Mergers and Acqusitions

King nabs Alpharma for $1.6B

Calisha Myers — Mon, 24 Nov 2008 10:32:19 -0500

King Pharmaceuticals, which has been courting Alpharma for months now, has finally gotten its wish. Alpharma rejected King's first offer of $1.4 billion back in September--although it was a 49 percent premium over Alpharma's share price on August 4. And again slammed King's tender offer of $37 a share last month, calling the offer "financially inadequate." Although Alpharma claimed it had other companies interested in a buyout, King pushed foward with the hostile bid. But today the companies announced a $1.6 billion merger agreement under which Alpharma shareholders will sell to King for it's latest offer of $37 a share. The tender offer that was to expire on Friday has now been extended until December 19. The sell is expected to be completed by the end of the year.

So why the change of heart? Well, King had threatened a proxy battle if Alpharma continued to reject its offers. But here's how Alpharma puts it: "The transformation of Alpharma over the past two years has created tremendous shareholder value, and we have consistently said that we will act in the best interest of shareholders," commented Dean Mitchell, Alpharma's President and CEO. "Therefore, after careful evaluation, our Board determined that a combination with King is in the best interest of our shareholders and provides them immediate access to this value. We believe the combined company has a compelling strategic logic and will create a strong company for both shareholders and employees. We look forward to working with King's team to integrate our companies."

- check out the joint release

Cardiovascular Systems to merge with Replidyne

John Carroll — Tue, 04 Nov 2008 10:51:27 -0500

Cardiovascular Systems Inc. announced that it has forged a merger agreement under which it will merge with Replidyne. Under the terms of the agreement, Replidyne will issue new shares of its common stock to CSI shareholders whereby former CSI shareholders are expected to own 83 percent of the combined company, and Replidyne shareholders are expected to own 17 percent of the combined company. Replidyne was a 2006 Fierce 15. Release

Q-Med gets $502M offer

Maureen Martino — Mon, 03 Nov 2008 10:48:58 -0500

In a brief statement, Swedish biotech firm Q-Med said it has received a $502 million offer from from Ivytan, a firm owned by private equity group EQT V and Lyftet Holding. "The Board will evaluate all aspects of Ivytan's offer and will make any decisions that the situation may require," the company said in a statement. Q-Med develops and markets medical implants.

- see the release

Related Article:
Q-Med cuts 50 workers in Uppsala

BioTie buys Germany's Elbion

Maureen Martino — Fri, 24 Oct 2008 09:44:46 -0400

Finland's BioTie Therapies has agreed to purchase German's Elbion, forming a company that will focus on CNS disorders and inflammatory diseases. BioTie gains ELB353, a Phase I anti-inflammatory drug, Buprenorphine Depot for opioid dependence, and access to Elbion's drug discovery platform focused on central nervous system and inflammatory diseases.

"Bringing together the outstanding pharmaceutical development capabilities and strong clinical pipelines of both companies will create a European leader in the CNS and inflammation market," said Mr. Juha Jouhki, the Chairman of Biotie. Mr Luc Philips, the Chairman of Elbion NV stated that "this business combination is a unique opportunity to combine complementary programs and capabilities with sufficient financial means to reach key value inflection points."

- see BioTie's release

Related Articles:
Gambling therapy flunks Phase II trial (Dec. 2006)
BioTie drug helps blunt thrill of gambling (Feb. 2006)

Novartis pays $115M for Nektar pulmonary assets

John Carroll — Tue, 21 Oct 2008 10:52:51 -0400

Nektar Therapeutics has sold certain assets from its pulmonary business to Novartis for $115 million, leaving the company free to concentrate on developing new therapeutics. And Novartis says it will use the technology to advance new drugs for COPD, asthma and cystic fibrosis.

In the deal Novartis takes control of dry powder and liquid pulmonary formulation and manufacturing assets, including capital equipment and manufacturing facility capital lease obligations. The pact also transfers about 140 Nektar personnel to Novartis. And Nektar will transfer manufacturing and royalty rights to the Tobramycin inhalation powder program, which is already partnered with Novartis.

