Health Care Deal News: Spotlight on Biotechnology- April 2012

In March’s largest biotech deal, the Belgian firm ThromboGenics NV (Euronext: THR) is entering into an agreement with Novartis AG (NYSE: NVS) for the commercialization of ocriplasmin outside of the United States. This product candidate is indicated for the treatment of symptomatic VMA. Under terms of the deal, NVS will pay as much as €375.0 million ($496.2 million) consisting of €75.0 million upfront, up to €90.0 million in near-term milestone payments and additional milestone payments of up to €210.0 million. Royalties on net sales are also covered in the agreement. This deal, being carried out by NVS eye care subsidiary Alcon, frees ThromboGenics to concentrate its efforts on the upcoming launch of ocriplasmin in the United States.

In an outright acquisition, Shire plc (NASDAQ: SHPGY) is paying as much as $325.0 million to purchase FerroKin BioSciences, a San Francisco-based biotech that is developing a once-a-day oral iron chelator, FBS0701, to treat iron overload following blood transfusions. Under terms of the deal, Shire will pay $100.0 million in cash upfront and up to $225.0 million in clinical, regulatory and sales milestones. This acquisition builds up Shire’s hematology business, adding a new product candidate that is now in phase 2 trials. The candidate’s once-a-day formulation should provide it with competitive advantages over competing products currently on the market. Seaview Securities provided FerroKin BioSciences with financial advice on this transaction.

England’s Abcam plc (AIM: ABC), a biotech developing high quality protein research tools, is acquiring Epitomics, a San Francisco-based firm that has developed humanized rabbit monoclonal antibodies for research and diagnostic purposes. ABC is paying approximately $155.0 million in cash and stock for this purchase. To finance this deal, ABC has put in place a new $31.7 million credit facility and issued 14.5 million new shares. This deal, which is valued at 6.3x revenue, expands the buyer’s technology capabilities in the area of antibody technologies and is expected to be accretive to earnings in 2013.

Boston-based MAKScientific, LLC is entering into an option and collaboration agreement with Biogen Idec (NASDAQ: BIIB) to develop and commercialize drug candidates for the treatment of multiple sclerosis and other neurodegenerative diseases. This collaboration brings MAKScientific’s expertise in therapeutics based on modulating cannabionid pathways to the development of drug candidates for MS and similar diseases. Under the terms of this modest deal, BIIB will pay $3.0 million in an upfront cash payment and up to $31.0 million in milestone payments. Royalties on net sales of products from this collaboration are also envisioned in the agreement.

NicOx SA (Paris: COX) has entered into an agreement to acquire 11.8% of the shares of Altacor, a company based in Cambridge, England and focused on the ophthalmology market. Altacor markets prescription and OTC products for the treatment of dry eye, and has a diversified late-stage pipeline including antiseptics and devices for intraocular lenses. Under terms of the deal, NicOx will pay £2.0 million ($3.2 million) for the initial stake in Altacor. In addition, NicOx received an exclusive call option to acquire the remaining shares of the company for an additional £9.0 million ($14.3 million), to be paid in cash, shares or a combination of both. The option may be exercised by NicOx up until May 31, 2012. And if stipulated milestones are met, the consideration will be increased by £8.5 million ($13.5 million)........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today