By Marie Daghlian
Sanofi-Aventis (NYSE:SNY) reinforced its presence in China with the acquisition of BMP Sunstone for $521 million in cash, representing a 30 percent premium above the closing price of Sunstone’s shares before its board of directors unanimously approved the transaction.
The merger follows the recent formation of Hangzhou Sanofi Minsheng Consumer Healthcare joint venture and will make the pharmaceutical powerhouse a leading consumer healthcare company in China.
“The acquisition of BMP Sunstone will not only leverage our consumer healthcare business in China, but will also bring us unique access to new expanding distribution channels which are expected to account for a third of the pharmaceutical market in China in the coming years,” says Sanofi CEO Chris Viehbacher.
BMP Sunstone is a specialty pharmaceutical that manufactures pediatric and women’s health products sold in pharmacies throughout China and had sales of approximately $147 million in 2009, 60 percent of which were in the consumer health segment. The company also markets a portfolio of products under exclusive multi-year licenses in China, primarily focused on women's health and pediatrics, and provides pharmaceutical distribution services through subsidiaries in Beijing and Shanghai.
Sanofi has been moving aggressively into the consumer healthcare market as a way to diversify and grow the company as several of its biggest drugs go off patent. The company claims to be the fifth largest consumer healthcare company in the world, since its acquisition of U.S. consumer products company Chattem in 2009. China’s market for these products is second only to the United States and has grown at 11 percent per year since 2005, a trend that is expected to continue as its middle class grows and becomes more urban.
Sanofi already has a major presence in China with 5,000 people in more than 200 cities and three manufacturing facilities, and a large research and development center in Shanghai. Completion of the transaction is subject to Chinese regulatory approval and to the approval of BMP Sunstone stockholders, 23 percent of which have committed to vote in favor of the merger.
Sanofi was not the only pharmaceutical company crossing borders to do a deal. Israeli generic powerhouse Teva Pharmaceuticals (NASDAQ:TEVA) went to Germany to acquire Théramex, Merck KGaA’s (OTCPK:MKGAY) women’s health business, for $367 million. Théramex’s products are sold in 50 countries worldwide, including countries in which Teva will acquire distribution rights. Théramex has built an especially solid reputation in France and Italy as a company dedicated to women’s health and gynecology.
In addition to Teva’s upfront cash payment, Merck will be eligible to receive certain performance-based milestone payments. The transaction is expected to close towards the end of this year or in early 2011.
Jordanian pharmaceutical Hikma is expanding its global injectables portfolio and its U.S. market presence through the acquisition of Baxter’s multi-source injectables business for $112 million in cash. The deal will position Hikma as the second largest injectables supplier in the United States with a combined market share of more than 15 percent.
Biotech companies also reaped the rewards of a busy week of dealmaking. MacroGenics enriched its coffers with two drug discovery deals with big pharmaceutical companies—Boehringer Ingelheim and Pfizer (NYSE:PFE) will use its antibody platform directed at multiple targets. Rockville, Maryland-based MacroGenics expects to receive at least $60 million from Boehringer and could get up to $210 million more for the successful development of each of up to ten therapeutics developed by the collaboration.
The collaboration with Pfizer is focused on cancer. Financial terms were not disclosed. (See story)
Seattle’s Immune Design granted MedImmune exclusive worldwide rights to use its novel early stage adjuvant in vaccines for select infectious diseases. In return, Immune Design will get an upfront licensing fee and potential development, regulatory and commercial milestones of up to $212 million, in addition to royalty payments on sales of marketed products.
Amicus Therapeutics (NASDAQ:FOLD) licensed Amigal, its late stage Fabry Disease drug, to GlaxoSmithKline (NYSE:GSK) for $30 million upfront, up to $170 million in milestone payments, as well as significant royalties on global sales. GSK is also taking a 20 percent stake in the New Jersey biotech for another $31 million. As part of their agreement, the companies also intend to advance clinical studies exploring the co-administration of Amigal with enzyme replacement therapy to treat Fabry Disease.
