The deal allows Hologic to expand into emerging markets in China and Europe, where is currently has limited presence.

The all-cash transaction is expected to be funded through available cash and additional financing of term loans and high yield securities.

Both companies point to the market penetration and cross-selling opportunities generated by the combination.

Rob Cascella, President and Chief Executive Officer of Hologic, said, “Gen-Probe is an ideal partner and strategic fit to Hologic’s existing diagnostics business and complements our focus on scaling and diversifying our diagnostics franchise. Gen-Probe is a unique player in molecular diagnostics, with best-in-class technology, including the differentiating automation capabilities of TIGRIS and PANTHER, a broad menu of tests, such as the recently approved APTIMA HPV and Trichomonas assays, and a leading blood screening business.

This transaction establishes Hologic as a premier company in STD diagnostics and advances our core focus on women’s health. With unique capabilities and an impressive new product pipeline, our combined company will be well positioned globally to capitalize on the fast-growing molecular diagnostics market with an established global infrastructure.”   Mr. Cascella continued, “Through this compelling transaction, we will achieve critical mass in our core diagnostics business and meet the needs of our customers with a broader portfolio of diagnostics technology, automation and connectivity solutions. With the combination of our capabilities, Hologic will operate a diagnostics franchise with the growth potential similar to our breast health franchise.”

Carl Hull, Chairman and Chief Executive Officer of Gen-Probe, said, “This transaction provides compelling cash value for our shareholders and represents an outstanding opportunity for our business. Together, Gen-Probe and Hologic will be very well-positioned to pursue a complete range of diagnostic opportunities in women’s health, with a stronger focus on the dynamic molecular diagnostics market. Specifically, we are excited about the opportunity to increase demand for our APTIMA women’s health products based on Hologic’s global commercial presence. Our employees will benefit as part of a larger diversified organization with the necessary scale and resources to be a leader in today’s rapidly evolving global healthcare marketplace.”

This latest deal continues the significant trend in M&A observed since the start of the year. 2012 appears to be a major year of consolidation in the life sciences.

Steve Poile

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Jazz Pharmaceuticals has agreed to acquire EUSA Pharma, a privately-held, specialty pharmaceutical company with headquarters in the United States and United Kingdom, for $650 million in cash and a potential $50 million milestone payable in cash based upon its lead product, Erwinaze (asparaginase Erwinia chrysanthemi), achieving a specified U.S. net sales target in 2013.

“EUSA Pharma is a compelling strategic fit with our specialty focus and commercial expertise, and furthers our mission to improve patients’ lives by delivering therapies that address serious unmet medical needs,” said Bruce C. Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals.

“This transaction would expand our global footprint and marketed product portfolio to include Erwinaze, a treatment for a life-threatening form of leukemia, as well as other highly specialized products. Our organizations are highly complementary, and we look forward to working with our new colleagues to build an even stronger rapidly-growing company.”

“The combination of Jazz Pharmaceuticals and EUSA Pharma would bring together two highly successful businesses, with teams who are passionate about providing patients with access to vital specialty therapies,” said Bryan Morton, founder, president and chief executive officer of EUSA Pharma.

“There is a strong fit between our two companies’ products, people and values, and the combination would represent a positive transaction for the patients we serve, our collective employees and our shareholders. As a larger and stronger combined organization, we would have greater resources to continue our growth toward becoming a leader in the specialty pharmaceutical sector, bringing our medicines to patients worldwide.”

Is this the end of Jazz’ acquisition trail or is there more to come? Watch this space for details.

Steve Poile

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Ardea’s clinically most advanced product candidate, lesinurad (formerly known as RDEA594), is currently in Phase III development as a potential treatment for the chronic management of hyperuricaemia in patients with gout.

Under the terms of the agreement, AstraZeneca will acquire Ardea for $32 per share which represents a total cash value of approximately $1.26 billion. This represents a premium on the value of Ardea’s stock of 50% based on the one month volume-weighted average price (VWAP) and 54% based on the closing price on Friday, 20 April 2012.

The deal provides AstraZeneca with an excellent addition to its late stage pipeline.

