December 10, 2012
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Welcome to your Monday Biotech Deal Review for December 10, 2012. This week saw significant activity in the commercial and licensing agreements arena, as well as a couple M&Eh transactions. Of particular note is Valeant’s commercial resolution of their ongoing issues with Gladerma SA stemming from Valeant’s recent purchase of Medicis. On the M&A side of things, Biosign has purchased their exclusive distributor Bioanalytics Inc. hot on the heels of closing their recent private placement, which closed the previous week. See the rest of a relatively busy past week’s major biotech deals by clicking through!
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October 21, 2010
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Two 9-figure announcements this week mark a turning point for the biosimilars market, and one highlights the increasingly important role India plays in innovation.
- Pfizer linked up with India’s Biocon in a deal that will see Biocon take the lead in development of four biosimilar insulin products that gives Biocon $200 million up front. Coverage of the deal in the Business Standard highlights the country’s overall strength in biosimilars, which fall midway between new molecule development and small molecule generics in terms of the R&D and manufacturing sophistication required. Biocon cites the deal as proof that India can move up the value chain, doing for biosimilars what it did for generics. This is especially true if they continue to attract backing and partnerships from the Pfizers of the world.
- Novartis’ generics unit, Sandoz, reported Q3 revenues of $292 million from a single biosimilar product — enoxaparin, a copy of Sanofi-Aventis’ anticoagulant Lovenox — which is not expected to hit blockbuster status in its own right. As we have noted before, the high level of expertise required to make biosimilars creates a high barrier to entry and contributes to the field’s attractiveness to traditional pharmas (e.g., Pfizer, above) as well as to the major generics players. FierceBiotech notes further growth is expected as the first biosimilar antibodies hit the market in 2014-2015.
The Economist picked up the relevant trends in an article today entitled “Attack of the Biosimilars“:
1) “Innovator” pharmas are moving into the biosimilars business, reversing their recent role as the predominant plaintiffs in IP litigation:
“…it is ironic that the next great opportunity for traditional drugs firms is to do to the biotechnology interlopers exactly what the generics firms have done to them: shred their profit margins with cheaper copies…”
2) India in moving up the innovation value chain, increasing that country’s incentive to protect IP more forcefully:
“And as if to remind the world that new ideas don’t all come from America, it is the Indian firm that will design and manufacture the original drugs; Pfizer will only market them.”
Bottom line: biosimilars are at least as big a business as predicted. This success is another challenge to the concept that pharma’s patent cliff challenge will be met by more in-licensing from small biotechs or by increased R&D spending. Revenue is revenue, and biosimilars are poised to generate lots more of it.
May 25, 2010
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I often hear how the upcoming loss of patent protection for current blockbusters creates an insatiable demand at pharma companies for new pipeline products from biotechs. Here’s an example from 2007. Here’s one from last week. This is not true. Upcoming loss of patent protection creates a insatiable demand for revenue, but new products are not the only source of new revenue.
Abbott’s $3.7 billion deal for a unit of India’s Piramal Healthcare last week is a perfect case in point. This deal, which follows Abbott’s license of a slew of products from Zydus Cadila, will feed the company’s new “established products division.” Abbott’s purchase of Solvay in February also built its emerging markets revenue, which now accounts for over 20% of the company’s business.
Abbott is far from alone: Sanofi is the biggest generics manufacturer in Latin America, Pfizer also has an established products division, Novartis is diversifying into eyecare and has long sold generics, Merck is into follow-on biologics and GSK tapped South Africa’s Aspen Pharma for emerging markets growth through branded generics. These alternatives look even better as payors worldwide are setting more demanding standards for reimbursement, the placebo effect is mysteriously strong, and personalized medicine makes clinical trials even more expensive.
My bottom line? Emerging markets and generics opportunities create plenty of growth, thank you very much, with a far lower risk profile than most product in-licenses or biotech acquisitions (even the option deals). As big pharma gets more comfortable with “established products” and biosimilars, biotechs are going to have to demonstrate even higher value. Plenty of companies are being built and funded with that in mind; but anyone counting on pharma’s desperation will be disappointed.
January 4, 2010
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Welcome back, and happy 2010! If you’ve been away for a couple of weeks, check out the winners and losers from our 2009 Trends, and the year’s top posts.
