By Marie Daghlian
Life sciences companies saw $3.4 billion in disclosed M&A transactions and $1.1 billion in disclosed partnering deals during the third week of August. Aspen Pharmacare’s (OTC:APNHF) acquisition of the drugmaking assets of Sigma Pharmaceuticals for $806 million in cash will allow the troubled Australian pharmaceutical to clear its outstanding debt and focus on its pharmacy wholesale and retail division. The acquisition will make Aspen, Africa’s largest drugmaker, the largest prescription pharmaceuticals manufacturer in Australia. Aspen will acquire Herron and Orphan drug lines and manufacturing operations, as well as its generic and over-the-counter drug portfolios.
Two privately held contract research organizations were among the larger acquisition targets. Pharmacy benefits manager Medco Health Solutions agreed to buy United BioSource for $730 million in cash. United BioSource tests drugs and devices for safety and effectiveness after regulatory approval and has global resources.
The UBS acquisition follows Medco’s recent announcement that it plans to offer pharmacogenetic testing services to its clients to test the effectiveness of drugs. Medco says the combination will extend Medco’s core capabilities in data analytics and research to further accelerate pharmaceutical knowledge, advancing patient safety and furthering evidence-based medicine. In February, Medco acquired San Francisco-based genetic testing firm DNA Direct.
The transaction, which will be funded through Medco's free cash and existing debt facilities, is subject to customary regulatory approvals and is expected to close in the third quarter of 2010. The new business is expected to be slightly accretive to Medco shareholders in 2011, excluding one-time items and amortization.
The agreement is expected to be slightly accretive to Medco earnings in 2011, excluding one-time items and amortization. United BioSource, based in Bethesda, Maryland, will have revenue of $280 million in 2010 and a growth rate of more than 20 percent, according to a Medco statement. Medco’s shares fell 2.4 percent on the announcement and are down 28 percent since the beginning of the year.
Avista Capital Partners, a private equity firm, and Ontario Teachers' Pension Plan, through its private investor department, Teachers' Private Capital, are going to pay $600 million to acquire INC Research, a global CRO that employs 2,000 people in 40 countries. Unlike United BioSource, which tests drugs and devices after they are approved, INC Research provides pharmaceutical and biotechnology companies with expertise in managing their late stage clinical development programs.
Genomics companies, all competing for low-cost DNA sequencing systems, generated a lot of buzz as one company was acquired, one company filed to go public, and one company that had recently filed for an IPO raised a fresh round of venture capital. Life Technologies (LIFE) agreed to acquire Connecticut-based Ion Torrent for $375 million in cash and stock. Ion Torrent’s backers are also entitled to an additional $350 million in cash and stock if they achieve certain technical and time-based milestones through 2012.
Formed by Jonathan Rothberg, founder of CuraGen, 454 Life Sciences and co-founder of Raindance Technologies, Ion Torrent’s chip-based PostLight sequencing technology enables a direct connection between chemical and digital information through the use of proven semiconductor technology. The first product using this technology will be the Personal Genome Machine, a highly-accurate bench top instrument optimal for mid-scale sequencing projects, such as targeted and microbial sequencing. The instrument is currently available through an early access program and will be launched later this year at an entry cost of less than $100,000.
Pacific Biosciences (PACB), Ion Torrent’s California competitor in the race for a cheaper sequencer, filed for a $200 million initial public offering Pacific Biosciences just completed a $109 million series F venture round, including a $50 million investment from Gen-Probe, bringing the total it has raised to date to $370 million. The company said in its filing that it will focus its technology in the near term on clinical, basic and molecular diagnostics.
Also in the news, rival Complete Genomics said it has raised $39 million in its Series E round, led by new investor Sands Capital with participation by existing investors Essex Woodlands, OVP Venture Partners, Prospect Venture Partners, OrbiMed Advisors, Highland Capital Management, and Enterprise Partners. The California-based company filed a $86.3 million initial public offering at the end of July. Unlike its competitors, Complete Genomics plans to offer sequencing services rather than selling its sequencers to researchers.
The company also said that it is evaluating a recent lawsuit filed against the firm by Illumina for alleged patent infringement, claiming that Complete Genomics' sequencing platform and services infringe three Illumina patents. “We cannot guarantee any particular outcome, as with any litigation, but we believe that we have substantial and meritorious defenses to the claims and intend to vigorously defend against this lawsuit," said Cliff Reid, CEO, president and chairman of Complete Genomics, in a statement.
Knopp Neurosciences granted Biogen Idec (BIIB) exclusive, worldwide license to its late-stage treatment for amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease, and potentially other indications. The compound, KNS-760704, is a novel oral neuroprotective therapy that has received orphan drug designation in both the United States and Europe.
Biogen will make a $60 million equity investment in Pittsburgh-based Knopp and pay the company $20 million. Biogen Idec will lead the development of KNS-760704 for ALS and its potential commercialization in global markets, with Knopp providing development support and conducting certain U.S. commercialization activities under the direction of Biogen Idec. Knopp will also be eligible for up to $265 million in additional payments based on the achievement of development, regulatory, and sales milestones; and tiered, double-digit royalties on worldwide sales.