Nektar will retain its Bayer HealthCare-partnered program NKTR-061, scheduled to enter Phase III clinical trials by year-end, and royalties to Ciprofloxacin inhaled powder, also partnered with Bayer HealthCare. Likewise, Nektar will retain NKTR-063, scheduled to enter Phase II development in the U.S. early next year.

"This agreement will allow us to focus our efforts on the development of novel therapeutics using our PEGylation and conjugate chemistry-based drug development platforms," said Nektar CEO Howard W. Robin (photo). "The transaction also strengthens our balance sheet and significantly reduces expenses. It is a perfect example of our ability to monetize assets that had little future value for Nektar."

- check out the press release
- read the AP story

Lilly CEO defends 'risky' ImClone buyout

Maureen Martino — Wed, 15 Oct 2008 11:03:28 -0400

Some analysts are questioning Eli Lilly buyout of ImClone. They're using words like "risky" and "desperate" to describe the $6.5 billion buyout, which will drain Lilly's cash reserves and force the company to take on debt in the midst of a credit crisis. Those concerns contributed to a 24 percent drop in Lilly's stock over the week that the company announced the deal.

But CEO John Lechleiter thinks heading up a Big Pharma company is all about taking risks, and that Lilly needed a bold move if it's going to overcome its current slump. Lilly hasn't launched a new human drug in three years and faces serious patent losses in 2011. The bigger risk, Lechleiter said, would be to do nothing at all. The buyout is part of Lilly's plan to increase its focus on oncology and biotechnology over the coming years. The company currently has only two cancer drugs, but with the ImClone buyout it gained the best-seller Erbitux along with ImClone's pipeline of five other cancer drugs.

Only time will tell if Lilly's risky move will pay off. "This is what we do every day," says Lechleiter. "We place risky bets on our pipeline. This is what our shareholders expect us to do."

- read the Indy Star article

AZ CEO makes new case for drug partnerships

John Carroll — Tue, 14 Oct 2008 12:03:48 -0400

BioWorld turned in an interesting feature on David Brennan's speech at BioPartnering Europe, where the buzz was all focused on the global economic crisis and the likely impact it would have on biotech. For Brennan, the CEO of AstraZeneca, the crisis makes it even more important for cash-rich pharma companies like AstraZeneca to do more partnership deals.

"Strong companies don't sit around passively waiting for the storm to pass. For AstraZeneca, strategic partnering is priority," he told the group. He then listed the six reasons why:

1. Combining resources creates more value for both parties.

2. Payers and regulators are demanding more and more, and it takes two to deliver.

3. Partnerships add new skills to your company.

4. Partnerships force companies to focus on key disease areas.

5. Years of experience at partnering has improved the whole process for pharma and biotech companies alike.

6. Partnerships are having a bigger impact up the development and marketing chain.

- for more details, go to the BioWorld article

Tranzyme Pharma plots its next financing move

John Carroll — Tue, 14 Oct 2008 11:19:46 -0400

With a Phase III trial scheduled for next year, Research Triangle Park, NC-based Tranzyme Pharma says it is now pondering three key avenues to go forward: partner the drug, raise $60 million from investors or sell the company.

CEO Vipin Garg says that mid-stage data for the lead therapy, TZP-101, are solid. More than 200 patients were enrolled in a study for the drug, which treats severe constipation. The trial results were announced on October 1.

Garg says that he is in talks with six drug companies about a possible partnership or M&A transaction.

- read the report from the Business Journal
- check out the story on the data from the Business Journal

Crisis will spur new biotech deals on worse terms

Tracy Staton — Thu, 09 Oct 2008 10:55:50 -0400

Lots of folks have been looking for the glimmer of a silver lining in the immense cloud hanging over global financial markets. They might look no further than Big Pharma. According to a new Datamonitor report, cash-rich drugmakers are poised to take advantage of the credit crunch, in part because they didn't overdose on the cheap debt that has trapped so many companies now that credit has dried up.

How might this play out for pharma? Acquisitions and licensing deals, Datamonitor says. We all know that drugmakers have been looking to thicken up their pipelines by buying up biotech companies, licensing biotech drugs, and otherwise setting up development deals with the smaller, more innovative firms. And with so many drugmakers--not to mention private equity firms and other investors--chasing these deals, prices have been pretty favorable for biotech.

