Healthcare, Technology Converge: Recent Biotech Deals

by: The Burrill Report

By Marie Daghlian

Giant technology firms see great potential for growth in the healthcare arena, as firms such as Microsoft (NASDAQ:MSFT), IBM, and Google (NASDAQ:GOOG) position themselves as players in the space. Oracle’s (NYSE:ORCL) $685 million all cash acquisition of Phase Forward, a leading data management provider for clinical trials and drug safety, is part of the world’s largest enterprise software company’s strategy to expand its reach in the healthcare arena. The deal builds on Oracle’s acquisition last year of California-based drug safety and risk management company Relsys International.
“The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation,” said Neil de Crescenzo, Senior Vice President and General Manager, Oracle Health Sciences in a statement. “Phase Forward brings outstanding products and employees with significant expertise to Oracle that will help enable the delivery of personalized medicine and value-based healthcare.”
Phase Forward’s Integrated Clinical Research Suite manages clinical development and safety processes from phase 1 clinical trials through regulatory submission and post-approval monitoring, and according to the company, its technology has been used in more than 10,000 clinical trials by many large pharmaceutical companies and regulatory agencies.
Oracle is offering $17 per share in cash for the Waltham, Massachusetts-based company’s shares. Phase Forward will be folded into Oracle’s Health Sciences Global Business unit. The transaction, subject to stockholder and regulatory approval, is expected to close mid-2010.
Javelin Pharmaceuticals (JAV) broke its $96 million merger deal with Myriad Pharmaceuticals (NASDAQ:MYRX) for a sweeter, and binding, merger offer from Hospira (NYSE:HSP) worth $141 million. Javelin and Myriad’s deal was a share exchange while Hospira offered to acquire all outstanding shares of Javelin for $2.20 per share in cash. Hospira will also provide Javelin with a $4.5 million working capital facility to fund Javelin until the merger is completed, provide $8.3 million to repay Javelin’s loan from Myriad, and $4.4 million to pay the break-up fee. Although Myriad had until midnight April 16 to respond with a better offer, the company has remained silent.
The deal will expand Hospira’s pipeline of specialty injectables. Javelin’s injectable pain drug Dyloject has been submitted to the U.S. Food and Drug Administration for marketing approval and the company expects an answer by the beginning of October.
Devices that help manage diabetes are hot. Just weeks after Sanofi-Aventis (NYSE:SNY) signed a development deal with U.S. blood glucose monitor developer Agamatrix, Roche (OTCQX:RHHBY) also boosted its position in the space by buying Medingo, a unit of Israeli holding company Elron Electronics (ELRN), for an upfront payment of $160 million as well as up to 25 percent of the upfront payment in performance milestones. Medingo is developing a semi-disposable insulin patch pump that consists of two parts: a semi-disposable insulin dispensing patch and a remote control so the patient can control insulin delivery.
“With this acquisition we will broaden our portfolio of innovative insulin delivery technologies and strengthen our position as a leading player in the diabetes care business,” said Roche Diagnostics Chief Operating Officer Daniel O'Day in a statement.
Roche is already a leader in the insulin delivery system global market where its main competitors are Bayer, Johnson & Johnson (NYSE:JNJ) and Abbott (NYSE:ABT) in pumps and blood glucose monitoring, according to the company. A global launch is expected in 2012.
Teva Pharmaceuticals (NYSE:TEVA) has been busy, not only expanding its presence in generics, but also with its expansion into branded drugs. The Isreali pharma entered into a research and exclusive license agreement with U.S. biotech Mersana Therapeutics, a cancer therapeutic platform company, to develop and commercialize XMT-1107, a novel fumagillin analog, in all indications, including cancer. Mersana plans to initiate a phase 1 clinical trial for XMT-1107 in the second quarter of 2010. As part of their agreement, Teva will receive an exclusive license to XMT-1107 for all indications worldwide, excluding Japan, for which Mersana will retain rights. Mersana will be eligible to receive up to $334 million if all development, regulatory and commercial milestones are met across several indications. Mersana will be eligible to receive royalties on net sales worldwide. Teva will cover all development costs for XMT-1107, excluding those specific to Japan.
Mersana Therapeutics employs a biodegradable polymer platform, Fleximer, to generate a pipeline of novel compounds with the potential to address multiple oncology indications. XMT-1107 is a conjugate of Fleximer and a novel analog of fumagillin, an angiogenesis inhibitor with a mechanism of action distinct from agents that principally target vascular endothelial growth factor. Fumagillins come with safety concerns that Mersana believes its flexible biopolymer conjugate technology can resolve.
Cambridge, Massachusetts-based biotech Agios Pharmaceuticals entered into a global strategic collaboration with Celgene (NASDAQ:CELG) focused on targeting cancer metabolism using Agios’ cancer metabolism research platform. The platform is based on the concept that targeting key metabolic enzymes unique to rapidly proliferating cancer cells can “starve” the cancer. Under the terms of their agreement, Agios will get $130 million upfront that includes an equity investment by Celgene. Agios will lead discovery and early translational development for all cancer metabolism programs. Celgene has an exclusive option to license any resulting clinical candidates at the end of phase 1, and will lead and fund global development and commercialization of licensed programs. On each program, Agios may receive up to $120 million in milestones as well as royalties on sales, and may also participate in the development and commercialization of certain products in the U.S.
German biotech, AiCuris, a Bayer Healthcare spin-out, raised $75 million in its second round of financingfor further development of its antiviral and antibacterial compounds. The main investor is the Santo Holding of Andreas and Thomas Strüngmann, the former owners of the generics company Hexal. AiCuris develops novel, resistance-breaking drugs for the treatment of HCMV, herpes, Hepatitis B, HIV and Hepatitis C as well as resistant Gram positive and Gram negative bacterial infections in hospitals. The company recently demonstrated, in a mid-stage study, the efficacy and safety of its lead treatment against Human Cytomegalovirus, a virus that often leads to complications after organ or bone marrow transplantations and is also a major infectious cause of birth defects and neurological sequels including hearing loss after birth.
Personalized cancer medicine company Foundation Medicine completed a $25 million Series A financing led by Third Rock Ventures. The Massachusetts company aims to bring comprehensive cancer genome analysis into routine clinical care. Proceeds from the financing will be used to develop clinical laboratory tests -- using next generation sequencing and other advanced technologies -- that will broadly analyze the relevant tumor genomic and other molecular information in individual patients' cancers and connect it with a knowledge base of clinical data to help oncologists personalize treatment.
Finally, Neovacs completed its initial public offering on Alternext by NYSE Euronext Paris. The response was underwhelming, possibly because its pipeline consists of three compounds in early-stage development. The French biotech, which develops immunotherapies for autoimmune and chronic diseases, sold 2 million shares at $6.48 per share to raise $13.5 million. The company had originally proposed selling 4.4 million shares at a price range of $6.50 to $7.50. It will begin trading under the symbol ALNEV on April 21.