Finally, Quark Pharmaceuticals granted Novartis an option to obtain an exclusive worldwide license to develop and commercialize its p53 temporary inhibitor siRNA drug QPI-1002, currently in mid-stage clinical development. Novartis is paying $10 million for the option. If it chooses to exercise the option, California-based Quark will be eligible for up to $670 million in additional payments plus royalties on sales of licensed products.
QPI-1002 is designed to temporarily inhibit expression of the stress-response gene, p53 and is the first synthetic siRNA to be administered systemically to humans. It is being developed for the prevention of acute kidney injury in patients undergoing major cardiovascular surgery, and for the prophylaxis of delayed graft function in patients receiving deceased donor kidney transplants.
Deals for the Week Ending August 20, 2010
|Global Venture Financings|
|Company||Location||Amount Raised (USD M))|| |
|Complete Genomics||Mountain View, CA||39.0||Sequencing|
|SI-BONE||San Jose, CA||10.6||Medical devices|
|Anchor Therapeutics||Cambridge, MA||10.0||GPCR targeted peptides|
|Jennerex||San Francisco, CA||8.6||Cancer therapeutics|
|PatientsLikeMe||Cambridge, MA||8.0||Digital Health|
|Avantra Biosciences||Woburn, MA||7.0||Biomarker analysis|
|MLC Dx||San Francisco, CA||6.0||Diagnostics|
|Shape Up The Nation||Providence, RI||5.0||Digital Health|
|nContact Surgical||Morrisville, NC||4.0||Medical devices|
|Biocept||San Diego, CA||2.3||Diagnostics|
|Cibus Global||San Diego, CA||1.2||Crop traits|
|Novalar Pharmaceuticals||San Diego, CA||1.0||Dental therapeutics|
|Chimeros||San Diego, CA||0.6||Cancer therapeutics|
|Apeptico Forschung und Entwicklung||Vienna, Austria||3.9||Pulmonary therapeutics|
|TOTAL RAISED US||103.3|
|TOTAL RAISED NON-US||16.4|
|Grants and Contracts|
|Amount Raised (USD M)|| |
|Medicago (Canada)||U.S. DARPA||21.0||VLP vaccines|
|Selecta Biosciences||NIH NIDA||3.0||Vaccines|
|Cognition Therapeutics||Alzheimer's Drug Discovery Fdn||0.2||Neurology therapeutics|
|Brain Plasticity||National Institutes of Health||3.7||Tools/Technology|
|NanoVir||National Institutes of Health||3.0||Antivirals|
|Bolder BioTechnology||NIAID Phase I SBIR||0.6||Radiation side effects|
|Rheonix||National Institutes of Health||0.2||Diagnostics|
|AlBioTech||U.S. government Contract||21.0||Tools/Technology|
|Total Grants and Contracts||52.7|
Raised (USD M)
|D. Medical (Israel)||DMED||10.5||IPO|
|New Generation Biofuels||NGBF||1.0||PIPE|
|Delcath Systems||DCTH||37.0||Follow on|
|Cynapsus Therapeutics (Canada)||TSX:CTH||0.2||Debt|
|ARYx Therapeutics||OTC:ARYX||6.3||Bridge financing loan|
|Moberg Derma (Sweden)||Private||6.8||Credit facility|
|BioTime||BTIM||9.2||Warrant discount offer|
|TOTAL PUBLIC FINANCINGS-US||215.2|
|Deal Value |
|Aspen Pharmacare (South Africa)||Sigma Pharmaceuticals (Australia)||804.0||Generics|
|Medco Health Solutions||United BioSource||730.0||Contract Research Organization|
|Life Technologies||Ion Torrent Systems||725.0||DNA sequencing|
|Avista Capital Partners Ontario Teachers' Pension Plan||INC Research||600.0||Contract Research Organization|
|BioMarin Pharmaceuticals||ZyStor Therapeutics||115.0||Enzyme replacement therapies|
|Aventine Renewable Energy||Riverland Biofuels||16.5||Biofuels facility|
|GlaxoSmithKline (United Kingdom)||Shenzhen Neptunus Interlong Biotechnique Joint Venture (China)||10.6||Vaccines|
|PACGEAR||NAI Tech Products||N/A||Medical devices|
|Aquamer Medical||Urban Agricultural||N/A||Industrial/Ag|
|Repsol (Spain)||AlgaEnergy (Spain)||N/A||Renewable fuels|
|Company/Licensee||Company/Licenser||Deal Value |
|Novartis (Switzerland)||Quark Pharmaceuticals||670.0||siRNA therapeutic license option|
|Biogen Idec||Knopp NeuroSciences||345.0||Neurology license|
|Pepsico||Senomyx||62.0||Flavor technology collaboration|
|Emergent BioSolutions||Oxford BioMedica (United Kingdom)||21.4||Technology license|
|Intuitive Surgical||Cardica||12.0||Technology license|
|Endologix||Evasc Medical Systems (Canada)||N/A||Medical device license|
|Becton, Dickinson||Alverix||N/A||Diagnostic collaboration|
|Proteonomix||The Investor Group (United Arab Emirates)||N/A||Regenerative skin cell products joint venture|
|Life Technologies||CEVEC Pharmaceuticals (Germany)||N/A||Technology license|
|GE Healthcare||Immunomedics||N/A||Technology license and collaboration|
|Regenicin||Lonza Walkersville (Lonza-Switzerland)||N/A||Tissue repair license|