If you’re just here for the deals, don’t fret, we have those too: a busy bunch of closings ended 2009, with almost $12 million flowing into the coffers of Canadian biotech companies from December investors over the past two weeks. But don’t expect a quiet January in the Biotech Deal Review — Med BioGene has filed for its U.S. IPO, Agrium continues its push for CF Industries and Prism has engaged a Special Committee. Details of those and all the other goodies you missed while you were voting in IVB’s year-end round up after the jump…
November 12, 2009
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India and China both ranked in the third quintile of countries in the 2009 IPRI Report, with India ranking 46/115 and China ranking 68/115 for protection of IP rights. In an earlier post, we predicted that this ranking would change rapidly, with both countries strengthening their IP regimes as their domestic R&D capacity ramped up.
Both countries have continued to win R&D collaborations and make investments in research, most recently including an Indian R&D park project by Alexandria (a U.S. developer) and Novartis’ $1 billion investment in R&D in China.
However, China and India may not be moving at the same pace. Novartis is facing its final appeal of lower court rulings in India denying it patent protection for Gleevec, and CEO Daniel Vasella calls the pending decision “the turning point” for Indian R&D in a recent article in The Economic Times (picked up by FierceBiotech). He also reportedly says the decision to invest in R&D in China is “not driven by its bad experience with Gleevec in India.”
Vasella has a dog in the fight, of course, but that’s the point. The correlation between R&D spending and IP enforcement couldn’t be clearer.
October 26, 2009
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A very busy deal week coincided with a very busy work week (for those of us with day jobs), so allow me a particularly grateful thank-you to Jacob Cawker, who’s been an invaluable help with the Deal Review this and the last several weeks. After the jump, licenses both inbound, outbound and just tied up (optioned); securities extended and accelerated (plus an actual common share offering, with the word “units” banished for one special week); and last but not least, a good volume of Canadian M&A (M&Eh?) from private to public to “just browsing.” Read more of this post
February 25, 2009
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The question this week: a shot in the arm or a kick in the teeth?
A shot in the arm for:
- Fewer shots in the arm! (har)
- British Columbia is the first jurisdiction in North America to offer a children’s vaccine called Infanrix-hexa™, which contains six immunizations in one, resulting in three fewer needles in the overall B.C. infant vaccine schedule, and
- With the discovery of a constant region of flu virus protein hemagglutinin, a universal flu vaccine may be possible (no more yearly shots);
- The Naval Surface Warfare Center in White Oak, a suburb of Washington, where the FDA is spending $1.15 billion to consolidate its offices and labs and to anchor a new biotech hub;
- Pine Island, near Rochester, Minnesota, which could soon be the home to a new biotech research, development and manufacturing park with the help of up to $900 million in funding reportedly pledged by Steve Burrill. Funding announcements also from Maryland and Pittsburgh;
- Sustainable agriculture, when the White House announced its nominee for second-in-command at USDA: Kathleen Merrigan of Tufts University, who had been a top choice of the Cornucopia Institute to run USDA’s National Organic Program;
- The National Science Foundation, from the stimulus (a $3 billion boost) and the budget (a 6.7% increase, to $6.49 billion);
- Multiple Sclerosis, with Merck, Novartis, Teva, Biogen Idec and Sanofi Aventis all planning to release new oral therapeutics between now and 2012;
- Conflict of interest disclosure, with a new editorial in PLoS Medicine;
- Deterrence, with the arrest of four animal-rights extremists;
- Organ failure biomarkers,
- with the discovery of liver toxicity-associated MicroRNAs, and
- with the injection by Pfizer Canada of $1 million to the PROOF Centre to fund research into vital organ failure biomarkers; and
A kick in the teeth for:
February 21, 2009
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Here’s the latest collection of M&A news we’ve found since the last update. No new mega-deals, although Sanofi is shopping in the €15 billion range and Roche sold $16 billion of debt (which has seen high demand in subsequent trading) in the largest offering ever to raise cash for its Genentech bid. Also, CV Therapeutics‘ (Nasdaq: CVTX) Board rejected Astellas’ $16 per share bid on the same day CV Therapeutics released its year-end results.
more deal info after the jump…