The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: vernakalant

2010 Canadian Healthcare Review: Success and Momentum Building

We had just finished the Q3 2010 report when I attended BioContact Québec in early October and the mood was discouraging. My co-author on these reports (James Smith, VP-Healthcare at Equicom) was in San Francisco in January for the annual JP Morgan conference and he described the overall mood as optimistic. What happened in those three months?

The subtitle for the 2010 Canadian Healthcare Review (pdf) is “Successes and Momentum Building.” The momentum building comes partially from the increased financing which occurred in Q4, and which appears to be continuing in 2011 – Bioniche’s Australian tranche and Paladin Labs’ bought deal.

The momentum also comes from the clinical and regulatory successes in 2010. Three novel products developed by Canadian companies were approved – Cardiome’s IV BRINAVESS (vernakalant), Theratechnologies’ EGRIFTA (tesamorelin), and one which we tend to forget because it was acquired by Medtronic in 2008 is CryoCath’s Arctic Front cryoablation system. Cipher and Labopharm also had specialty pharma products approved and many companies were successfully progressing products through Phase 2 and 3 clinical trials.

These successes are usually dwarfed by the failures but this was not the case in 2010. There were only two Phase 2 or 3 products for which development was terminated. There were three other products which had Phase 2 hiccups but for which product development is continuing. On balance, 2010 was a successful year for product development and regulatory approvals.

In any discussion of successes, we cannot forget the investors, who measure success by increases in share price. From a group of 105 companies we assessed, there were 17 companies with share price increases of 40% or more in 2010 (actually 18 as Nightingale Health Care should be added to the list). This is balanced by 32 companies which had share price decreases of 40% or more.

Success for the industry in 2011 will be defined by its clinical, regulatory and financing successes, and by share price performance of the companies. Some of the companies which made progress in 2010 with their Phase 2 and 3 clinical trials and regulatory filings will have data or decisions in 2011, while others will still be advancing their programs. If the industry is able to repeat the clinical and regulatory success rate of 2011, we expect that financing and share price performance will likely follow.

Q3 Canadian Healthcare Review – Weakness Continues BUT Some Bright Spots

Data in the Q3 2010 Canadian Healthcare Review from the Equicom Group (co-authored by James Smith, Vice President Healthcare at Equicom and myself) shows a continuation of the weakness in biotech financing which we have seen in 2009 and 2010.

Bounceback From the Financial Crisis May Have Masked 2009 Weakness

While the level of funding seen during 2009 was a concern, the problem may have been partially hidden by the many large share price increases from lows they hit as a result of the financial crisis in late 2008. The level of funding in 2010 is lower and the impact of lower funding is now being seen in share price performance. Lower cash resources have resulted in lower activity levels and survival concerns, which has probably been a factor in the 40% or greater share price drop in the first 9 months of 2010 for 31 of 105 healthcare companies in the share price performance assessment. The bright spot is that investors can still make money in the sector, as 13 companies had their share prices increase by greater than 40% in that same period.

Protox and Oncolytics Start Q4 With a Bang

The $35 million dollar financing by Protox announced in September did not count in the Q3 total because the financing was not closed by September 30. The first $10 million tranche of that financing and the recent $25 million dollar bought deal financing by Oncolytics Biotech are a good start for Q4.

Pending Regulatory News May Build Buzz

There are also some upcoming events which could help create a little momentum in the sector. While Cardiome has had a delay in a U.S. Phase 3 study of its iv vernakalant (already approved in the E.U.), the start of Phase 3 trials of the oral version by its partner Merck would be a good boost. Theratechnologies is still waiting for the FDA decision on tesamorelin after the unanimous recommendation from an advisory committee. Bioniche’s parter Endo is expected to both release results from the first Phase 3 study of Urocidin™ and also start the second Phase 3 trial.

Evolution at Valeant and Angiotech

Two large companies continue to evolve. Valeant is slowly exiting from the NCE business and going back to its specialty pharma roots as it gives back clinical programs which were acquired by the prior Biovail management. Angiotech has announced a major debt restructuring which will cut its ongoing financing costs but will also result in major dilution for current common shareholders.

More to Come on Profitable Canadian Healthcare Companies

My focus as a biotech analyst over the years has been the development stage companies. The Canadian healthcare sector also includes numerous companies which are not only profitable but also do monthly distributions to shareholders. I will take a look at these companies in a future post.

Monday Biotech Deal Review: February 22, 2010

There was a lot of follow-up among Canadian biotech deals this week: letters of intent turning into definitive agreements, merged companies turning to consolidation, bids launched on schedule and wrapped up; as well as an average crop of new M&Eh and securities.  Start things off with an interesting (cross-border!) twist to the SIFT/SR&ED deals we’ve seen after the jump…

Cardiome Licenses Vernakalant (Oral) to Merck

Merck & Co., Inc. and Cardiome Pharma Corp. announced a collaboration and license agreement that provides Merck with exclusive global rights to the oral formulation of vernakalant for the maintenance of normal heart rhythm in patients with atrial fibrillation.

Here’s the deal:

  • US$60 million upfront
  • up to US$200 million in development and approval milestones
  • up to US$100 million for approval and subsequent indication milestones
  • tiered royalty payments
  • and up to US$340 million in sales threshold milestone payments
  • Cardiome retains a U.S. co-promotion right
  • Merck will be responsible for all future costs associated with the development, manufacturing and commercialization
  • Merck has granted Cardiome a secured, interest-bearing credit facility of up to US$100 million that Cardiome may access in tranches over several years commencing in 2010.

Cardiome and Astellas Pharma U.S., Inc. have a deal for vernakalant (IV) in the United States, Canada and Mexico; and this deal provides a Merck affiliate, Merck Sharp & Dohme (Switzerland) GmbH, with exclusive rights to the IV formulation outside of the United States, Canada and Mexico.

Effectiveness is subject to the HSR clearance, as well as other customary closing conditions.

Bookmark and Share

Follow

Get every new post delivered to your Inbox.

Join 129 other followers