Lesinurad is a selective inhibitor of URAT1, a transporter in the proximal tubule cells of the kidney that regulates uric acid excretion from the body, which is being developed as an oral, once-daily treatment for the chronic management of hyperuricaemia in patients with gout.

Lesinurad is being studied in an ongoing Phase III clinical development programme as an add-on treatment to allopurinol in patients not reaching target serum uric acid levels on allopurinol alone, as monotherapy for those patients who are intolerant to allopurinol or febuxostat and as an add-on treatment to febuxostat in patients with tophaceous gout.

Filings for a New Drug Application (NDA) in the US and a Marketing Authorisation Application (MAA) in the EU are planned for the first half of 2014.

AstraZeneca also plans to develop and commercialise lesinurad in China and Japan. AstraZeneca will supplement Ardea’s existing capabilities to progress lesinurad Phase III development programme and regulatory submissions. The company will seek to absorb the further development costs of the Ardea compounds in its existing R&D programme.

Through this acquisition, AstraZeneca would also add to its pipeline RDEA3170, a next-generation selective URAT1 inhibitor currently in Phase I development.

“This attractive Phase III programme is an excellent opportunity to leverage AstraZeneca’s global specialty and primary care sales and marketing capabilities,” said David Brennan, Chief Executive Officer of AstraZeneca. “The Ardea team has done a great job developing lesinurad along with a promising next-generation gout programme. These compounds have real potential to benefit patients.”

“We are delighted to be joining AstraZeneca,” said Barry D. Quart, President and Chief Executive Officer of Ardea. “From our earliest interactions, we were impressed with the quality of AstraZeneca’s people and we are confident their commercial strength and global reach will help realise the full potential of our programmes. The Ardea team and I are committed to helping complete development and working to secure registration for lesinurad.”

The deal may represent a new phase for AstraZeneca, as it seeks to bolster its late stage pipeline in order to stave off concerns about imminent generic competition for its leading medicines.

Watch this place for further AstraZeneca announcements as and when they happen.

Steve Poile

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In an auction style deal, Nestle’s bid of $11.85 billion beat a $11 billion offer from Danone.

The nutrition-unit sale comes as Pfizer is readying a spinoff of its animal health business. The drugmaker announced its plans to shed both units last summer as part of a restructuring designed to streamline the company and focus attention on its branded-drug nucleus.

“The sale of the nutrition business to Nestlé is consistent with Pfizer’s intention to generate the greatest value for shareholders by maximizing the value-creation potential of our businesses and prudently managing our capital allocation,” CEO Ian Read said in a statement.

Nestle will use the new asset to rebuild its momentum in the Asian market, where the Pfizer unit geta bout 85 percent of its sales.

Analysts believe that despite the higher offer from Nestle, the deal with Nestle made more sense for Pfizer than a deal with Danone, due to regulatory hurdeles a Danone deal would have thrown up, specifically in Europe and China.

Pfizer’s nutrition business includes infant formulas such as SMA and Promil. The infant nutrition formula business was acquired by Pfizer as a result of its 2009 acquisition of Wyeth.

Pfizer can now focus on its core biopharmaceuticals business, and has a hefty war chest should it wish to go on the acquisition trail.

Some analysts have already mooted the possibility of a bid for Bristol-Myers Squibb or the Abbott Pharma spin-off.

Steve Poile

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Merck is paying Endocyte $120 million upfront and milestone payments of up to $880 million based on successful achievement of development, regulatory and commercialization goals in a total of six cancer indications.

if vintafolide receives regulatory approval, Endocyte will receive an equal share of the profit in the United States (U.S.) as well as a double digit percentage royalty on sales of the product in the rest of the world.

Endocyte has retained the right to co-promote vintafolide with Merck in the U.S. and Merck has the exclusive right to promote vintafolide in the rest of world.

Vintafolide is currently being evaluated in a Phase III clinical trial for platinum-resistant ovarian cancer, (PROCEED trial) and a Phase II trial for non-small cell lung cancer (NSCLC); both studies are also using Endocyte’s investigational companion diagnostic agent, etarfolatide (EC20).

