Hep C drug deal frenzy can’t be slowed by growing doubts

Posted under Achillion Pharmaceuticals, Biocryst, Blog, Companies, Diagnostics, Funding, Hepatitis C, Idenix Pharmaceuticals, Inhibitex, Medical Devices, Medical Supply, Pharmaceuticals, Pharmasset, Startups, Universities, Videos by John Carroll

At the BIO CEO & Investor Conference in New York yesterday, Achillion CEO Michael Kishbauch wrapped up his remarks on the biotech's hepatitis C programs by making it clear that he was angling for a clean buyout for a premium that would "put a silly grin on all our faces." A merger of equals, he made clear, was not his first choice. And he is actively in pursuit of a deal.

Kishbauch has made no secret of his delight that Achillion is positioned at one of the busiest intersections in the R&D world. Captivated by the megablockbuster prospects of a next-gen oral therapy that can quell the hep C virus without the use of interferon injections, which trigger a hornet's nest of adverse effects for many patients, investors have been bidding up the value of Achillion's stock ($ACHN) as well as Idenix ($IDIX), the two independent biotechs which are furthest down the pipeline after the big acquisitions of Pharmasset ($VRUS) and Inhibitex ($INHX).

Kichbauch's theory, widely held in the industry, is that a few key cocktail treatments that can quickly knock down the virus and keep it in check will relatively soon be able to divvy up a $20 billion marketplace. And he believes Achillion holds the ticket for any company looking for the inside track on that drug race.

Bloomberg isn't letting anyone forget, either. In the latest iteration of the spotlight now trained on hepatitis C, the business news service once again stirs the pot of takeover speculation, quoting Raghuram Selvaraju, an analyst with Morgan Joseph TriArtisan, as a believer in the common view that buyouts for Achillion and Idenix are inevitable.  

"I don't think either of these companies will remain independent very long," Selvaraju said in a telephone interview. "I think we'll see both of them out of there by the end of the year."

Looking for further proof? Shares of BioCryst ($BCRX) spiked 17% this morning on its release touting positive preclinical results for BCX5191, a hepatitis C drug that supposedly has rung all the key bells: Signs of potent pan-genotype antiviral activity in its in vitro and in vivo work.

Normally, preclinical results don't warrant much attention in the biotech world. But that was before Pharmasset was acquired for close to $11 billion. The overheated response, though, is earning some frowns in the Big Pharma world. Moncef Slaoui, GlaxoSmithKline's ($GSK) R&D chief, has now joined Sanofi's ($SNY) Chris Viehbacher in voicing doubts about the sums being paid for risky experimental programs. Time will tell whether the hep C buyout frenzy has already peaked, or whether the speculators can still cash in.   

- read the Bloomberg article
- here's the release from BioCryst

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Idenix gets good news on hep C trial, but can’t compete with Gilead

Posted under Achillion Pharmaceuticals, Blog, Companies, Diagnostics, Funding, Gilead Sciences, Hepatitis C, Idenix Pharmaceuticals, IDX184, Medical Devices, Medical Supply, Pharmaceuticals, Startups, Universities, Videos by John Carroll

Idenix put out the news this morning that the FDA had lifted a partial hold on its hepatitis C drug IDX184--and then watched its share price slide.

In a sign of just how volatile the whole hepatitis C arena has become after back-to-back blockbuster buyouts, the key focus today is on Gilead's ($GILD) surprise acknowledgement that its new hep C favorite scored promising numbers for the genotype 1 patient population. Indenix ($IDIX) and Achillion ($ACHN)--the other biotech most frequently mentioned as a likely takeover target--suffered from the comparison.

"After review of the interim safety and antiviral activity results from the IDX184 phase IIb clinical trial, the FDA removed the partial clinical hold and has allowed us to continue enrollment of this study," says Idenix CEO Ron Renaud. "Importantly, this allows us to expand the phase IIb program and evaluate IDX184 in interferon-free combination regimens with other direct-acting antivirals. We are working toward beginning all-oral combination trials as quickly as possible."

Expanded trial, all oral, interferon-free--all good things in the hepatitis C world. As MarketWatch noted a couple of days ago, investors have been bidding up shares of Idenix and Achillion in the hope that they can profit from some other premium buyout. William Blair analyst Katherine Xu told the wire service that any Idenix buyout would likely be put on hold until after that pesky partial hold was lifted. But for a few hours anyway, Idenix's good news can't compete with promising data from Gilead.