Now, that could change. Biotech companies are getting caught in the credit crunch, watching their access to capital dry up. And Big Pharma has cash. Biotech could be forced to take less favorable terms in licensing deals, Datamonitor predicts. Either way, pharma is sure to use the market turmoil to snap up their favorite biotechs and biotech products. "[T]he credit crunch provides big pharma with exactly the opportunity it needs to rebuild its ailing pipelines," the report concludes.

- check out the Datamonitor release

French biotechs optimistic about investment, pipelines

Calisha Myers — Tue, 07 Oct 2008 12:44:22 -0400

France Biotech, the country's life sciences association, has released its report detailing the results of its annual survey. The trends? According to survey results, we can expect several deals or mergers between French biotechs and pharma companies within the coming months. And despite the global financial crisis, industry execs are optimistic that there will also be more acquisitions, investments and IPOs. "My bet is that next spring we will see a rally of investments turning to companies that can create a future, are truly innovative," France Biotech chairman Philippe Pouletty said.

In the first half of this year, venture capitalists injected $98 million into the biotech industry. Only one company--Ipsogen--managed an IPO. There were 15 in 2007.

Pouletty, who also heads venture capital company Truffle Capital, expects Sanofi-Aventis to be among the drugmakers pulling in biotechs to help expand its pipeline and make up for revenue lost to patent expirations and generic competition.

Speaking of pipelines, the survey results indicate that French biotechs have 73 products entering the research phase and 98 experimental drugs in mid and late-stage in clinical development phases. Ten biotech products are awaiting marketing approval, including BioAlliance Pharma's Loramyc and Addmedica's Siklos, with four currently available to patients.

- check out the France Biotech release
- get more on the survey results from the Guardian

ALSO: The French pharmaceutical industry seems to be in the throes of huge changes as global pressures hit home. French pharma appears to be seeking the best of both worlds: new, internationally trained management, while maintaining as much family/French control as practically possible. We'll see how they fare. Report

Eli Lilly to buy ImClone for $6.5 billion

John Carroll — Mon, 06 Oct 2008 09:54:07 -0400

In what one analyst quickly termed an "act of desperation," Eli Lilly announced a deal to buy ImClone for $6.5 billion. That's a 51 percent premium over the share price for July 30, when Bristol-Myers offered $62 a share and fired up ImClone Chairman Carl Icahn to find a buyer willing to pay much, much more. Lilly's bid comes in at $70 a share.

"This is an act of desperation on the part of Eli Lilly," David Moskowitz, an analyst for Caris & Co., told Bloomberg. "Lilly will drain substantially all of its cash on the deal. Lilly is already bidding outside the range of what you think would be rational, but these companies are losing big products early next decade."

Lilly's blockbuster Zyprexa is losing patent protection in 2011. And as we've mentioned earlier, oncology drugs in the pipeline are becoming more and more attractive for the pharma set. Lilly already has 13 oncology drugs in its pipeline and now can add several more.

"By bringing together ImClone's and Lilly's marketed oncology products, pipelines, and biotech capabilities, we are taking a very important step forward in addressing the challenges of patent expirations we will face early in the next decade," says Lilly CEO John Lechleiter (photo). "We look forward to working with the ImClone team and their partners to ensure a smooth transition."

- check out the Eli Lilly and ImClone release
- read the article from the Indianapolis Star

ImClone's cancer pipeline big attraction for bidders

John Carroll — Fri, 03 Oct 2008 08:55:08 -0400

Why the bidding war for ImClone, considering that Erbitux has failed to live up to its early billing? BusinessWeek concludes that the answer lies in ImClone's oncology pipeline. After Big Pharma companies turned their backs on cancer development, the biotechs took control of the field. Now Big Pharma wants back in, attracted by the relatively low costs associated with marketing new cancer drugs along with the potential for big returns.

ImClone has been advancing a successor to Erbitux, but the analysts seem to be primarily intrigued by the late-stage IMC-1121B, which works much like Avastin in starving tumors by attacking the blood vessels that feed them. IMC-1121B is in Phase III for breast cancer and in a mid-stage trial for melanoma, kidney and liver cancers.

It all looks very promising, especially if you're looking for a new way to make up for some fading blockbusters.

