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By Marie Daghlian

Nutritional supplements may have passed their media heyday but they are still big business. This week private equity firm The Carlyle Group decided to beef up its portfolio by acquiring NBTY (NTY), a global nutritional supplements company that markets products under the names Nature's Bounty, Vitamin World, and Puritan's Pride, in a transaction valued at $3.8 billion. Carlyle, which has assets of more than $90.5 billion under management, will pay $55 per share in cash for all outstanding common shares of NBTY, representing a premium of approximately 57 percent over NBTY's average closing share price during the 30 trading days ended July 14, 2010. The transaction is expected to close by the end of 2010. The announcement triggered a 43 percent jump in NBTY’s shares to $53.74.

Generic and specialty pharmaceutical company Mylan (NASDAQ:MYL) announced plans to acquire Bioniche Pharma, a privately held, global injectable pharmaceutical company based in Ireland, for $550 million in cash. The deal provides Mylan with immediate entry into the North American injectables market and a platform for future growth opportunities, especially for the development of biosimilars. The transaction is expected to be accretive to Mylan's earnings in year one, without accounting for any operational or other synergies.

Bioniche Pharma combined with UDL Laboratories, Mylan's unit dose business, will form Mylan Institutional to focus on the hospital and institutional markets through which Mylan will serve group purchasing organizations, wholesalers, hospitals, surgical and radiology services, home infusion, and retail areas with a differentiated and tailored product offering.

“This acquisition satisfies one of our long-standing objectives of filling product and therapeutic gaps in our U.S. portfolio,” says Healther Bresch, Mylan president. “In addition, Bioniche Pharma will fill an extremely important prerequisite toward the viability of the commercialization of Mylan's own generic biologics platform in the near future.”

Bioniche Pharma had approximately $130 million in net revenue for the twelve months ended May 31, 2010 and approximately $43.5 million in net revenue for the three-month period ended May 31, 2010. Most of these sales were derived in the U.S. commercial marketplace from a diverse portfolio of products across several therapeutic areas for the hospital setting, including analgesics/anesthetics, orthopedics, oncology, and urology. In addition, Bioniche’s pipeline includes 15 Abbreviated New Drug Applications pending approval at the U.S. Food and Drug Administration and more than 25 additional products in various stages of development.

Under the terms of their agreement, Mylan is not assuming any of Bioniche Pharma's outstanding debt or acquiring the company's cash as part of the transaction.

Johnson & Johnson (NYSE:JNJ) will pay $480 million to acquire Micrus Endovascular (MEND), a global developer and manufacturer of minimally invasive devices to address hemorrhagic and ischemic stroke, in a cash-for-stock exchange. The transaction is expected to close in the second half of 2010 and to be breakeven to slightly dilutive to Johnson & Johnson's 2010 earnings per share.

Micrus Endovascular, which is solely focused on the neurointerventional market, will join Codman & Shurtleff, the neuro device business of the DePuy Family of Companies within Johnson & Johnson. The two divisions offer complementary technologies for treating cerebral aneurysms responsible for hemorrhagic stroke and will provide a strong suite of solutions for hemorrhagic stroke, with many promising products in development for ischemic stroke.

According to the National Stroke Association, stroke is the third most common cause of death and the leading cause of serious, long-term adult disability in the United States, costing an estimated $73 billion annually in healthcare expenses.

Venture financings continued its brisk pace, with more than $400 million of announced global investments. Disruptive technology company Pacific Biosciences led the pack of private companies closing financing rounds, completing a $109 million series F round that includes a previously announced $50 million strategic investment by Gen-Probe.

“These funds will be used to support our operations as we begin ramping production capabilities for the commercial launch of our PacBio RS system,” says Hugh Martin, chairman and CEO. The PacBio RS is the Menlo Park, California-based company’s first product, a third generation sequencing system based on its Single Molecule Real Time platform that promises real-time detection of biological events at single molecule resolution. Pacific Biosciences has raised approximately $370 million in capital to date to support development of its technology.

Reata Pharmaceuticals completed a $78 million equity financing led by existing investors CPMG and Novo A/S, bringing the total raised by the Irving, Texas-based company to $180 million since inception. The money will be used to fund the second of two pivotal trials of Reata’s lead product candidate, bardoxolone, in patients with advanced chronic kidney disease and Type 2 diabetes, which is expected to commence later this year. The primary endpoint of the ongoing first pivotal trial of bardoxolone was recently analyzed and the data are planned for presentation at a scientific meeting in November 2010.

