Insight journal - Deals and alliances

Dealmakers weekly review – June 12 2012 – Merck & Co, Tesaro, Novartis, Genmab, Baxter, Chatham Therapeutics

Posted on 12 June 2012

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Dealmaking very active at the start of June with seventy new partnering deals, twelve new M&A deals, and twenty-one financings.

The review

Last week was a jubilee week in the United Kingdom, with our Queen celebrating 60 years on the throne, so it was a short working week here.

However, the rest of the world continued at a pace with seventy partnering deals announced.

The lead deal of the week was Merch & Co out-licensing its Niraparib to Tesaro in a deal with a headline value of $181 million.

In other deals of note, Novartis entered a collaboration agreement with Genmab for bispecific antibodies for DuoBody, Orexo and ProStrakan entered a licensing agreement for Abstral, and Baxter entered a collaboration agreement with Chatham Therapeutics for factor XI hemophilia B gene therapy treatment.

The lead M&A of the week was the acquisition of Medtox Scientific by LabCorp for $241 million, in a week where twelve M&A deals were announced.

Finally, the past week has been very active on the financing front with twenty-one deals announced.

The lead deal was the TriVascular's series D financing for $60 million.

The numbers

Partnering deals: 70 (up on last week: 59)

M&A deals: 12 (up on last week: 4)

Financing deals: 21 (up on last week: 18)

Deals of note

1. Licensing agreement for Niraparib for breast and ovarian cancer

Headline value: $181 million

Merck & Co, Tesaro

Bigpharma, pharmaceuticals - Oncology > breast, ovarian - Preclinical

Entered into a license agreement with Merck Sharp & Dohme under which we obtained exclusive, worldwide rights to certain patents and non-exclusive rights to certain Merck know-how, to research, develop, manufacture, market and sell niraparib and a backup compound, MK-2512, for all therapeutic and prophylactic uses in humans.

We are not currently advancing MK-2512.

Under the Merck license, we are obligated to use diligent efforts to develop and commercialize a licensed product.

Under the terms of the license agreement, we are required to make an up-front payment to Merck of $7 million in June 2012.

We are also required to make milestone payments to Merck of up to $57 million in development and regulatory milestones for the first indication, up to $29.5 million in development and regulatory milestones for each successive indication, and up to $87.5 million in one-time sales milestones based on the achievement of annual sales objectives.

If commercial sales of niraparib commence, we will pay Merck tiered royalties at percentage rates in the low teens based on worldwide annual net sales.

The license with Merck will remain in effect until the expiration of the royalty term in such country, unless terminated earlier by the mutual agreement of the parties or due to the material breach or bankruptcy of a party.

In addition, beginning upon completion of the first Phase 2 clinical trial of a licensed product candidate, we may terminate the license without cause by giving 180 days written notice.

2. Collaboration agreement for bispecific antibodies for DuoBody

Headline value: $175 million

Novartis, Genmab

Bigpharma, biotech

Novartis is paying Genmab $2 million up front as part of a collaboration to develop bispecific antibodies based on the latter’s DuoBody technology against two disease target combinations selected by Novartis.   Under terms of the deal Genmab will develop panels of bispecific antibodies, and Novartis will be responsible for fully funding all research work.

If all milestones are met Genmab could earn about $175 million through the partnership, excluding research funding and royalties.

3. Acquisition agreement for Medtox Scientific

Headline value: $241 million

Labcorp, Medtox Scientific

Diagnostics, Services

Laboratory Corporation of America Holdings and MEDTOX Scientific entered into a definitive merger agreement under which LabCorp would acquire MEDTOX for a purchase price of $27.00 per share in cash, representing a total enterprise value of approximately $241,000,000.

The board of directors of MEDTOX unanimously approved the agreement and recommended approval of the transaction by MEDTOX's shareholders.   The transaction is subject to customary closing conditions including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval by MEDTOX's stockholders.

The transaction is expected to close in the third quarter of 2012.

4. Series D financing for $60 million

Headline value: $60 million

TriCascular, Kaiser Permanente, Redmile Group

TriVascular announced a $60 million Series D Preferred Stock equity financing commitment; the initial tranche of which closed on June 1st.    New investor Kaiser Permanente Ventures, in partnership with the Redmile Group, led the round joining existing investors New Enterprise Associates, Delphi Ventures, MPM Capital, Kearny Venture Partners and Pinnacle Ventures.

Sam Brasch, Director at Kaiser Permanente Ventures, will join TriVascular’s Board of Directors.   Proceeds from the financing will be used to pursue U.S. PMA approval of the Ovation Abdominal Stent Graft System, drive further sales expansion internationally, fuel product development efforts and initiate U.S. commercial activity.

5. Series C financing for $40.4 million

Headline value: $40.4 million

Astute Medical, De Novo Ventures, Delphi Ventures, Domain Associates, Johnson & Johnson Development Corporation, Kaiser Permanente

Astute Medical announced the completion of a $40.4 million Series C financing led by MPM Capital and including new investor Kaiser Permanente Ventures.

The Company intends to use the proceeds to begin commercializing its first product, as well as to advance and expand its research, development and validation of biomarker-based laboratory tests.   Additional participants in the financing included existing stockholders De Novo Ventures, Delphi Ventures, Domain Associates and Johnson & Johnson Development Corporation.

Purchase a subscription to Current Agreements to view all last weeks deals.


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.

Biotech all stars buy castoff experimental Merck cancer drug

Merck looks to startups

Pfizer provides update on animal health strategic alternatives review process

Eli Lilly CEO says no big deals

Amylin said to draw $29-a-share offers in initial bidding

Biomet considers spinning out dental division

Abbott fills out leadership team for pharma spinoff AbbVie

CurrentAgreements Deals Update: June 2012

Steve Poile


Related links:

Scorecard deal metrics for Jan-May 2012 now available

Scorecard bigpharma partnering metrics Jan-May 2012 now available

Partnering Scorecard 2012

M&A Scorecard 2012

Financing Scorecard 2012

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

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