There were few bright spots in life sciences financing and deal making during the first week of June. The week started with a lackluster IPO, and ended with the capital markets sliding 3 percent on weak jobs data and news that another European country, Hungary this time, was overburdened by debt. Companies shied away from raising money in the public markets, with few completed PIPEs and no follow-on offerings.
In between, global healthcare products company Covidien (COV) expanded its presence in the vascular market with the acquisition of medical device company ev3 for $2.6 billion, and two subsidiaries of Johnson & Johnson (NYSE:JNJ) struck deals to beef up their early stage pulmonary pipelines.
Covidien agreed to pay $22.5 per share in cash for Minnesota-based ev3 to accelerate its strategy of building its vascular platform to become a leading endovascular player, with strong positions in both the peripheral vascular and neurovascular markets. The transaction is expected to close at the end of July.
Covidien is incorporated in Ireland but has a presence in more than 60 countries, and its products are sold in over 140 countries.
Johnson & Johnson has taken an interest in the respiratory space, not a traditional focus of the company, with two separate deals. Ortho-McNeil-Janssen Pharmaceuticals and Janssen Pharmaceutica (collectively OMJ) entered a research and development alliance and license agreement with Swedish biotech Orexo for two of its ongoing programs focused on small-molecule treatments for asthma, chronic obstructive pulmonary disease, and other inflammatory diseases. OMJ will also add a third internal program against an undisclosed target to the alliance. The alliance leverages Orexo's expertise in the arachidonic acid field and its two advanced pre-clinical programs aimed at developing powerful new drugs in the fight against serious respiratory illnesses.
Initially, the agreement will run for three years, with an option for OMJ to extend the alliance and funding. Orexo will receive an upfront payment of $10 million and research funding of up to $11.5 million over the three years. Orexo will be entitled to development milestones of up to $564 million upon the successful development and commercialization of all three initial alliance programs for multiple indications, plus additional sales milestones and royalties on commercialized products. OMJ will assume responsibility for development and commercialization of all programs and Orexo will have an option for rights to co-promote drugs from the programs in Nordic and Baltic countries.
In the second deal, J&J subsidiary Centocor Ortho Biotech acquired RespiVert, a private U.K.-based drug discovery company focused on developing small-molecule, inhaled therapies to treat pulmonary diseases. The company's lead compounds, RV-568 and RV-1088, are narrow spectrum kinase inhibitors with a unique profile of anti-inflammatory activities that are progressing into clinical development as potential first-in-class treatments for moderate to severe asthma, chronic obstructive pulmonary disease and cystic fibrosis. The clinical development of RV-568 and RV-1088 will be led by RespiVert in collaboration with scientists at Centocor Research and Development. Financial terms were not disclosed.
Sanofi-Aventis (NYSE:SNY) continued its dealmaking fervor with a targeted oncology partnership with Pennsylvania biotech Ascenta Therapeutics. Under the terms of their agreement, Ascenta Therapeutics gave Sanofi an exclusive worldwide license to develop, manufacture, and commercialize all compounds issued from its program covering several early-stage small molecules with the potential to restore tumor cell apoptosis, or programmed cell death. In return, Ascenta will receive an undisclosed upfront payment, as well as development, regulatory and commercial milestone payments that could reach a total of $398 million. Ascenta will also be eligible to receive tiered royalties on worldwide product sales.
Ascenta Therapeutics had previously in-licensed two of the agents in its program from the University of Michigan, both of which should soon enter preclinical development. Ascenta and Sanofi will continue to fund research on these targets at the University of Michigan, and Ascenta Therapeutics may participate in ongoing research activities and potential future clinical development.
GenMark Diagnostics (NASDAQ:GNMK) completed its initial public offering, raising $27.6 million, a bit less than the $46 million it had intended to raise when it filed in March. The company, which has an approved test for warfarin sensitivity, priced its offering at $6 for 4.6 million shares, with a 30-day option to purchase an additional 690,000 shares. Share price dropped almost 10 percent immediately when trading began and by the end of the week, had dropped 16 percent.
GenMark was founded in February as a way for U.K.-based Osmetech to relocate to the United States and transfer its listing from London’s AIM to the Nasdaq under the symbol GNMK. At the close of the offering, GenMark acquired Osmetech, with Osmetech shareholders receiving one share of GenMark for every 230 shares of Osmetech.
While public investors kept their dollars in their pockets, venture capitalists extended funds to innovative life sciences companies. Watertown, Massachusetts-based Tetraphase Pharmaceuticals closed a $45 million series C financing led by Excel Venture Management with participation from existing investors CMEA Ventures, Fidelity Biosciences, Flagship Ventures, Mediphase Venture Partners and Skyline Ventures.
Tetraphase utilizes a synthetic chemistry platform that can design and generate novel tetracyclines to discover and develop next-generation antibiotics. Proceeds from the financing will be used to advance its pipeline of novel antibiotics into phase 1 and phase 2 clinical studies.
Cambridge, Massachusetts-based Constellation Pharmaceuticals raised $22 million in a series B financing round led by SR One with participation from existing investors Third Rock Ventures, The Column Group, Venrock, and Altitude Life Science Ventures.
Constellation focuses on discovering and developing new drugs targeting epigenetic regulation of the human genome. Proceeds from the financing will be used to advance the development of its pipeline towards the clinic and to continue applying its innovative epigenetics product engine to probe multiple classes of novel drug targets involved in chromatin regulation and disease.
Finally, Life Technologies is investing $100 million in synthetic biology. Last week the company took a 70 percent stake in German synthetic gene company Geneart for $47 million. This week Life announced that it had made an equity investment in Synthetic Genomics, J. Craig Venter’s company. The terms of the investment were not disclosed. Researchers at Synthetic Genomics were part of the team that created the first self-replicating bacterial cell controlled by a synthetic genome.
