AVEO and Biogen (BIIB) announced a strategic collaboration for the development and commercialization of AVEO’s novel discovery-stage ErbB3-targeted antibodies for the potential treatment of cancer and other diseases.

TERMS

All this talk by Astellas (ALPMF.PK) about taking over the board of directors and taking the decision to the shareholders seems it may have been in vain. Gilead (GILD) has agreed to acquire CV Therapeutics (CVTX) for $1.4B or $20/share through a tender offer and second step merger. - a $400M bump to the last Astellas offer of $16/share.

Terms

There was an article Tuesday morning on Bloomberg insinuating that the Pfizer/Wyeth, Genentech/Roche and now Merck/Schering-Plough mergers have placed pressure on the remaining members of big pharma to get into the game. I implore them not too; megamergers are rarely, if ever, good for business. Recent history suggests acquiring small companies with one major, late-stage pipeline drug is the way to go. I’d argue that Lilly and Takeda with their slightly overpriced purchases of ImClone and Millennium respectively will come out much further ahead in the long run than Pfizer and Merck.

Hypothetically, let’s say major Pharma X has $10B in cash and is looking for strategic alternatives in this high cost of capital environment. There are (simplistically) three options:

Not to be outdone by Pfizer (PFE) / Wyeth (WYE), Merck (MRK) and Schering-Plough (SGP) announced that their Boards of Directors have unanimously approved a merger. Schering has a strong pipeline and was my best of breed to be acquired in the medium sized pharmaceutical space. I think Merck just made a nice step forward in solidifying itself as a top 5 pharmaceutical company in the near future.

Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares and $10.50 in cash for each share of Schering-Plough. Each Merck share will automatically become a share of the combined company. Merck Chairman, President and Chief Executive Officer Richard T. Clark will lead the combined company.

Vertex (VRTX), which is developing the hepatitis C virus ((HCV)) protease inhibitor telaprevir, will add two polymerase inhibitors to its HCV drug development portfolio through an agreement to acquire privately-held ViroChem Pharma in a stock and cash transaction. The move expands Vertex’s global presence in HCV and has the potential to enhance the profile and lifecycle of our telaprevir-based combination regimens.

Terms

Astellas (ALPMF.PK) announced that its indirect subsidiary, Sturgeon Acquisition, Inc., has commenced a cash tender offer for all outstanding shares of common stock of CV Therapeutics (CVTX) at a price of US$16.00 per share. The offer and withdrawal rights are scheduled to expire at 12:01 a.m., New York City time on March 27, 2009, unless the offer is extended. The Company also announced that it is considering taking action in connection with CV Therapeutics’ 2009 Annual Meeting.

The Astellas tender offer represents a 41% premium to CV Therapeutics’ closing share price on January 26, 2009, the day prior to the public disclosure of Astellas’ proposal, and a 69% premium to CV Therapeutics’ 60-day average closing price ending January 26th. The tender offer is not conditioned on financing and represents a total equity value of approximately $1.1 billion.

Just a week after NeuroSearch failed a phase II pain trial (ABT-894), they’ve inked a collaboration which will focus on new CNS therapeutics based upon defined ion channel targets.

NeuroSearch is eligible to receive equity payments and research funding of up to USD 30 million over the three years of the alliance.

Idenix (IDIX) and GlaxoSmithKline (GSK) announced the execution of a license agreement granting GSK exclusive worldwide rights to IDX899.

Terms

Upfront: $34M ($17M in cash; $17M equity stake @ 6.87/share or ~17% premium to 30 day trailing ave)
Milestones: $416M
Royalties: Double digit tiered
Development: GSK assumes all responsibility and associated costs

Astellas (ALPMF.PK) announced that it has submitted a proposal to the Board of Directors of CV Therapeutics to acquire all outstanding common shares of CV Therapeutics for $16.00 per share in cash. The proposal represents a 41% premium to the closing share price of CV Therapeutics on January 26, 2009, and a 69% premium to CV Therapeutics’ 60-day average closing price. The proposal is not subject to any financing condition and represents a total equity value of $1.0 billion on a fully diluted basis.

This proposal was previously submitted to the Board of Directors of CV Therapeutics in a letter dated November 14, 2008 and Astellas was informed on November 21, 2008 that the CV Therapeutics Board had rejected the proposal. CV Therapeutics has subsequently declined to engage Astellas in any meaningful discussions regarding a transaction.

Reasons to buy Wyeth (WYE)

1. Misery loves company.

Reasons not to buy Wyeth

1. Doesn’t come close to solving Pfizer’s (PFE) near term need for late-stage pipeline drugs
2. Major mergers in pharma almost always destroy shareholder value (Pisano, 2007).
3. Fails to address lack of internal R&D productivity (i.e., not a “disease modifying” business move but rather, a superficial band-aid).
4. Opportunity cost is too high; Pfizer could buy 10 innovative companies for the cost of 1 Wyeth (e.g., Shire, BioMarin, OSI, Allergan, Forest…) or, move into generics.
5. Wyeth’s marketed / late-stage pipeline has issues: Protonix and Effexor lose patent protection by 2011, bifeprunox and Pristiq have been plagued by issues / slow uptake and will probably never reach the combined $4B in projected sales.

I would be astonished if this deal materialized.

Bristol-Myers Squibb (BMY) has decided to jump into the hotter by the second race for hepatitis C therapies. BMS and ZymoGenetics have entered a global collaboration for PEG-Interferon lambda, a novel type 3 interferon currently in Phase Ib development for the treatment of Hepatitis C, and its related development program.