The deal comes as a bit of a surprise after vintafolide provided inconclusive data in a phase IIb study as recently as December 2011. At the time, Endocyte’s shares bombed on the news, plummeting 65 percent after the drug appeared to be no better than the comparitor.

Despite this drawback, it seems Merck had already seen enough to give it the confidence to proceed with the deal. Perhaps the devil is in the detail and Merck has seen sufficient to allow it to ignore the indifferent data.

Steve Poile

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Prior to the announcement, Endocytes shares had declined steadily over the past 12 months by 60 percent, so this deal has prompted quite a turnaround in investor sentiment.

The deal gives Merck global rights to vintofolide, which is currently in phase III clinicals for ovarian cancer and phase II for non smal cell lung cancer.

Merck has paid Endocyte $120 million upfront with $880 million due in milestones based on regulatory approval and sales thresholds.

The company’s intend to co-promote in the US sharing revenue equally, with Merck have exclusive rights for the rest of world in return for double digit royalties.

Merck also has rights to develop the drug further for additional cancer types.

“Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types,” said Peter S. Kim, executive vice president and president Merck Research Laboratories. “This agreement underscores our strategy of building a portfolio of oncology therapeutics that employ a companion diagnostic to facilitate selection of those patients most likely to respond to treatment.”

“Following a rigorous selection process we believe Merck represents the ideal strategic partner to achieve the full potential of vintafolide, accelerating our development in numerous cancers,” said Ron Ellis, Endocyte’s president and chief executive officer. “The agreement also positions us well to build our own commercial infrastructure for vintafolide in the U.S. and for etarfolatide worldwide.”

Etarfolatide is a folate-targeted molecular imaging agent that is being developed as a non-invasive method to identify tumors that over-express folate receptors. These tumors are the molecular target of Endocyte’s folate-targeted therapeutic compounds such as vintafolide. To date, etarfolatide has been administered to over 550 patients.

Steve Poile

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The deal gives Takeda access to URL’s Colcrys, a treatment for gout. It appears that this is the key asset of interest to Takeda.

“This acquisition expands Takeda’s gout treatment portfolio and leverages our expertise in primary care,” said Douglas Cole, president, Takeda Pharmaceuticals U.S.A., Inc. “Gout affects more than eight million Americans, and the prevalence of gout is rising. We are pleased to have URL Pharma’s Colcrys added to our product portfolio and look forward to further realizing our goal of helping patients by providing multiple treatment options to manage the symptoms of acute and chronic gout in the U.S.”

Colcrys complements Takeda’s position in the gout marketplace with Uloric (febuxostat), used to lower blood uric acid levels in adults with gout.

The acquisition of URL Pharma strengthens Takeda’s offerings in the U.S. pharmaceutical market by providing patients with more gout management options to treat and prevent gout flares and the high uric acid levels associated with the condition.

Takeda has made a number of significant acquisitions in recent years, including Millennium Pharmaceuticals in 2008 for $8.8 billion and Nycomed in 2011 for $13.7 billion.

Japanese pharma have been busy making large acquisitions in order to obtain a stronger foothold in the North AMerican and European market. Whilst prices have been depressed in these markets, Japanese companies sit on large piles of cash and ar enow using it to buy up market presence.

I would anticipate we will see more Japanese activity in the North American and European markets in the months to come.

Steve Poile

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The review

The past week has seen an increase in the number of partnering deals, although most deals are of a low headline value.

Deals of note inlcude the $90 million partnership between Astellas and Optimer for fidaxomicin for Clostridium difficile in Japan.

Celtic Therapeutics Management is ploughing $50 million into the launch of a Switzerland-based firm, ADC Therapeutics, focused on developing antibody drug conjugates (ADCs). The new business will start out with a portfolio of 10 oncology ADC development programs.

Finally, Royalty Pharma has agreed to pay Sunesis up to $25 million in return for a slice of royalties from future global sales of the latter’s Phase III-stage acute myeloid leukemia (AML) candidate vosaroxin (formerly voreloxin).

M&A continues to be quiet. One deal of note is the acquisition of Ista Pharmaceuticals by Bausch and Lomb for $500 million, giving B&L access to Ista’s portfolio of analgesic, allergy and glaucoma products.