- read the article from BusinessWeek

ALSO: The Financial Times also notes that pharma's push into the biotech field has stirred rumors that a variety of drug companies could wind up making a play for ImClone. Report

Roche: Economic crisis won't stop Genentech bid

John Carroll — Thu, 02 Oct 2008 11:40:18 -0400

Roche is reassuring everyone that despite all the market turmoil that has occurred worldwide in recent weeks, it's still on track to raise the $43.7 billion it's bid to acquire all the outstanding shares of Genentech. And that's a major issue for the investment field, which sees that deal as a sign that the M&A business isn't completely dead--for now.

A spokesperson for Roche declined, though, to tell the Wall Street Journal if the company plans to bid more than the $89 per share already on the table. Genentech had rejected the offer as too low, but kept the door wide open to a richer bid. Investors, meanwhile, are feeling distinctly nervous about the whole affair. After bidding Genentech shares up to $98, the stock price slipped to $86.50 yesterday afternoon.

- read the report from the Wall Street Journal

ALSO: Biotechs in Europe, meanwhile, say they are feeling the heat. Report

Eli Lilly in talks to buy ImClone

Calisha Myers — Thu, 02 Oct 2008 08:27:34 -0400

ImClone was not bluffing after all. The company rejected both of Bristol-Myers Squibb's offers as "inadequate" and "absurd," with Imclone's CEO Carl Icahn and BMS Jim CEO Cornelius exchanging harsh words in between. ImClone insisted it had another suitor in the wings with a much better offer.

Now the news is out. Pharma giant Eli Lilly will bid $6.1 billion, at $70 a share, according to a report in the Wall Street Journal. Insiders say Pfizer was also among BMS's competition, although the details of its bid have not be revealed. Lilly has just before midnight tonight to make a decision.

ImClone hasn't confirmed anything. The company released a statement saying a "large Pharma company has completed due diligence and made a proposal" but that "the company has requested that ImClone not divulge its name until negotiations are completed."

Eli Lilly has been vocal about its desire to beef up its biotech pipelines. In a recent speech, Lilly chairman and CEO John Lechleiter (photo) reiterated the company's focus on biologics, saying that biotech drugs would be Lilly's preferred choice from now on.

- see ImClone's release
- check out the WSJ Health Blog article

ImClone says mystery bidder will be revealed

John Carroll — Mon, 29 Sep 2008 11:49:19 -0400

ImClone says that it expects a mystery bidder to either reject a takeover move or formally offer $6.1 billion for the biotech company. And ImClone says it will name the bidder one way or the other. In a dig at Bristol-Myers, ImClone says that a competing offer won't be contingent on financing. This is the second time that ImClone has pushed back the deadline on the mystery suitor.

ImClone Chairman Carl Icahn has been heaping scorn on Bristol-Myers Squibb's latest $5.4 billion offer, a $62-per-share bid. But many observers have noted that BMS is still a likely winner in any contest for ImClone, as it already owns 17 percent of ImClone's stock along with U.S. marketing rights to Erbitux.

- check out the Imclone release
- read the report from the Wall Street

King responds to Alpharma's rejection

Calisha Myers — Fri, 26 Sep 2008 15:19:34 -0400

After issuing its second bid, King warned Alpharma that it wouldn't take "no" for an answer. But earlier today Alpharma issued a statement rejecting King's bid of $37 a share, saying it had other parties in the wings interested in purchasing Alpharma. King responded with its own statement:

"Our $37 per share cash tender offer, which is not conditioned on financing, is the only outstanding offer for Alpharma and would provide its shareholders with a 67 percent premium over Alpharma's closing price on August 4, 2008, the date of our initial written offer," King said. "Given the uncertainty in the financial markets, we believe it is in the best interests of Alpharma stockholders to consummate our transaction as quickly as possible. Our management team and financial and legal advisors are available to meet with Alpharma immediately."

- read King's release

Alpharma rejects King's bid--again

Maureen Martino — Fri, 26 Sep 2008 09:55:31 -0400

King Pharmaceuticals can join the ranks of scorned suitors. Alpharma announced today that it has rejected the company's increased bid of $1.6 billion, or $37 per share, saying that it was "financially inadequate and not in the best interests of shareholders." King's originally bid $1.4 billion but Alpharma immediately declined the offer.