DEALS FOR THE WEEK ENDING JUNE 4, 2010
DEALS FOR THE WEEK ENDING JUNE 4, 2010
Global Venture Financings
|Company||Location||Amount Raised ($M)||
|Tetraphase Pharmaceuticals||Watertown, MA||$45.00||Antibiotics|
|QR Pharma||Radnor, PA||$2.40||Alzheimer's|
|Constellation Pharmaceuticals||Cambridge, MA||$22.00||Epigenetics|
|Synthetic Genomics||Carlsbad, CA||n/a||Synthetic Biology|
|Ablexis||San Francisco, CA||$12.00||Antibody platform|
|SynapDx||Waltham, MA||$9.00||Autism diagnostics|
|Altura Medical||San Clemente, CA||$20.00||Medical Devices|
|Zeltiq||Pleasanton, CA||$25.00||Medical devices|
|Bioformix||Blue Ash, OH||$1.05||Industrial/Ag|
|Anulex Technologies||Minnetonka, MN||n/a||Medical devices|
|MoMelan Technologies||Cambridge, MA||$1.10||Medical devices|
|EarlySense||Ramat Gan, Israel||$13.00||Healthcare IT|
|Bio-Oils||Palos de la Frontera, Spain||$8.52||Industrial/Ag|
|Green Biologics||Oxford, UK||$7.16||Industrial/Ag|
|Action Pharma||Holte, Denmark||$6.10||Cardiorenal|
|NanoPowers||Lausanne, Switzerland||$4.50||Medical devices|
|Curetis AG||Hotzgerlingen, Germany||$1.83||Diagnostics|
|MediSapiens||Helsinki, Finland||$1.00||Genomics software|
|Ocutec||Bellshill, United Kingdom||$0.73||Medical Devices|
|TOTAL RAISED US||$145.05|
|TOTAL RAISED NON-US||$42.84|
|Senexis (United Kingdom)||Wellcome Trust's Seedling Drug Discovery Initiative||$4.20||Alzheimer's disease therapeutics|
|Q Therapeutics||Maryland Stem Cell Research Fund||$1.00||Gene/cell therapy|
|YM Biosciences (Canada)||TSX:YM||$3.20||PIPE|
|Exelixis||EXEL||$160.00||Debt--2 separate deals|
|Mucosis (the Netherlands)||Private||$3.66||Credit line from Dutch government|
|Columbia Laboratories||CBRX||$15.00||Term loan from Watson Pharma|
|Ambrilia Biopharma (Canada)||TSX:AMB||$2.00||Non-dilutive financing|
|EnWave (Canada)||TSX-V:ENW||$3.20||Warrant exercise|
|PuraMed Bioscience||OTC:PMBS||$5.00||Share purchase agreement|
|TOTAL PUBLIC FINANCINGS-US||$251.32|
|Deal Value |
|Covidien (Ireland)||ev3||$2,600.00||Vascular devices|
|PH Invest (Luxembourg)||Covidien sleep therapy (Ireland)||n/a||Sleep therapy products|
|Triad Isotopes||Covidien Radiopharmacies (Ireland)||n/a||Radiotherapeutics|
|Harbin Tian Qing Biotech (China)||Pfizer's China swine flu vaccines||$50.00||Infectious|
|Centocor Ortho Biotech(J&J)||RespiVert (United Kingdom)||n/a||Respiratory|
|Novella Clinical||Prologue Research International||n/a||CRO|
|Marlin Equity Partners||Datafarm||n/a||Technology solutions|
|Bausch & Lomb||Sirion Therapeutics||n/a||Ophthalmic|
|Investor Group led by Edgewater Capital Partners||Particle Dynamics (KV Pharmaceuticals)||$30.00||Pharmaceutical ingredients|
|Elekta (Sweden)||Resonant Medical (Canada)||$30.00||Cancer imaging therapies|
|Huiheng Medical (China)||Portola Medical||n/a||Medical devices|
|Company/Licensee||Company/Licenser||Deal Value |
|Leukemia & Lymphoma Society||Onconova Therapetuics||$10.00||Cancer partnership|
|TapImmune||Mayo Clinic||n/a||Cancer vaccine license|
|Pfizer||Epocrates||n/a||Digital health partnership|
|Dow AgroSciences||Monsanto||n/a||Crop traits license|
|Biovail (Canada)||Kyowa Hakko Kirin (Japan)||$65.00||Parkinson's disease license|
|Dell Computers||Practice Fusion||n/a||Electronic health records partnership|
|Ortho-McNeil-Janssen Pharmaceuticals (J&J)||Orexo (Sweden)||$585.50||Pulmonary drug license and R&D collaboration|
|Oramed Pharmaceuticals (Israel)||Laser Detect Systems (Israel)||$1.20||Drug delivery joint venture|
|Royal Philips Electronics (the Netherlands)||RXi Pharmaceuticals||n/a||Drug delivery partnership|
|Sanofi-Aventis (France)||Ascenta Therapeutics||$398.00||Targeted oncology license and collaboration|
|Feihe Dairy (China)||Martek Biosciences||n/a||Nutraceuticals supply agreement|
|Arysta LifeScience (Japan)||Plant Impact (United Kingdom)||n/a||Crop nutrition products distribution agreement|
|Aoxing Pharmaceutical (China)||Phoenix PharmaLab||n/a||Pain therapeutics alliance|
|GE Healthcare's Imanet||VirtualScopics||n/a||Diagnostics partnership|