Reata plans to build a commercial organization in the United States to launch bardoxolone. The company has partnered with Kyowa Hakko Kirin in late 2009 to jointly develop bardoxolone for Japan and certain other Asian markets, and plans to seek a partner for expanded global development and commercialization in Europe and other worldwide markets.

Medical device company TriVascular has raised $60 million in new venture funding from Pinnacle Ventures with participation from four other equity funds. The Santa Rosa, California-company will use the funds to launch its first product, a system for repairing abdominal aortic aneurysms, in Europe later this year, and for future clinical trials. According to the company, its device is an improvement over existing technology because it's easier to implant and fits a larger group of patients. TriVascular is aiming at getting its device approved in the United States in 2012.

Several companies developing solutions to bioterror threats were awarded lucrative government contracts. Emergent BioSolutions (NYSE:EBS) signed a contract valued at up to $107 million with the Office of the Biomedical Advanced Research and Development Authority of the Department of Health and Human Services, to develop and obtain regulatory approval for large-scale manufacturing of BioThrax, the only U.S. Food and Drug Administration licensed vaccine to prevent anthrax infection. The contract consists of a two-year base period of performance valued at $54.6 million and three option years that, if exercised by BARDA, will increase the contract value to up to $107 million.

Since 1998, the U.S. government has procured over 42 million doses of BioThrax and has administered more than 9.6 million doses to nearly 2.4 million military personnel.

AVI BioPharma (AVII) was awarded a new contract with the U.S. Department of Defense Chemical and Biological Defense Program through the U.S. Army Space and Missile Defense Command for the advanced development of the company's hemorrhagic fever virus therapeutic candidates, AVI-6002 and AVI-6003, for Ebola and Marburg viruses, respectively. The contract, potentially worth up to $291 million for all activities necessary to obtain FDA approval, is funded as part of the Transformational Medical Technologies program, which was pioneered to develop innovative platform-based solutions countering biological threats.

AVI will get approximately $80 million immediately to complete the first segment of the contract. After completion of the first segment, and each successive segment, TMT has the option to proceed to the next segment for either or both AVI-6002 and AVI-6003.

Under an earlier contract AVI completed development activities that culminated in the opening of Investigational New Drug applications for both AVI-6002 and AVI-6003.

Canadian biotech Tekmira Pharmaceuticals was also awarded a contract with the U.S. Department of Defense Chemical and Biological Defense Program, funded as part of the Transformational Medical Technologies program. Tekmira could earn up to $140 Million to develop an RNAi therapeutic against the Ebola virus.

In the initial phase of the contract, Tekmira is eligible to receive up to $34.7 million over the next three years to use its lipid nanoparticle technology to develop an Ebola therapeutic candidate through pre-clinical development, filing of an Investigational New Drug application with the FDA, and completion of an early stage human safety clinical trial. TMT will have the option of extending the contract which could provide for as much as $140 million in funding for the entire program.


DEALS FOR THE WEEK ENDING JULY 16, 2010

Global Venture Financings
Company Location Amount Raised (USD $M))
Principal Focus
Novita Therapeutics Lenexa, KS N/A Diagnostics
Zogenix San Diego, CA 15.0 Neurology
Accuri Cytometers Ann Arbor, MI 6.0 Tools/Technology
Ventus Medical Belmont, CA 40.0 Medical devices
BARRX Medical Sunnyvale, CA 15.0 Medical devices
Providien Phoenix, AZ 10.5 Medical devices
TriVascular Santa Rosa, CA 60.0 Medical devices
Metamark Genetics Cambridge, MA 22.0 Diagnostics
Reata Pharmaceuticals Irving, TX 78.0 Diabetes, renal treatments
Trevena King of Prussia, PA 35.0 GPCR biased ligands
Pacific Biosciences Menlo Park, CA 59.0 Gene Sequencing
Femta Pharmaceuticals San Diego, CA 2.2 Antibodies
Visterra Cambridge, MA 6.0 Infectious disease therapeutics
Innocoll Ashburn, VA 5.0 Surgical implants
XDx Brisbane, CA 6.0 Diagnostics
Kymab Cambridge, United Kingdom 25.5 Antibody therapeutics
LanzaTech Auckland, New Zealand 18.0 Industrial/Ag
merLion Pharmaceuticals Singapore 7.0 Anti-infectives
TOTAL RAISED US 359.7
TOTAL RAISED NON-US 50.5
Grants & Contracts
Company
Funding/Contracting Agency

