Get ready shoppers.

 

 

 

Posted by Bruce Lehr April 19th 2011.

Amgen Investors Clamor for Dividends and R&D Results

 
Amgen will be holding its shareholder meeting soon.  Supposedly they will announce their first ever dividend for its investors.  Analysts say they and investors will be looking for news of pipeline projects.  Acerbicly one comments, "They have been talking about Phase II's for 5 years and nothing has come of it."  AMG479, a new drug for pancreatic cancer, is the top pipeline candidate. It's been dubbed a blockbuster contender. We await the news. See Fierce Biotech.

Posted by Bruce Lehr April 18th 2011.

 

BB Biotech Backs Actelion Board & Blunts Elliott's Plan

According to a Reuters story today, BB Biotech, holder of 5% shares, has decided to back Actelion's management in opposition to Elliott's proposed slate of new board members.  The battle for the company is to be staged at the May 5th shareholders meeting.

BB Biotech's move, though it also has been critical of the Actelion management in the recent past, will l increase the stake held by shareholders backing the company to nearly 15 percent. Ellioot will have its work cut out for it in any attempt to unseat the board.

"BB Biotech will conduct itself as a critical shareholder demanding good corporate stewardship, but it shall also continue to maintain a constructive relationship with the management and the board of directors of Actelion. Therefore, we intend to support the proposals being put forward by Actelion," the FT quoted spokespersons for BB Biotech as saying.

Another crisis averted.  Ho-hum.

 

Posted by Bruce Lehr April 17th 2011.

Actelion Would Consider Sale -- if Price is Right

Actelion is rumored to be a ripe take over candidate.  One of its lead investors, Elliott Advisors, is pushing for its sale and even putting its own slate of board members up for election at the annual meeting.

Actelion's management says it would consider any credible offer -- but it hasn't ever received one.

Actelion would consider sale at right price.

The company further states that this would be a poor time to sell as pharma and big biotech's are seeking deals but not looking to overpay. Actelion characterizes these potential suitors as "risk adverse".  Nevertheless, they would sell if the price was right and shareholders would realize better value on sale then from remaining an independent developer. 

However, Actelion fully expects to offer the most value to its shareholders at present through independence and developing its own pipeline. It characterizes its pipeline as robust and balanced.  The lead candidate from it being maciteritan that would be the follow on to its main bread-winner Tracleer (85% of sales) for the treatment of PAH.

To blunt Elliott efforts at board takeover, Actelion has nominated former GSK CEO Jean-Paul Garnier and former S-P CFO Robert Bertonlini as new board members.  Garnier if elected would be in line to be elevated to Chairman when current Chairman Robert Cawthorn retires.  Up to now, Actelion has remained fiercely independent and appears to want to stay that way unless someone throws big money at them.

 

Posted by Bruce Lehr April 13th 2011.

To Novartis: No Roche for You!

 Andre Hoffman, vice chairman of Roche and spokesman for the family group of shareholders (own 45.01%), says Roche is NOT for sale to Novartis or anyone else.

PharmaGossip: Roche will not be for sale, vice chairman tells newspaper | Reuters.

The issue arose when one of the famly pool members, Maja Oeri, decided to exercise her shares independently.  Some believe this could make the company vunerable to takeover -- and Novartis is a likely suspect as it owns a third of the voting rights and tried to do so previously in 2004.

Hoffman however dismisses the prospect.  He says that the Roche strategy and business model do not match Novartis'. He says "a fusion of Roche and Novartis makes even less sense than it did five or ten years ago."

Posted by Bruce Lehr March 29th 2011.

Merial and Intervet Opt for "No Deal" on Planned Merger

Sanofi's Merial and Merck's Intervet have called off their planned merger.  The two companies said the regulatory issues relaed to antitrust considerations were too much.  If combined, the business would have represented $5 billion in sales but analysts say the two would have had to divest about $500 million in assets -- particularly in the poultry vaccine area.

Down On The Pharm: Implications of the Merial/Intervet "No Deal".

Both companies are able to walk away without penalty and each will assume their own expenses related to due diligence - no harm, no fowl so to speak.

The lack of a deal may result in other buyers coming forward for some or all of the assets.  Seven of the top 12 publicly traded big pharma companies have some animal health businesses.  Several big pharma companies appear to have chosen a diversification strategy to even out dips from their pharma business often related to patent expirations.  Pfizer has indicated a willingness to sell off its Fort Dodge Animal Health business as its CEO has indicated a desire to focus its assets and attention on th epharma business alone. FDAH generated $3.58 billion in 2010 sales. 

Potential buyers for FDAH might include Eli Lilly, Bayer and Novartis according to industry watchers.  All five big pharma companies who reported on their animal health business lat year reported growth, including Sanofi (2.6%), Bayer and Lilly (15%), and Pfizer (29%).  Pfizer's big increase was due to assets acquired in its Wyeth purchase though and don't represent organic growth. Nevertheless, their should be suitors if either Sanofi or Merck are looking to sell their assets.

 

 

 

 

Posted by Bruce Lehr March 26th 2011.