Health Care Deal News: Spotlight on Biotechnology-February 2012

In January’s largest Biotechnology deal, Amgen, Inc. (NASDAQ: AMGN) is acquiring Micromet, Inc. (NASDAQ: MITI) for approximately $1.16 billion. Based in Rockville, Maryland, MITI discovers, develops and commercializes antibody-based therapeutics to treat cancer. On a trailing 12-month basis, the company generated revenue of $26.4 million and a net loss of $58.0 million. AMGN is offering to pay $11.00 per share, or $1.16 billion. This bid offers MITI shareholders a 33% premium to the stock’s prior-day price. With this transaction, AMGN enhances its pipeline by acquiring the compound blinatumomab, which is currently being tested against two blood cancers, acute lymphoblastic leukemia and non-Hodgkin’s lymphoma.

Celgene Corp. (NASDAQ: CELG), a biopharma focused on small molecule drugs for cancer and immunological diseases, has made a deal to acquire Avila Therapeutics for about $925.0 million. Based in Bedford, Massachusetts, Avila is focused on designing and developing covalent drugs for best-in-class outcomes; its Avilomics platform is focused on cancer, viral infection and autoimmune disease. Under terms of the deal, CELG is offering $350.0 million in cash; up to $195.0 million in milestone payments related to AVL-292; and up to $380.0 million in milestone payments related to candidates generated from the Avilomics platform. This purchase gives CELG a cancer and autoimmune disease drug candidate, AVL-292, in phase 1 testing. It also gives the buyer a proprietary drug development platform. Avila’s investors include Abingworth, Advent Venture Partners, Atlas Venture, Novartis Option Fund and Polaris Venture Partners.

The next few deals involve a variety of collaboration agreements to use a certain drug discovery platform or target a specific therapeutic area. Johnson & Johnson (NYSE: JNJ) is striking up an alliance with FORMA Therapeutics, based in Watertown, Massachusetts, to discover, develop and commercialize small molecule drug candidates that target tumor metabolism mechanisms. Under this license option agreement, FORMA could receive as much as $700.0 million in project funding and payments if certain milestones are reached. On JNJ’s end, Janssen Biotech, a part of Janssen Pharmaceutical Companies, is conducting the alliance. It is expected to enlarge Janssen’s pipeline of cancer drug candidates.

Roche Holding’s Genetech subsidiary and Xenon Pharmaceuticals, a biotech located in British Columbia, are entering into a strategic alliance to discover and develop compound and companion diagnostics for the potential treatment of pain. Under terms of the deal, Roche/Genentech will pay Xenon an undisclosed upfront payment and up to $646.0 million in various milestone payments. Royalties on sales of products arising from the collaboration are also covered in the terms. This agreement both broadens and deepens Genetech’s pipeline of novel medicines. Xenon focuses on small molecule therapies based on the genetic causes of select metabolic, neurological and cardiovascular diseases...Want to read more? Click here for a free trial to The Health Care M&A Monthly and download the current issue today