Genzyme Shareholder Files Suit to Block Sanofi Deal: Biotech's Latest Mishaps

by: The Burrill Report

A Genzyme (GENZ) shareholder has filed suit to prevent the company from entering into an acquisition agreement with Sanofi-Aventis (NYSE:SNY), The Boston Globe reported. Sanofi reportedly offered $69 a share or $18.4 billion to buy the Cambridge, Massachusetts-based biotech, although neither company has publicly commented on any offer or ongoing negotiations. The suit, filed in Superior Court in Woburn, Massachusetts, charges that selling the company to Sanofi at the price being discussed would be a breach of the Genzyme’s board fiduciary responsibility because it would represent a discount to its true value. The suit seeks class-action status.

Eli Lilly (NYSE:LLY) said it will halt development of its experimental drug to treat Alzheimer’s semagacestat because preliminary results from two ongoing long-term phase 3 studies showed it failed to slow disease progression and was associated with worsening of cognition and the ability to perform activities of daily living. The company said its decision does not affect the ongoing clinical trials of solanezumab, Lilly's other compound in phase 3 trials as a potential Alzheimer's treatment. While both drugs focus on amyloid-beta proteins, which are believed to play a critical role in Alzheimer's disease, they have different mechanisms of action. Lilly also has two other compounds in earlier stages of clinical development; those studies are not affected by the announcement.

The U.S. Food and Drug Administration proposed to withdraw approval of the drug midodrine hydrochloride, used to treat orthostatic hypotension, a condition in which patients are unable to maintain blood pressure standing, because required post-approval studies that verify the clinical benefit of the drug have not been performed. The drug, marketed as ProAmatine by Shire (SHPGY) Development and as a generic by others, was approved in 1996 under the FDA's accelerated approval regulations for drugs that treat serious or life-threatening diseases. That approval required that the manufacturer verify clinical benefit to patients through post-approval studies. To date, neither the original manufacturer nor any generic manufacturer has demonstrated the drug's clinical benefit. Patients who currently take this medication should not stop taking it and should consult their healthcare professional about other treatment options, the agency said.

Bayer (OTCPK:BAYRY) agreed to pay at least $60 million to settle about 150 lawsuits over Trasylol, its drug to minimize bleeding during open heart surgery, according to Bloomberg. The report was attributed to people familiar with the agreement Bayer announced in court earlier this month. Bloomberg said the agreement provides an average payout of about $400,000 per patient. The German drugmaker removed Trasylol from the market in 2007 after studies showed that users of the drug faced a 50 percent greater risk of death than those using competing drugs.

SkyePharma said that Abbott Laboratories (NYSE:ABT) ended its agreement to market the experimental asthma drug Flutiform in the United States because of difficulties the company faces winning regulatory approval for the drug. In January, the company received a complete response letter from the U.S. Food and Drug Administration over additional steps the company would need to take to get the drug approved. SkyePharma said it is continuing to explore whether there is a viable way forward in the United States. If there is a way forward, it said it would seek a new U.S. licensee with strategic interest in the product who would finance any additional clinical work required. The drug is still under review by regulators in Europe and will begin late-stage clinical trials in Japan in March.