Three new rules for biopharma collaborations

Posted under Anna Protopapas, Avila Therapeutics, Big Pharma, Blog, Celgene, Center for Therapeutic Innovation, Companies, Diagnostics, Funding, Jose-Carlos Gutierrez-Ramos, M&A, Medical Devices, Medical Supply, partnerships, Pharmaceuticals, Startups, Universities, Videos by Ryan McBride

Last week I moderated a panel called "The New Rules of Partnerships and Collaborations" at the Convergence East conference on Cape Cod, and the experience gave me a chance to probe some of the biopharma industry's top dealmakers about their preferences and prejudices going into talks with other companies. I've decided to write down three key observations or "rules" that emerged during the panel and other notes from the Convergence meeting.

1. Competition is heating up for compelling clinical-stage assets--and not just those in Phase III trials. Take Biogen Idec's ($BIIB) recent buyout of Stromedix for its Phase II-ready antibody STX-100 for combating fibrosis. Apparently, Pfizer ($PFE) was interested in buying the asset, Jose-Carlos Gutierrez-Ramos, senior vice president of biotherapeutics R&D at the drug giant, revealed during the panel. Gutierrez-Ramos and Steven Holtzman, Biogen's chief dealmaker (who obviously won the Stromedix deal), traded some jabs about why Biogen prevailed. The bottom line: Stromedix had options. 

2. Which partners are most coveted among biotechs? At least in oncology, Celgene ($CELG) appears to be winning over collaborators. In one off-the-record conversation, two heads of business development told me that biotechs are warming up to the flexibility and creativity of the Summit, NJ-based drugmaker in deals. Celgene has been quite active with the recent buyout of Avila Therapeutics, partnership deal with Epizyme and ongoing tie-up with Agios Pharmaceuticals. Yet I wonder whether sharp biotech dealmakers in Cambridge, MA, are getting the best of Celgene at the negotiating table.

For instance, one of my panelists, Anna Protopapas, executive vice president of global business development at Takeda Pharmaceutical, didn't think that her company would have bought Avila Therapeutics under the terms that Celgene did early this year. Protopapas noted that the key asset in the deal, Avila's Phase I Btk inhibitor, is a third-in-class compound, and first-in-class cancer drugs have an edge because of the difficulty that later drugs in the same class face in besting them. Did Celgene--which shelled out $350 million upfront and promised up to $575 million more in milestones--overpay for Avila?

3. Big Pharma can be your friend. Sure, we know about the monumental problems large drugmakers face from expiring patents on key drugs and assaults on their old business models. And, yes, drugmakers are entertaining all kinds of diverse deal structures with biotech companies to soften the blow. Yet every week or so we learn of another strategy drugmakers are using to efficiently develop products. Pfizer's Gutierrez-Ramos shared one with me (though it wasn't covered during the panel). He's now looking for biotech partners that are interested in taking over development of drugs from Pfizer's pipeline. He's offering the compounds for free and willing to share in the success of the programs down the line.

Of course, Pfizer's strategy here builds on the Center for Therapeutic Innovation, which the drug giant expanded last year through several collaborations with academic groups, which work with CTI on translational research. Like CTI, externalizing clinical development of Pfizer compounds at biotech companies, including venture-backed startups, lets the drug giant tap expertise that doesn't reside under its own roof.

"I think the misperception is that," outside of large buyouts and tiny deals, "Pfizer is not a great partner to work with because, due to the big acquisitions, we are product-driven [and] that the perception out there is that we just want products," Gutierrez-Ramos said. "And what we have been trying to re-prove over the last two years is that the new Pfizer is not like that." -- Ryan McBride (Email | Twitter)

HGS faces skeptics as it boasts of a crowded bargaining table

Posted under albiglutide, Blog, Companies, darapladib, Diabetes, Diagnostics, Funding, GlaxoSmithKline, Human Genome Sciences, M&A, Medical Devices, Medical Supply, Pharmaceuticals, Startups, Universities, Videos by John Carroll

Human Genome Sciences has prescribed a poison pill for GlaxoSmithKline's hostile takeover bid. And after making a detailed case for a much better buyout deal, the biotech says it's already engaged in talks with other pharma and biotech companies interested in bidding on the company. 