Company Location Amount Raised ($M) Principal Focus
Axerion Therapeutics New Haven, CT 0.75 Neurology
MGB Biopharma Scotland, United Kingdom 3.00 Infectious
AltheaDx San Diego, CA 6.00 Companion Diagnostics
Articulinx Cupertino, CA 10.00 Medical devices
biospace med Paris, France 18.00 Medical imaging
Beijing YiCheng Bioelectronics Beijing, China 10.30 Blood glucose monitoring
Exos Arden Hills, MN 0.93 Medical devices
Foundation Medicine Cambridge, MA 25.00 Cancer genomics
C10 Pharma Norway 1.50 Antibiotics
AiCuris Wuppertal, Germany 75.00 Infectious
Avraham Pharmaceuticals Jerusalem, Israel 9.00 Neurology
Crossbeta Biosciences Utrecht, Netherlands 2.70 Protein engineering
Nautilus Neurosciences Bridgewater, NJ N/A Specialty pharma
Catabasis Pharmaceuticals Cambridge, MA 7.70 Inflammatory, metabolic
Ambit Biosciences San Diego, CA 12.00 Oncology
Allylix San Diego, CA 3.00 Specialty chemicals
Company Funding/Contracting Agency Amount ($M) Principal Focus
Genocea Biosciences U.S. Army Medical Research and Materiel Command 2.70 Malaria vaccine
Corgenix Medical NIH N/A Viral diagnostics
PROLOR Biotech (Israel) israeli Office of Chief Scientist 1.60 Endocrine
Nano Retina (Israel) BIRD Foundation 0.75 Bionic retina
HemoSchear NIH NHLBI SBIR N/A Pathway analysis
PolyTherics (United Kingdom) Technology Strategy Board 0.16 Protein engineering
TOTAL: $5.21
Company Funding/Contracting Agency Amount ($M) Financing Type
Neovacs (France) Paris:ALNEV $13.50 IPO
Ondine Biopharma (Canada) TSX: OBP 0.75 PIPE
Osta Biotechnologies (Canada) TSX-V:OBI 0.50 PIPE
Manhattan Pharmaceuticals OTC:MHAN 0.53 PIPE
CardioComm Solutions (Canada) TSX-V:EKG 0.50 PIPE
ALDA Pharmaceuticals (Canada) TSX-V:APH 0.50 PIPE
Dynavax Technologies DVAX $44.00 Follow-on
Radient Pharmaceuticals RPC 9.50 Debt
Benitec Limited (Australia) ASX:BLT 6.00 Debt
Mirabilis Medica Private 1.00 Debt
Ex-US $21.75
Acquirer Target Deal Value in $M Focus
Roche (Switzerland) Medingo (Elron Electronics-Israel) $200.00 Medical devices
PerkinElmer (NYSE:PKI) Signature Genomic Laboratories $90.00 Diagnostics
VaxGen (OTC:VXGN) diaDexus $21.00 Diagnostics
ChromoCure Genome Research Group $25.00 Cancer Detection Technology
Pfizer (NYSE:PFE)/Pfizer Investments Netherlands Pfizer Limited India N/A Biopharmaceuticals
JW Asset Management and Edward Schutter Arbor Pharmaceuticals N/A Pediatric medicine
Catherex MediGene (Germany) N/A Oncology
Thermo Fisher Scientific (NYSE:TMO) Proxeon (Denmark) N/A Tools/Technology
Oracle Phase Forward $685.00 Healthcare IT
Hospira Javelin $141.00 Pain therapeutics
Company/Licensee Company/Licenser Deal Value in $M Focus
Upsher-Smith Laboratories Proximagen Neuroscience (United Kingdom) N/A Neurology license
Abbott Laboratories Axis-Shield (United Kingdom) N/A Diagnostics partnership
Orient Europharma (Taiwan) Medinox N/A Renal drug collaboration
miRagen Therapeutics RXi Pharmaceuticals (NASDAQ:RXII) N/A microRNA research collaboration
Mirna Therapeutics Rxi Pharmaceuticals N/A Oncology research collaboration
Takeda Pharmaceuticals (Japan) Metabolex N/A Metabolic research collaboration
Teva Pharmaceuticals (Israel) Mersana Therapeutics $334.00 Oncology drug license
Celgene Agios Pharmaceuticals $130.00 Oncology collaboration and license option
Mauna Kea Technologies (France) EndoControl (France) $22.10 Endoscopy research collaboration

About this article:

Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here