Finally, Pacific Biosciences (NASDAQ:PACB) went public, pricing 12.5 million shares at $16 each to raise $200 million. The company is developing DNA sequencing machines that promise to sequence the genome faster, cheaper, and more accurately. (See story)
|Deals for the Week Ending October 29, 2010|
|Global Venture Financings|
|Company||Location||Amount Raised (USD M)||Principal Focus|
|aTyr Pharma||San Diego, CA||23.0||Therapeutics-protein drugs|
|ContraFect||New York, NY||14.2||Therapeutics-infectious|
|Solx||Sudbury, MA||3.7||Medical devices|
|Cappella||Galway, Ireland||14.6||Medical devices|
|Total Raised US||40.9|
|Total Raised Non-US||31.0|
|Grants and Contracts|
|Company||Funding/Contracting Agency||Amount Raised (USD M)||Principal Focus|
|Rockland Immunochemicals||NIH Phase I SBIR||N/A||Generic antibodies|
|Galapagos (Belgium)||Flemish agency for Innovation||5.1||Cystic fibrosis|
|SAIC||US DoD 3-year task order||23.0||Biometrics|
|Total Grants and Contracts||28.1|
Raised (USD M)
|Sirona Biochem (Canada)||TSX-V:SBM||1.0||PIPE|
|Ariad Pharmaceuticals||ARIA||59.2||Follow on|
|Oncolytics Biotech (Canada)||ONCY||24.0||Follow on|
|Omeros||OMER||25.0||Right to percentage of net proceeds|
|Ore Pharmaceuticals||OTC:ORXE||5.3||Debt and equity|
|Amicus Therapeutics||FOLD||31.0||GSK takes 20 percent equity stake|
|TOTAL PUBLIC FINANCINGS-US||710.8|
|Acquirer||Target||Deal Value |
|Stryker||Boston Scientific's neurovascular business||1,500.0||Medical devices|
|Sanofi-Aventis (France)||BMP Sunstone (China)||520.6||Specialty pharma|
|Teva Pharmaceuticals (Israel)||Theramex (Merck KGaA-Germany)||367.0||Women's health|
|Green Plains Renewable Energy||Global Ethanol||169.0||Renewable fuels|
|Hikma Pharmaceuticals (Jordan)||Baxter's Injectables business||112.0||Generic injectables|
|Kadmon Pharmaceuticals||Three Rivers Pharmaceuticals||100.0||Specialty pharma|
|Colorplast (Denmark)||Mpathy Medical||35.0||Female pelvic health|
|Leadtec Systems Australia||Mimotopes (Commonwealth Biotechnologies)||1.1||Tools/Technology|
|Company/Licensee||Company/Licenser||Deal Value |
|Boehringer Ingelheim (Germany)||MacroGenics||2,160.0||Antibody Therapeutics Alliance|
|MedImmune (AstraZeneca-UK)||Immune Design||212.0||Vaccine Adjuvant License and Collaboration|
|GlaxoSmithKline (NASDAQ:UK)||Amicus Therapeutics||200.0||Fabry Disease License|
|Pfizer and four other pharmas||Ablexis||55.0||Drug Discovery Platform License|
|Biovail (Valeant)||Acadia Pharmaceuticals||8.8||Conclusion of Parkinson's Collaboration|
|NeuroVive (Sweden)||to-BBB (the Netherlands)||N/A||Neurology Partnership|
|Millennium (Takeda-Japan)||Therasis||N/A||Drug Discovery Collaboration|
|Celtic Therapeutics||Resolvyx Pharmaceuticals||N/A||Opthalmic drug Option agreement|
|Pfizer||MacroGenics||N/A||Cancer License and Collaboration|
|Abbott Laboratories||Myriad Genetics||N/A||Companion Diagnostic Cooperative Agreement|
|Jingxin Pharmaceutical (China_||Evotec (Germany)||N/A||Insomnia Drug License|
|Seattle Genetics||Compugen (Israel)||N/A||Oncology Collaboration and License Option|