Terms
——————-
Upfront: $85M plus $20M in licensing fees

Cubist (CBST) and Alnylam (ALNY) have formed a strategic collaboration to develop and commercialize Alnylam’s ALN-RSV program. The RSV-specific RNAi therapeutic program includes ALN-RSV01, which is currently in Phase II clinical development for the treatment of respiratory syncytial virus ((RSV)) infection in adult lung transplant patients, as well as several other potent and specific second-generation RNAi-based RSV inhibitors in pre-clinical studies.

Deal Terms
————————-
- $20M upfront
- $82.5M in potential sales and milestone payments
- 50/50 Co-development and profit sharing agreement in US
- Cubist has full commercialization rights EX-US and Asia
- Alnylam receives double digit royalties EX-US and Asia

BioMarin Pharmaceutical (BMRN) and La Jolla Pharmaceutical Company announced that they have entered into an agreement to develop and commercialize Riquent®, La Jolla’s investigational drug for lupus nephritis, in the United States, Europe and all other territories of the world, excluding the Asia Pacific region. Following a successful Phase 3 trial, the parties will share equally in all losses and profits. In the United States, BioMarin and La Jolla will jointly commercialize Riquent. In Europe and other territories outside of Asia, BioMarin will be responsible for all commercialization activities.

Deal Terms

GlaxoSmithKline (GSK) and Dynavax (DVAX) announced a worldwide strategic alliance to discover, develop and commercialize novel inhibitors of endosomal Toll-like Receptors ((TLRs)) for the treatment of immuno-inflammatory diseases. Dynavax’s lead inhibitor drug candidate, DV1079, is a bifunctional inhibitor of TLR7 and TLR9, and is expected to enter clinical development in the fourth quarter of 2009.

Under the terms of the alliance, Dynavax will receive an initial payment of $10 million for which GSK will receive an exclusive option over four programs targeting autoimmune and inflammatory diseases such as lupus, psoriasis, and rheumatoid arthritis.

Ascent Therapeutics announced that it has entered into a licensing option agreement through the Novartis Option Fund. Ascent will discover and develop Pepducin drug candidates against a specific GPCR target. The agreement includes an upfront fee and potential milestones totaling over $200 million as well as royalties.

Don’t know what Pepducins are? You’re not alone. It’s hard to keep up with all the imaginary but important sounding names made up by marketers for mildly novel technologies these days. According to their website, they are short peptides that modulate GPCRs in the transmembrane domain or intracellularly by using a lipophilic tether.

Regulus Therapeutics, a joint venture between Alnylam (ALNY) and Isis (ISIS) formed to discover, develop, and commercialize microRNA-based therapeutics, announced the publication of new research in the journal Nature on the role of a microRNA, known as miR-21, in heart failure.

Apparently, this is the first time a microRNA drug has reversed or halted a disease (not biomarkers for the disease, but the disease itself) in an animal model. Interesting science no doubt, but before we anoint microRNA therapy as the hottest area in drug development we should keep in mind a few things:

Johnson & Johnson (JNJ) and Omrix Biopharmaceuticals (OMRI), a biopharmaceutical company that develops and markets biosurgical and immunotherapy products, announced a definitive agreement whereby Omrix will be acquired for approximately $438 million in a cash tender offer. Omrix is expected to operate as a stand-alone entity reporting through ETHICON, a J&J company and leading provider of suture, mesh, hemostats and other products for a wide range of surgical procedures.

The acquisition of Omrix would strengthen its presence in active, biologic-based hemostats and convergent products for various surgical applications. ETHICON currently has exclusive distribution rights in the U.S. and the European Union for EVITHROM((TM)) Thrombin Topical (Human) and EVICEL((TM)) Fibrin Sealant (Human), two active, biologic-based hemostats manufactured by Omrix. ETHICON and Omrix are also partnering on a Fibrin Pad product candidate, currently in Phase II clinical trials, as an adjunct to control mild to moderate soft tissue bleeding.

Exelixis announced that Bristol-Myers Squibb (BMY) has exercised its option to develop and commercialize Exelixis’ investigational new drug ((IND)) candidate XL413, a selective inhibitor of Cdc7.

XL413 is a small molecule inhibitor of the serine-threonine kinase Cdc7. The function of Cdc7 is required for DNA replication to proceed, and its activity is often unregulated in cancer cells. Studies suggest that Cdc7 plays a role in regulation of cell cycle checkpoint control and protects tumor cells from apoptotic cell death during replication stress.

Talk about a tough market, according to a recent report, half of all biotech’s with a market cap under $200M are trading for less than cash on hand. YM Biosciences (YMI)  is no exception and BBM is trying to snag a bargain.

Under BBM’s proposal, BBM would acquire all of the outstanding shares of YMI common stock for consideration per share of $0.50 in cash plus 0.375 share of BBM common stock (aggregating for all YMI stockholders approximately 45% of the combined company’s outstanding stock after giving effect to the merger). The cash portion of BBM’s proposal represents a premium of 84.5% above the closing price of YMI common stock of $0.271 on November 12, 2008 (and a substantially greater premium taking into account the value of the BBM stock issued in the merger).

ArQule and Daiichi Sankyo announced that they have entered into two agreements that form the basis of a strategic relationship for the development and discovery of novel oncology therapeutics. One agreement covers the license of ARQ 197 and the other is an R&D agreement.

ARQ 197 is a phase 2 stage, selective inhibitor of c-Met, a receptor tyrosine kinase. When abnormally activated, c-Met plays multiple roles in aspects of human cancer, including cancer cell growth, survival, angiogenesis, invasion and metastasis. Pre-clinical data have demonstrated that ARQ 197 inhibits c-Met activation in a range of human tumor cell lines, including clear cell sarcoma, and shows anti-tumor activity against several human tumor xenografts.