Insight journal - Deals and alliances

Dealmakers weekly review – March 19 2012 – GSK, Alcon, Thrombogenics, Omega Pharma, Shire, Ferrokin, Asahi Kasei, Zoll Medical

Posted on 20 March 2012

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Deal making on the up in the past week, with major deals announced by GSK, Alcon, Shire and Asahi Kasei.

The review

Last week I mentioned that there seems to be a trend emerging in recent acquisition deals, where the terms look remarkably like a partnering deal. Well last week there was yet another such deal, this time with Shire acquiring Ferrokin Biosciences in a deal valued as $325 million, with $100 million upfront and the remainder payable upon the successful development and commercialisation of Ferrokin's iron chelator FBS0701.

It is an interesting trend to watch during 2012 - companies may be worth less than their parts.

The other M&A of note during the week was the acquisition of Zoll Medical by Japan's Asahi Kasei for $2.21 billion. This represents the latest in a series of major deals announced in recent months by Japanese companies. The Japanese are taking advantage of the depressed prices of western companies in order to build their global businesses and therefore reach into lucrative markets for the future.

Our Partnering Scorecard registered a new entrant and an almost there deal in the past week. The new entrant was the asset purchase by Omega Pharma of a portfolio of European OTC brands from GSK for $615 million. Brands included Lactacyd, Abtei, Solpadeine, Zantac, Nytol and Beconase and generated sales of over EUR 200 million in 2011.

The 'almost there' deal was Alcon's licensing of ocirplasmin from Thrombogenics for marketing in all markets except the US. The headline value of the deal is $493.2 million, just under our threshold of $500 million for inclusion in our scorecards.

In other deal news, Merck & Co provided $90 million in funding for the establishment of the California Institute of Biomedical Research in return for an option of future research outcomes.

Biogen Idec has partnered with MAKScientific for the development of novel MS drug candidates and has an option to license in the future.

Valeant has acquired an asset portfolio of products from Gerot Lannach for $20 million. The majority of sales for these products is in Russia and other CIS countries.

Finally, company financing has been more buoyant in the last few weeks.

Of note include Salix's successful raise of $690 million in a senior notes financing, Oncogenex raised $50 million in a public offering, ViewRay raised $45 million in a series C financing, and Aastrom Biosciences raised $40 million in a series B.

The numbers

Partnering deals: 68 (up on last week: 51)

M&A deals: 8 (same as last week: 8)

Financing deals: 17 (down on last week: 24)

Deals of note

1. Licensing and marketing agreement for Ocirplasmin

Headline value: $493.2 million

Alcon, Thrombogenics - Pharma - Ophthalmics

Alcon is paying ThromboGenics €75 million to take over commercialization of ocriplasmin in all markets outside the U.S.

ThromboGenics has completed a clinical development program that included two successful Phase III studies that have shown that ocriplasmin could play an important role in treating symptomatic vitreomacular adhesion (VMA) including macular hole.   Thrombogenics is also entitled to a €90 million in near-term milestone payments, future milestones of €210 million, and royalties.

2. Asset purchase and licensing agreement for portfolio of European OTC brands

Headline value: $615 million

GSK, Omega Pharma - Bigpharma, Pharma, Consumer products

Omega Pharma has reached agreement to acquire the previously identified non-core OTC brands of GlaxoSmithKline (GSK) in Europe for EUR 470 million in cash.

This transaction builds on the recently announced divestment by GSK of certain non-core OTC brands in the USA and Canada, the majority of which was completed at the end of January 2012.   The brands being acquired include Lactacyd, Abtei, Solpadeine, Zantac, Nytol and Beconase and generated sales of over EUR 200 million in 2011.

3. Acquisition agreement for Ferrokin Biosciences

Headline value: $325 million

Shire - Ferrokin Biosciences

Shire announces that it has signed an agreement to acquire FerroKin BioSciences for an upfront payment of $100 million, payable in cash at closing, plus potential post-closing milestone payments of up to $225 million, depending upon the achievement of certain clinical development, regulatory and net sales targets.

4. Acquisition agreement for Zoll Medical

Headline value: $2,210 million

Asahi Kasei, Zoll Medical

Asahi Kasei and ZOLL Medical jointly announced that Asahi Kasei, Japan’s leading diversified chemical manufacturer with businesses in the health care, chemicals & fibers, homes & construction materials, and electronics sectors, has entered into a definitive merger agreement with ZOLL, a manufacturer of resuscitation and critical care devices and related software solutions, pursuant to which Asahi Kasei will acquire ZOLL for approximately $2.21 billion.

5. Senior notes financing for $690 million

Headline value: $690 million

Salix Pharmaceuticals

Salix Pharmaceuticals announced the closing of its offering of $690 million aggregate principal amount of 1.5% convertible senior notes due 2019, which includes the exercise in full of the initial purchasers’ overallotment option.

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.

German drug firm Stada’s failed Russian forays

ICAN and AIDS Healthcare Foundation in merger talks

Pfizer narrows its focus to 5 research areas, set to dominate with takeovers

Boehringer eyes Pfizer’s animal health business

Steve Poile

 

Related links:

Partnering Scorecard 2012

M&A Scorecard 2012

Financing Scorecard 2012

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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