Health Care Deal News: Spotlight on Pharmaceuticals- March 2012

With big pharma concentrating on Biotechnology this month, February saw no grand gestures in the Pharmaceutical M&A market. Impax Laboratories (NASDAQ: IPXL) acquired the U.S. rights to AstraZeneca’s (NYSE: AZN) migraine headache drug, Zomig. It is sold as a tablet, disintegrating tablet and a nasal spray. Impax paid $130.0 million outright for these rights, which works out to 0.8x 2011 U.S. sales of the drug. It will also pay AZN royalties on sales going forward. This deal grants IPXL the rights to market Zomig and to develop new products based on the drug that will carry the Zomig name. This enlarges the buyer’s portfolio of generic drugs.

Acorda Therapeutics (NASDAQ: ACOR), a biopharma, is acquiring Neuronix for $35.0 million in upfront and milestone payments. Neuronix is a pharmaceutical company that is developing a nasal spray formulation of the epilepsy drug diazepam. This acquisition gives the buyer a potential neurology drug. Neuronix raised $1.5 million in a first round of funding in 2010.

Watson Pharmaceuticals (NYSE: WPI) has set aside approximately $6.0 billion to acquire brand-name drugs with the potential for greater growth and more consistent returns than its core generic drugs.

Rottapharm/Madaus, a family-owned generic drug maker based in Italy, is seeking to sell a stake in the company estimated at €2.0 billion to outside partners. The company’s first choice would be a private equity investor, who would let the family maintain operational control over the company while preparing it to go public. However, news of this plan also reached strategic buyers.  One Italian newspaper indicated that Mylan (NYSE: MYL) might be interested in an outright acquisition.

Bayer AG (DE: BAYG) has not announced a definitive large acquisition yet, but has been noticed making the rounds of several European banks to sound out its debt financing options should it find something it wanted to buy. One possible target would be Pfizer’s (NYSE: PFE) animal health unit, valued at between $15.0 billion and $20.0 billion. Naturally, other buyers such as Novartis (NYSE: NVS) are also interested. But due to a potential tax bill of $5.0 billion which could result from a sale of the unit, PFE currently seems more inclined to spin off the unit....Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today