The Health Care M&A Monthly: Biotech Sees Strong M&A Activity--

Nine Deals Announced In August Worth $21.0 Billion


The Biotech industry posted strong results in the M&A market during August. Nine deals were announced worth a combined total of $20.989 billion. The top three deals involved purchases of biotech concerns by large European pharmaceutical companies.
 
Last month’s issue reported that Sanofi-Aventis (NYSE: SNY) was preparing a bid for Genzyme Corp. (NASDAQ: GENZ). In late August, Sanofi finally pulled the trigger and offered $69.00 per share, or approximately $18.5 billion, in a “bear hug” letter to buy Genzyme. Genzyme demurred, with CEO Henri Termeer, insisting, “This [the company] is not a fixer-upper, this is a beachfront property.” The consensus emerging among analysts is that an offer of $77.00 to $78.00 per share would be taken seriously; however, as noted in our August issue, at those levels, the deal would not be financially attractive for SNY. But Sanofi is not Mr. Termeer’s only concern; activist shareholder Carl Icahn, who appointed a number of members to GENZ’s board, is eager to get a deal done. The details of such a transaction and its pricing are discussed at length in our August 2010 issue.

Roche Holding (VX: ROG) and Aileron Therapeutics are striking up a deal for Roche to use Aileron’s stabilized stapled peptides technology, a form of small protein, as a new way of targeting diseases. This deal gives Roche access to a delivery technology that makes it easier for a drug to penetrate a cell.  Aileron has a preclinical pipeline focusing on such therapeutic targets as cancer, infectious disease, metabolic disease and inflammatory disease. The transaction is worth approximately $1.1 billion. Roche will pay $25.0 million upfront and make up to $1.1 billion in additional payments if drug candidates are successfully developed against five targets.

Quark Pharma, a California biotech that develops RNAi drugs, is licensing its experimental drug, QPI-1002, to Novartis AG (NYSE: NVS) in a deal worth as much as $680.0 million. QPI-1002, which is in mid-stage trials, is indicated for the prevention of acute kidney injury during cardiovascular or transplant surgery. Under terms of the deal, NVS will pay $10.0 million upfront and up to $670.0 million in milestone payments. This is Quark’s second major partnership with a big pharma company; in 2006, it partnered with Pfizer on an eye drug.    Want to read more? Click here for a free trial and download the current issue today