Amount

(USD $M)


Principal Focus
Grants
Medical Nanotechnologies National Science Foundation N/A Nanotubes and cancer
Rxi Pharmaceuticals NIH NIAID SBIR 0.6 RNAi
Edge Therapeutics New Jersey Economic Development 0.1 Traumatic brain injury
MacroGenics National Istitutes of Health 9.8 Autoimmune
Orla Protein Technologies (UK) Technology Strategy Board 0.3 Stem cells
Contracts
AVI BioPharma U.S. DoD CBDP 80.0 Ebola therapeutic
Emergent BioSolutions HHS BARDA over 5 years 54.6 Anthrax Vaccine
Tekmira Pharmaceuticals (Canada) U.S. DoD CBDP 34.7 Ebola therapeutic
BioFocus (Galapagos-Belgium) National Institutes of Health 8.6 Molecular libraries
AnaptysBio DARPA 1.5 Antibodies
Alion Science and Technology USDA BRDC N/A Energy crops
Total Grants 10.8
Total Contracts 179.4
PUBLIC FINANCINGS
Company
Ticker
Amount
Raised $M

Financing Type
Carmat (France) Paris:ALCAR 20.0 IPO
Avacta Group (United Kingdom) LSE:AVCT 2.1 PIPE
Immuron (Australia) ASX:IMC 1.2 PIPE
China Kangtai Cactus Biotech (China) OTC:OTC:CKGT 1.0 PIPE
Nutrastar International (China) OTC:OTCQB:NUIN 5.7 PIPE
T-Ray Science (Canada) TSX-V:THZ 0.6 PIPE
BioMimetic Therapeutics BMTI 40.0 Follow-on
Agilent Technologies A 750.0 Debt
Zogenix Private 35.0 Term loan and credit facility
Qspex Technologies Private 4.5 Credit facility
TOTAL PUBLIC FINANCINGS-US 829.5
NON-US 30.6
M&A
Acquirer
Target
Deal Value
in $M

Focus
Carlyle Group NBTY NTY
3,800.0 Nutraceuticals
Mylan (MYL) Bioniche Pharma (Ireland) 550.0 Injectibles
Johnson & Johnson (JNJ)
Micrus Endovascular 480.0 Medical devices
Super Religare Laboratories (India) Piramal Healthcare's diagnostics unit (India) 129.0 Diagnostics
BP (United Kingdom) Verenium's cellulosic biofuels business 98.3 Renewable fuels
Evotec (NYSE:EVTC) (Germany) DeveloGen (Germany) 18.0 Metabolic
Forbes Medi-Tech (Canada) Marco Hi-Tech JV 1.4 Nutraceuticals
Masimo SEDLine N/A Medical devices
BRAIN (Germany) Enzymicals N/A Industrial biotechnology
Radient Pharmaceuticals (RPC)
Provista diagnstoics N/A Diagnostics
Alliances
Company/Licensee Company/Licenser Deal Value
in $M
Focus
Roche (OTCQX:RHHBY) (Switzerland) Qiagen (Germany) N/A Biomarker license
The Medicines Company (NASDAQ:MDCO)
OctoPlus (Netherlands) N/A Drug development agreement
Immunovaccine Merck KGaA (Germany) N/A Cancer vaccine license
Human Genome Sciences (HGSI)
Lonza (Switzerland) N/A Drug manufacturing agreement
Bayer CropScience (Germany) Syngenta (Switzerland) N/A Agbio license
Eisai Pharmaceuticals (OTCPK:ESALY) (Japan) Aestus Therapeutics N/A Neurology collaboration
AstraZeneca (NYSE:AZN) (United Kingdom) Silence Therapeutics (United Kingdom) N/A RNAi therapeutics collaboration
Biogen Idec (NASDAQ:BIIB)
Amorfix Life Sciences (Canada) N/A Neurology treatment license
Immunotope Midatech (United Kingdom) N/A Infectious, cancer joint venture
Allozyne Scripps Research Institute N/A Technology license
Watson Pharmaceuticals (WPI)
Itero Biopharmaceuticals N/A Female infertility treatment license

Source: The Burrill Report

Source: Biotech: Update on Deals, Mergers, Funding