Financing activity has increased in the past week, with several significant deals of note. Merrimack has filed for an IPO, hoping to raise upwards of $1 billion, whilst Globus Medical are seekign a more modest $100 million.

A number of companies are approaching the market with debt financing issues, including Teva ($1.5 billion), Healthcare Trust of America ($875 million, and Vanguard Health Systems ($375 million).

In addition, Thrombogenics is seeking to raise $103.8 million through a private placement.

The numbers

Partnering deals: 84 (up on last week: 75)

M&A deals: 6 (down on last week: 9)

Financing deals: 26 (up on last week: 18)

Deals of note

1. Acquisition agreement for ISTA pharmaceuticals

Headline value: $500 million

Bausch & Lomb, Ista Pharmaceuticals – Pharmaceuticals

Bausch + Lomb and ISTA Pharmaceuticals have signed a definitive agreement under which Bausch + Lomb will acquire ISTA for $9.10 per share in cash, or a total of approximately $500 million.

The combination adds ISTA’s portfolio of industry-proven non-steroidal, anti-inflammatory, allergy, glaucoma and spreading agents to Bausch + Lomb’s robust, complementary portfolio of existing Rx ophthalmology and OTC eye health products.

2. Collaboration, licensing and marketing agreement for fidaxomicin for Clostridium difficile

Headline value: $90 million

Astellas, Optimer Pharmaceuticals – Bigpharma, Pharmaceutical – Infectives > Bacterial infection

Optimer Pharmaceuticals and Astellas Pharma announced the execution of an exclusive collaboration and license agreement to develop and commercialize fidaxomicin tablets in Japan for the treatment of Clostridium difficile Infection.   In return for the exclusive license to fidaxomicin in Japan, Optimer is entitled to receive a one-time, up-front cash payment of U.S. $20 million from Astellas.

Optimer is also eligible to receive additional cash payments of up to U.S. $70 million upon the achievement of certain regulatory and commercial milestones.

Optimer is further entitled to receive payments from Astellas that provide a return resulting in a double digit percent of Astellas net sales in the territory.   Astellas is responsible for all future costs associated with the development and commercialization of fidaxomicin in Japan.

3. Spin out and development agreement for antibody-drug conjugates

Headline value: $50 million

Spirogen, Celtic Therapeutics, ADC Therapeutics – Pharmaceutical, Biotech – Oncology

Celtic Therapeutics Management is ploughing $50 million into the launch of a Switzerland-based firm, ADC Therapeutics, focused on developing antibody drug conjugates (ADCs).   The new business will start out with a portfolio of 10 oncology ADC development programs.

4. Proposed bond issue for $1.5 billion equity

Headline value: $1,500 million

Teva – Pharmaceuticals

Teva Pharmaceutical will raise $1.5 billion in euro and Swiss franc denominated bonds in Switzerland.

The company did not disclose the interest rate or maturity of the bonds.

5. IPO for $1.001 billion

Headline value: $1,001 million

Merrimack Pharmaceuticals

Merrimack Pharmaceuticals announced the pricing of its initial public offering of 14,300,000 shares of its common stock at $7.00 per share, before underwriting discounts and commissions.

All of the shares in the offering are being sold by Merrimack.

The underwriters also have an option for a period of 30 days to purchase up to 2,145,000 additional shares of common stock from Merrimack to cover over-allotments, if any.

Dealtalk

In addition to deal announced there is always gossip and speculation of potential deals – here is just some of the Dealtalk from the last seven days.

Rumours circle of mega mergers

Amylin shares rocket up on report of $3.5 billion buyout offer by Bristol-Myers Squibb

Steve Poile

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Firstly, rumours persist that Amylin has recently rejected am unsolicited $3.5 billion bid from Bristol-Myers Squibb.

As a consquence shares in Amylin have rocketed as investors speculate that competitive bids may come in from AstraZeneca or Sanofi.

Of course, this is pure speculation and these traders may end up having their fingers burnt. None the less, Amylin’s share price surged 54 percent yesterday to $23.77, with offers as high as $30 a share seen as possible for Amylin should either BMS return to the table for a formal offer or others look to complete.