In a lengthy statement, HGS ($HGSI) asserts that it "has entered into confidentiality agreements with certain parties and is providing those parties an opportunity to engage in a due diligence review of confidential information." And the company goes on to complain that GSK ($GSK), its long-time development partner with an intimate understanding of the company's potential, simply waited until its share price hit a 52-week low before pouncing.

The biotech's remarks include a detailed case for its pipeline, which includes the potential blockbuster darapladib, a heart drug. Albiglutide, an experimental treatment for diabetes, is tied to $150 million in potential milestones alone. But the argument made little headway with at least one key analyst.

"This is all the usual and expected posturing," Cowen's Eric Schmidt noted to Bloomberg. "I believe GSK remains committed to buying HGSI and do not expect others to have much interest." 

- here's the press release
- read the Bloomberg report
- get the story from The New York Times

Related Articles:
Glaxo goes hostile on HGS with $2.6B bid
GSK raises fists in $2.6B hostile bid for Human Genome Sciences
Pharma rides a wave of targeted M&A deals
 

Piramal bets on pharma’s data binging in $635M buyout

Posted under Blog, Companies, data analytics, Decision Resources Group, Diagnostics, Funding, M&A, Medical Devices, Medical Supply, pharma, Pharmaceuticals, Piramal Healthcare, R&D, Startups, Universities, Videos by rmcbride

Sold on the growing need for market data in biopharma, India's Piramal Healthcare has scooped up Decision Resources Group in deal valued at about $635 million, Piramal and DRG revealed Wednesday. The deal comes amid rapid business expansion at Decision Resources, which provides web-based research tools, predictive analytics and other services to drugmakers and other healthcare stakeholders. An attracive buyout target, Decision Resources has managed to retain 95% of its customers while serving 48 of the 50 top biopharma companies in the world. Article

Buzz: Big Pharma suitors line up for a look at Amylin’s books

Posted under Amylin pharmaceuticals, AstraZeneca, Blog, Bristol-Myers Squibb, Carl Icahn, Companies, Diagnostics, Funding, M&A, Medical Devices, Medical Supply, Pharmaceuticals, Roche, Sanofi, Startups, Universities, Videos by john

One of the cardinal rules involved in deal-making focuses on the need to get as many buyers to the negotiating table as possible. The next big rule: Make sure everyone knows who's interested in bidding.

Amylin--while maintaining a strict no comment policy ever since initial reports appeared the Bristol-Myers Squibb ($BMY) had made an offer--has scored on both points with a Bloomberg report out this morning assessing the line of potential bidders queuing up to take a confidential look at the books. By the business news service's count, fed by an inside source, Pfizer ($PFE), AstraZeneca ($AZN) and Sanofi ($SNY) have all signed confidentiality agreements, joining Merck ($MRK), Takeda, Roche ($RHHBY) and Bristol-Myers Squibb at the auction block.

With a market cap of $4 billion, Amylin ($AMLN) can be bought for a reasonable enough sum, offering up product revenue and a background in diabetes development that would complement quite a few potential acquirers. Amylin spent $162 million last year on R&D. But its newly approved Bydureon could prove a much tougher sale than some would like to take on.

"Diabetes is an area companies either want a position in or want a stronger position in," Deutsche Bank analyst Mark Clark tells Bloomberg. "Amylin is not a massive financial stretch so it comes down to what companies' alternatives are, whether there are other synergies involved and who it makes the most sense to. Some companies are more desperate for revenue sources than others."  

That last point on desperation indicates that AstraZeneca, at least, may be more willing than the others to pay a premium for Amylin. Sanofi, meanwhile, is reportedly undeterred that its experimental lixisenatide would compete with Amylin's drug roster. And that could leave Amylin--along with its advisers from Credit Suisse and Goldman Sachs--right where it wants to be: At the center of a bidding war. Even Carl Icahn would have to admire that strategy.

- here's the story from Bloomberg

Related Articles:
Buzz: Amylin brings in the bankers to spur an auction
Icahn sues Amylin in hopes a proxy fight will trigger sale
Is an Amylin takeover inevitable after the BMS rejection?
AstraZeneca nears bundle of buyouts to feed ailing pipeline