Once again, Alpharma urged shareholders not to act while the board explores other options. Those options include the possible sale of the company to King or to another party for a price in excess of $37.00 per share. Taking a page out of Carl Icahn's playbook, CEO Dean Mitchell said that other (unnamed) companies are considering bidding for the company, and that one potential suitor has already made a offer over $37 per share. "[W]e have received expressions of interest from multiple parties who contacted us following King's public disclosure of its proposal or who our financial advisors solicited at our request," Mitchell said in a statement. "We have entered into confidentiality agreements with a number of these parties who have now begun their due diligence review, and have already received a written preliminary indication of interest for a business combination from a party that includes a per share price in excess of the King offer of $37 per share."

When King made it's second bid, the company warned that any further resistance from Alpharma would be met with a proxy battle for control of the company's board. Looks like we have yet another buyout fight to watch.

- see Alpharma's release

Ligand inks $70M deal for Pharmacopeia

John Carroll — Thu, 25 Sep 2008 11:36:31 -0400

San Diego-based Ligand Pharmaceuticals says it will pay $70 million to acquire Pharmacopeia. The acquisition is a stock-for-stock deal. In addition, Pharmacopeia stockholders will be entitled to a Contingent Value Right that entitles holders under certain circumstances to a cash payment of an aggregate of $15 million.

In the deal, Ligand will issue about 17.5 million shares, 0.58 shares for each outstanding share of Pharmacopeia. The deal provides Pharmacopeia shareholders with a 52 percent premium. Current Ligand shareholders will own 84 percent of the combined company.

"We are very excited about combining Pharmacopeia with Ligand," said John L. Higgins, the CEO of Ligand. "...This is a unique opportunity for Ligand and Pharmacopeia shareholders. Both companies have similar growth strategies, and our respective drug discovery platforms are a great marriage of biology and chemistry resources. The acquisition of Pharmacopeia will complement and accelerate our product development programs, strengthen our research capability and increase our potential royalty streams."

- read Ligand's release
- check out the AP report

Cash-rich Nuvelo inks merger deal with ARCA

John Carroll — Thu, 25 Sep 2008 11:35:24 -0400

ARCA biopharma and cash-rich Nuvelo are merging in a deal that is designed to create a late-stage cardiovascular company. After the deal is complete, ARCA shareholders will own 67 percent of the common stock in the combined operation and the cash on hand should fund operations through 2009. Richard Brewer, the CEO of ARCA, will retain that title for the merged operation.

Analysts were quick to note that Nuvelo's chief attraction is the amount of cash that it has on hand. At the end of June the biotech reported $76 million of cash and negotiables on hand. But its blood-clot drug alfimeprase failed earlier this year. That left Nuvelo looking attractive primarily for its balance sheet, rather than its drug prospects.

"We believe this combination brings both immediate and longer-term value to our stockholders," said Dr. Ted W. Love, chairman and chief executive of Nuvelo. "After thorough review of numerous options, we chose to merge with ARCA because it enables us to transform ourselves into a late-stage company with multiple significant milestones and a near-term commercialization opportunity, backed by a promising cardiovascular pipeline."

- take a look at Nuvelo's release
- check out the report from the San Jose Business Journal

Icahn to BMS: Your $62 hostile bid is 'absurd'

John Carroll — Wed, 24 Sep 2008 10:12:44 -0400

The letters being exchanged between ImClone Chairman Carl Icahn and Bristol-Myers Squibb CEO Jim Cornelius are taking on a sharp edge. Razor sharp. Icahn's letter in response to BMS' hostile $62-per-share bid labels the offer "absurd." He also says that Cornelius has been, ahem, misleading.

And then he gets nasty.

"If you wish to make your attorneys wealthier, I can show you more productive ways to do so," writes Icahn. "Or, if you simply want publicity, I can also help you in that regard without your having to make unnecessary expenditures."

Maybe next time Icahn sits down to add to the correspondence he will become more insulting--perhaps offering to let the chairman of the mystery "large pharma" company that he says has offered $70 a share beat up BMS's chairman. In the meantime, it appears that BMS and ImClone are still far apart on any possible acquisition.

- read the ImClone release and letter
- read the report in the Wall Street Journal