Piper Jaffray has even suggested that Amylin could be worth as much $37 a share in a climate where bigpharma patents are coming to an end and pipelines are looking bare.

Amylin is an attractive takeover candidate, with a strong pipeline including three candidates for treating diabetes already on the market.

Amylin has decided not to respond to comment on whether it is looking to sell itself or has been approached by potential buyers.

Secondly, it is rumoured that Watson is in advanced discussions with Actavis in an aquisition worth up to $6 billion.

People familiar with the matter said the deal was likely to happen after Easter, although it was possible it might happen earlier.

The money would be welcomed by Deutche Bank, as it would allow recover of money loaned to Icelandic billionaire Bjorgolfur Thor Bjorgolfsson to acquire the company in 2007.

It is also rumoured that Mylan made an approach to Actavis but did not follow this up with a bid.

Both Watson and Mylan have declined to comment.

The deal would represent a new phase in pharma M&A as generic companies seek to increase global presence through M&A to ensure strong market presence as well as benefit from economies of scale and associated infrastructure cost savings.

Actavis is a good fit with Watson as the company is seeking to expand into central and eastern Europe, both areas where Actavis has a strong presence.

Watson has made large acquisitions in the past, most notably acquiring Arrow Group for $1.75 billion in 2009, and Andrx for $1.9 billion in 2006. The acquisition of Actavis would be far larger and more complex however.

Most recently, Watson expanded its European presence with the acquisition of Specifar for $562 million.

I feel that 2012 will be a big year for M&A as the industry both consolidates from the economic crisis and establishes foundations for the new biopharma market conditions going forward.

Steve Poile

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As a result, shares in Ista have climbed steeply, gaining 7.9 per cent in New York.

The terms of the deal incude B&L paying $9.10 a share in cash, 8.6 per cent higher than the previous closing price.

The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2012.   Bausch + Lomb’s acquisition of ISTA accelerates the company’s strategy to strengthen its pipeline and marketed products and capabilities.

The combination adds ISTA’s portfolio of industry-proven non-steroidal, anti-inflammatory, allergy, glaucoma and spreading agents to Bausch + Lomb’s robust, complementary portfolio of existing Rx ophthalmology and OTC eye health products.

The companies also have complementary development pipelines.

ISTA’s pipeline includes candidates in various stages of development to treat various ocular conditions including inflammation and pain, while Bausch + Lomb’s pipeline of pharmaceutical innovations include the first of a new class of ocular anti-inflammatory agents to come along in decades, and a promising approach to reducing intra-ocular pressure in patients with open-angle glaucoma or ocular hypertension.

“ISTA is an excellent strategic fit with Bausch + Lomb’s rapidly growing pharmaceutical business, and this combination represents an important step in Bausch + Lomb’s commitment to becoming the best global eye health company,” said Brent Saunders, president and chief executive officer, Bausch + Lomb.

“Because Bausch + Lomb already manufactures nearly all of ISTA’s current U.S. products, our companies have known each other well for many years. We share a strong overlapping customer base in the U.S., a commitment to serving our physicians and patients and a track record of developing meaningful medical advances in eye health. With this combination, we will significantly enhance our pharmaceutical pipeline, nearly doubling the number of mid- to late-stage innovations. We look forward to delivering the benefits of this combination to customers, patients, employees and partners of both companies.”

“Along with the rest of our Board of Directors, I am pleased that the tremendous assets ISTA’s people have created with our products and pipeline have been recognized by Bausch + Lomb, a global leader in eye health, and that we were able to finalize a transaction after a thorough process that delivers shareholders an important return on their investment in ISTA,” said Vicente Anido, Jr., Ph.D., President and Chief Executive Officer of ISTA Pharmaceuticals.

“Both companies have a significant commitment to serving the needs of the healthcare industry, eye care professionals and patients alike. ISTA’s portfolio of prescription eye and allergy products is a natural extension of Bausch + Lomb’s pharmaceutical business focus. Together, we create an impressive platform to commercialize new eye care and allergy products already under development.”

B&L are finaincing the deal with cash and a $350 million loan.

Steve Poile

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