Insight journal - Deals and alliances

Dealmakers weekly review – February 6 2012 – Merck KgaA, Threshold, Bill and Melinda Gates Foundation, AstraZenenca, Actavis

Posted on 07 February 2012

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The week was relatively quiet until the end of week announcement by Merck KGaA of a $550 million partnership with Threshold for the co-development and commercialization of TH-302, a promising treatment for pancreatic cancer. The deal provides Threshold with $25 million upfront, plus $55 million in near term milestones, allowing the company to expand research into additional cancer targets.

The review

The week was fairly busy on the partnering front with 63 deals announced. The primary deals are summarised below.

Other deals of interest include AstraZeneca's licensing agreement with Impax for access to Zomiq in the US, Actavis joint venture with Bioton for the development and commercialization of insulin products in Asia, US and Europe, and Shire's collaboration with Sangamo for the development and commercialization of hemophilia therapeutics.

The week was particularly slow on the M&A front, with only five deals announced companred to an average of 15 for previous weeks. This probably represents a collective pause for breath after the flurry of activity before and after year end.

To date, no further news has been forthcoming on Roche's hostile bid for Illumina. As more details emerge, we will be reporting here.

Full details of every deal in the last week can be accessed at Current Agreemnts (subscription required).

The numbers

Partnering deals: 63 (up on last week: 51)

M&A deals: 5 (down on last week: 15)

Financing deals: 17 (down on last week: 19)

Deals of note

1. Co-development and co-marketing agreement for TH-302

Merck KgaA - Threshold Pharmaceuticals

$550 million - Pharmaceutical

Threshold Pharmaceuticals announced that a global agreement was signed with Merck KGaA to co-develop and commercialize TH-302, Threshold's small molecule hypoxia-targeted drug.

TH-302 is currently being investigated in a global Phase 3 clinical trial in patients with soft tissue sarcoma, a randomized Phase 2 trial in patients with advanced pancreatic cancer from which top-line results are expected in February, as well as additional clinical studies in other solid tumors and hematological malignancies.

Under the terms of the agreement, Merck will receive co-development rights, exclusive global commercialization rights and will provide Threshold an option to co-commercialize the therapeutic in the United States.

2. Acquisition agreement for Drug Trading Company

$920 million - Service

Drug Trading Company - McKesson - Katz Group

McKesson Corporation announced that it has signed a definitive agreement to purchase Drug Trading Company Limited the independent banner business of Katz Group.

Katz Group is a privately-owned company that operates an integrated retail pharmacy network in Canada.

The acquisition demonstrates McKesson’s long-standing commitment to the health of the independent pharmacy segment in the Canadian market.

3. Series E financing for $89 million

$89 million - Medical device

ConforMIS - AGC Equity Partners - Axel Johnson - Government Investment Fund Asia - Government Investment Fund UAE

ConforMIS announced that it has raised $89 million in a Series E round of funding, with additional funds beyond this amount committed upon meeting certain milestones.

The company, which more than doubled its revenues in 2011, will use the funds to support ongoing sales and marketing expansion, R&D investment into new product lines, and build out of manufacturing infrastructure.

4. Collaboration agreement to fight neglected diseases

$785 million - Bigphama, Non-profit

Bill and Melinda Gates Foundation - GlaxoSmithKline - Sanofi - Eisai - Bayer - Gilead Sciences - Johnson & Johnson - MSD Biologics - Merck KGaA - Novartis - Pfizer - Abbott Laboratories - Bristol-Myers Squibb - AstraZeneca

13 pharmaceutical companies, the U.S., U.K. and U.A.E governments, the Bill & Melinda Gates Foundation, the World Bank and other global health organisations announced a new, coordinated push to accelerate progress toward eliminating or controlling 10 neglected tropical diseases (NTDs) by the end of the decade.

Uniting efforts with NTD-endemic countries, partners pledged to bring a unique focus to defeating these diseases and to work together to improve the lives of the 1.4 billion people worldwide affected by NTDs, most of whom are among the world's poorest.


Alongside partnering and M&A announcements, there is a slew of rumours
and discussions about who might be partnering with whom – here is a selection of
the stories from the past week:

Cardinal Health plans $90 million in China acquisitions

WuXi PharmaTech and ShangPharma are M&A targets: Bloomberg

Glaxo, Lilly, Pfizer said to eye stake in Turkey’s MN Pharma

GlaxoSmithKline Seeking Acquisition in Turkey, Hurriyet Reports

Teva eyes $2b Indian acquisition

Top M&A 2011:over $130 billion bet on life sciences consolidation

Why Biogen Idec Got Out of the Corporate VC Business

Steve Poile


Related links:

Further details of the key deals:

Threshold Pharmaceuticals and Merck KGaA announce global agreement to co-develop and commercialize phase 3 hypoxia-targeted drug TH-302

Impax Pharmaceuticals licenses exclusive US commercialization rights to Zomig from AstraZeneca

Joint venture agreement for the development and registration of insulins

View all deals of the past week at Current Agreements (subscription required)

Subscribe to Current Agreements for access to every deal since 2000.

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