Scientific and medical advances weren’t the only topic of discussion at the 51st American Society of Hematology [ASH] Annual Meeting that began over the weekend in New Orleans, LA, as merger and acquisition activity took center stage .
Early this morning, Celgene Corporation (NASDAQ:CELG) announced the acquisition of privately-held Gloucester Pharmaceuticals for $340 million in cash plus another $300 million in future U.S. and international regulatory milestone payments. Gloucester’s Istodax® (romidepsin) was approved in November 2009, by the U.S. Food and Drug Administration [FDA] for the treatment of cutaneous T-cell lymphoma [CTCL] and is being developed for other hematological malignancies, including peripheral T-cell lymphoma [PTCL].
While many potential acquirers may have been sitting on the sidelines watching the market valuations of cash-poor companies continue to decline throughout the year, those depressed share prices may not last much longer. Improving capital markets for small-cap life sciences companies, evidenced in part by this month’s $48 million follow-on financing by ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP), could accelerate merger and acquisition activity in the sector as larger companies race to fill anticipated patent expirations and gaps in their product pipelines. Indeed, a favorable climate for merger and acquisition activity was one of the main tenets of our positive perspectives for biotechnology in 2009.
Following Celgene’s acquisition of Gloucester, we revisited the baker’s dozen of public biotechnology companies announcing upcoming clinical data presentations at ASH [as of November 27, 2009] from our recent article and identified three small-cap [eg, market capitalization less than $1 billion] biotechnology companies with unpartnered, late-stage [eg, marketed or entering pivotal trials] hematological malignancy programs:
- Allos Therapeutics, Inc. (NASDAQ:ALTH): The company is commercializing Folotyn™ (pralatrexate injection), an antimetabolite approved for the treatment of patients with relapsed or refractory PTCL. While Allos has retained exclusive worldwide rights to Folotyn, which became available in the United States in October 2009, potential competition from Istodax by Celgene/Gloucester may be a concern as a supplemental NDA for PTCL is expected by year-end 2010. Further, the company was the subject of an article in the December 4, 2009, New York Times questioning its pricing for Folotyn.
- Seattle Genetics, Inc. (NASDAQ:SGEN): In February 2009, the company initiated a pivotal trial of its brentuximab vedotin product candidate in patients with relapsed or refractory Hodgkin lymphoma under a Special Protocol Assessment with the FDA. Seattle Genetics expects to submit both a New Drug Application [NDA] with the FDA under the accelerated approval regulations and a Marketing Authorization Application with the European Medicines Agency for conditional marketing authorization in the first half of 2011. The company has retained exclusive worldwide rights to brentuximab vedotin.
- Cyclacel Pharmaceuticals, Inc.: At the ASH meeting, Cyclacel reported promising 1-year survival data from a Phase 2 randomized trial of its oral sapacitabine capsules in elderly patients with acute myeloid leukemia [AML] and separately interim response data in myelodysplastic syndromes [MDS]. The company is planning to start a pivotal trial with sapacitabine in 2010 and has retained exclusive worldwide rights with the exception of Japan where Daiichi-Sankyo has a right of first refusal to market the drug under terms to be negotiated.
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