- read the press release
- get the story from MarketWatch

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JPM kicks off with fevered focus on the next big biotech deal

Posted under Abbott Labs, Achillion, Biotech IPO, Blog, Boehringer Ingelheim, Bristol-Myers Squibb, Companies, Diagnostics, Funding, Hepatitis C, Idenix Pharmaceuticals, Inhibitex, Medical Devices, Medical Supply, Merck, Mergers and Acquisitions, Novartis, Pharmaceuticals, Pharmasset, Roche, Startups, Universities, vertex, Videos by John Carroll

The news of the Bristol-Myers/Inhibitex deal couldn't have been better timed. With the biotech world converging on San Francisco today for the annual JP Morgan confab, there's nothing like a 10-figure deal to get everyone whipped up about the potential for making it big in drug development. And this year you can expect to hear plenty of discussion about another year where deal-making will be at the top of the agenda for the biopharma business.

So who's next? Ever since the $11 billion Pharmasset ($VRUS) buyout, tongues have been wagging about the next likely takeout. And now that Inihibitex ($INHX) has found a buyer and agreed to a price, Idenix ($IDIX) and Achillion have emerged as the next two biotechs most likely to find themselves asking for more at the bargaining table. Both developers helped feed the rumor mill today with some positive updates on their hep C programs.

Edward Tenthoff, an analyst with Piper Jaffray, has tapped Vertex ($VRTX), J&J ($JNJ), Merck ($MRK), Boehringer Ingelheim, Abbott ($ABT), Pfizer ($PFE) and Novartis ($NVS) as potential buyers, a list that is too long to be completely wrong. Brian Skorney would add Roche ($RHHBY) to the list of hep C bidders, which would help to further inflate any final price being paid for a remaining biotech player.

Bloomberg, which loves to feast on buyout rumors, helped prime the discussion pump in advance by speculating that a pair of big biotechs--Amgen ($AMGN) and Celgene ($CELG)--could make deal-making even hotter this year if they kick off a big round of buyouts to excite fretting investors about their future.

The problem is that the early-January JPM hype almost never lives up to the reality. The most exciting thing that could happen to biotech this year would be a big IPO for a drug developer with all its assets in the clinic. That kind of trend would really help inspire investors to sink cash into biotechnology. And there's no firm indication that this year will be all that different from the bleak reality of the past three years.  

- here's the story from Bloomberg   

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Who’s next on hep C biotech buyout hit list?

Posted under Achillion Pharmaceuticals, Blog, Companies, Diagnostics, Funding, Gilead Sciences, Idenix Pharmaceuticals, Inhibitex, Medical Devices, Medical Supply, Pharmaceuticals, Pharmasset, Startups, Universities, Videos by John Carroll

After the big biotech deal comes the big biotech buzz. And one of the big questions on everyone's mind after Gilead Sciences ($GILD) announced its $11 billion deal to acquire Pharmasset is, "Who's next?" Would Inhibitex, Achillion or Idenix be the next biotech to find itself in the cross hairs of a potential suitor? Would these new deals rival Gilead's willingness to pay 70 times net assets to complete a deal?

Pharmasset ($VRUS), of course, had already established itself as one of the hottest biotechs in the U.S. as it moved toward pivotal trials of a possible new interferon-free approach to treating hepatitis C. Analysts quickly factored in a multibillion-dollar market impact if the biotech's lead drug actually keeps to a brisk schedule pointing to a 2014 approval. Investors had bid up Pharmasset's share value before Gilead came up with its final offer--a jaw-dropping premium considering the way most speculative biotech stocks are priced these days.

"These deals tend to happen in waves," Dan Veru, Palisade Capital Management's chief investment officer, dishes to Bloomberg. And with William Blair estimating that next-gen hep C drugs will garner a $20 billion market by 2020, you can bet that investors' tongues will be wagging as the odds-makers line up prospective buyouts.

Achillion Pharmaceuticals' ($ACHN) CEO had already triggered some modest speculation when he told Bloomberg last week that he had been in "advanced talks" with possible buyers. But Inhibitex ($INHX) may be the leader of the pack right now, as its rival INX-189 bears some resemblance to Pharmasset's lead program. Idenix Pharmaceuticals' ($IDIX) IDX184, which will start delivering midstage data in the next quarter, is another Pharmasset look-alike that could attract the attention of buyers turned away from the bidding for Pharmasset.

But now that Pharmasset set the bar so high on valuations, who can afford to keep up with Gilead?  

- here's the article from Bloomberg

Special Report: Gilead Sciences - Biotech's Biggest Spenders 2011

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