Partnering gains momentum whilst M&A slows significantly.
The past week has seen a significant number of partnering deals, with the leading deals by value led by bigpharma.
Merck and Endocyte signed a development and marketing agreement for vintafolide valued at $1 billion. GSK disposed of a number of OTC brands in a $263 million deal with Aspen Pharmacare. GSK also entered a collaborative R&D pact with FivePrime Therapeutics for utilization of a drug discovery platform to discover respiratory compounds. Finally, Lilly entered a development and licensing deals with Vanda for a neurokine 1 receptor antagonist for the treatment of a number of indications, in a deal valued at $100 million.
On the M&A front, it has been very quiet. The only potential deal of significance is the rejected $2.6 billion offer to acquire Human Genome Sciences by GSK. The bid has however prompted Human Genome Sciences to put itself up for sale.
Financing activity has been fairly stready, with the lead deals by value being Ventus Medical's public offering for $40 million, Alder Biopharmaceutical's series D financing for $38 million.
Partnering deals: 61 (up on last week: 52)
M&A deals: 2 (down on last week: 10)
Financing deals: 14 (same as last week: 14)
Deals of note
1. Development and marketing agreement for Vintafolide
Headline value: $1,000 million
Merck, Endocyte - Bigpharma, pharmaceutical - Metabolic, oncology
Merck have entered into an agreement to develop and commercialize Endocyte's novel investigational therapeutic candidate vintafolide (EC145). 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).
Under the agreement, Merck, through a subsidiary, will gain worldwide rights to develop and commercialize vintafolide.
Endocyte will receive a $120 million upfront payment and is eligible for milestone payments of up to $880 million based on the successful achievement of development, regulatory and commercialization goals for vintafolide for a total of six cancer indications.
In addition, 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.
2. Asset purchase and licensing agreement for OTC drug brands
Headline value: $263 million
GlaxoSmithKline, Aspen Pharmacare - Consumer health
GlaxoSmithKline has agreed to sell a clutch of international over-the-counter healthcare brands for 164 million pounds ($263 million) to South Africa's Aspen Pharmacare. Net cash proceeds from the transaction are expected to be approximately 135 million pounds and will be returned to shareholders during 2012.
3. Acquisition agreement for Human Genome Sciences (rejected)
Headline value: $2,600 million
GlaxoSmithKline, Human Genome Sciences - Bigpharma, biotech
Human Genome Sciences has received an unsolicited proposal from GlaxoSmithKline to acquire HGS for $13.00 per share in cash. The HGS Board of Directors, in consultation with independent financial and legal advisors, has carefully reviewed and considered the GSK offer and has determined that the offer does not reflect the value inherent in HGS.
HGS also announced that its Board of Directors has authorized the exploration of strategic alternatives in the best interests of shareholders, including, but not limited to, a potential sale of the Company.
4. Public offering of common stock for $40 million
Headline value: $40 million
Ventus Medical, De Novo Ventures, Mohr Davidow Ventures
Ventus Medical has lodged a prospectus to raise $40 million and list on the Australian Securities Exchange. The US-based medical device company claims its "proven" product can treat sufferers of sleep apnea, a sleeping disorder. Ventus is asking investors for $3 a share, with expectations the company will list on the ASX by the end of next month.
Two main shareholders from the US, De Novo Ventures II and Mohr Davidow Ventures, said they intended to take up $US6.2m ($6m) worth of shares.
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.
View all deals of the past week at Current Agreements (subscription required)
Subscribe to Current Agreements for access to every deal announced in the life sciences since 2000.