Market Place
BMS-Celgene mega-merger gets shareholder nod; 10 people die in another industrial accident in China
This week, Phispers brings you an update on the US$ 74 billion BMS-Celgene mega-merger, which was facing investor opposition.
The shareholders of BMS have approved the takeover of Celgene. French drugmaker Sanofi announced an innovative model to make insulin affordable for Americans by selling monthly supplies for US$ 99.
Catalent agreed to buy privately held gene-therapy player Paragon Bioservices for US$ 1.2 billion. Indian drug major Dr Reddy’s announced it has acquired a portfolio of 42 ANDAs in the US.
And China saw yet another industrial accident wherein 10 people died of suffocation in a drug plant in Jinan, forcing the government to rethink safety regulations.
BMS, Celgene mega-merger gets
shareholder approval, despite investor dissent
Last month, there was news that the US$ 74-billion mega-merger of Bristol-Myers Squibb Company (BMS) and Celgene Corporation may get derailed due to investor opposition. The opposition of Starboard Value and Wellington Management to the merger had left investors baffled, as the takeover appeared to be in trouble.
However, last week BMS announced its shareholders have voted to approve the US$ 74 billion takeover of Celgene, despite a campaign by Starboard Value to scuttle the deal.
The company said more than 75 percent of the shareholders voted at the special meeting in favor of the Celgene merger agreement.
“We are pleased with the outcome of today’s Special Meeting and thank our shareholders for their support for this combination,” Giovanni Caforio, chairman and CEO of BMS, said.
BMS announced in early January that it planned to buy Celgene in a cash and stock transaction to bring together companies that specialize in oncology and cardiovascular drugs in what would be the largest pharmaceutical industry merger ever. But two large investors — Starboard and Wellington Management — had opposed the deal.
Chinese industry to see tough
safety norms as another fire takes place at drug firm
Just last month, PharmaCompass had reported a chemical blast in eastern Jiangsu province in China that had killed 78 and left hundreds injured. This week, China saw yet another incident wherein 10 people suffocated to death by smoke inhalation at a large Chinese pharmaceutical firm in Jinan city.
According to news agency Xinhua, sparks from a pipe being welded at Qilu Tianhe Huishi Pharmaceutical Company in eastern Shandong province caused a substance to catch fire, giving off smoke. Twelve rescue workers were hurt but were not in a life-threatening condition, it added. The accident is being investigated.
Qilu Tianhe had invested US$ 150 million (1 billion yuan) in its 280,000 square meter pharmaceutical plant situated in Jinan. The company exports medicines to Europe, North and South America, and the Middle East.
Deadly industrial accidents are common in China, where safety regulations are often poorly enforced. Prior to last month’s incident in Jiangsu, in November 2018, a gas leak at a plant in the northern city of Zhangjiakou (which was among the host locations for the 2022 Winter Olympics) had killed 24 people. In December 2018, a laboratory blast had taken place at Beijing University, killing three students. And in July 2018, a chemical plant in south-west Sichuan province had left 19 dead and 12 injured.
Meanwhile, the Chinese government at both the central and local levels is expected to introduce tough regulations that may lead to closure of many small plants and prompt consolidation within the industry.
According to news reports, authorities have moved swiftly in recent days to take remedial measures aimed at eliminating safety risks, including special safety inspections and the closure of some companies and even entire industrial parks.
This week, the State Administration for Market Regulation (SAMR) announced it would launch special rectification efforts for high-risk areas that may have systemic safety issues, including food packing and chemical products. The efforts will focus on improving accountability for safety loopholes and enhancing oversight and regulation of companies, according to the SAMR.
According to media reports, the Jiangsu provincial government plans to shut down as many as 30 industrial parks that house chemical plants and close thousands of companies. Jiangsu is one of the largest bases for chemical industries in China. In 2017, it had more than 5,400 such companies that generated more than 2 trillion yuan (US$ 297.64 billion) in revenue.
After Louisiana’s ‘Netflix model’, Sanofi announces US$ 99 plan for diabetics in US
Facing immense pressure from the Trump Administration and the US Congress to lower the price of drugs, companies are coming up with innovative models to make drugs affordable to Americans. The latest to join the bandwagon is French drugmaker Sanofi who announced it will sell monthly supplies of insulin for a fixed price of US$ 99 to patients paying with cash. At that price, Sanofi will offer up to 10 boxes of insulin pens and 10 mL vials per month regardless of a patient's income.
However, the company denies this is an attempt to appease the legislators. Sanofi said this is a part of the company’s Insulins Valyou Savings Program it had launched a year back. The drugmaker said it expanded the program after hearing stories of people rationing their insulin because they couldn’t afford it. Since its launch last year, the program has resulted in savings of around US$ 10 million. The program is available at US pharmacies.
“It is unacceptable to Sanofi that some people living with diabetes are struggling to pay for their insulin, so we have moved to act creatively and aggressively to help address affordability and access needs,” Michelle Carnahan, the head of North America primary care at Sanofi, said in a statement.
The Centers for Disease Control and Prevention estimates more than 30 million Americans have diabetes. The annual cost of insulin for people with type 1 diabetes in the US nearly doubled — from US$ 2,900 during 2012 to US$ 5,700 in 2016.
Sanofi isn’t the only one working on reducing insulin prices. In March, Eli Lilly announced plans to sell a half-price version of its blockbuster insulin medication Humalog.
Recently, Louisiana was in news for its new “Netflix” approach to buying hepatitis C drugs. Louisiana’s Departments of Health and Corrections had announced last month that Asegua Therapeutics, a generics subsidiary arm of Gilead Sciences, is partnering them for their “Netflix” subscription model for hepatitis C virus (HCV) treatment.
First announced in August 2018, under the Netflix model, instead of paying for each prescription individually, the state would pay a subscription fee to the drug company whereby the state would then receive unlimited access to the drug, similar to how consumers pay a monthly fee to stream unlimited television shows and movies.
Catalent makes US$ 1.2
billion bet on gene therapy manufacturer Paragon
The latest drugmaker to pursue a gene therapy company is Catalent Inc. According to a company statement, Catalent has agreed to buy privately held gene-therapy focused Paragon Bioservices Inc for US$ 1.2 billion.
Gene therapies use specially engineered viruses, or viral vectors, to deliver genetic material into defective cells, in hopes of improving or curing an inherited condition. The gene therapy market is expected to witness sustained growth of 25 percent in the medium term and Baltimore, Maryland-based Paragon is expected to outpace this market growth.
“Paragon brings to Catalent a complementary capability that will fundamentally enhance our biologics business and our end-to-end integrated biopharmaceutical solutions for customers,” John Chiminski, Catalent’s CEO said. Backed by private-equity firms Camden Partners and NewSpring Capital, Paragon is expected to record more than US$ 200 million in revenue this year.
Drug companies have been moving aggressively into gene therapy, where treatments for rare, inherited diseases command some of the highest prices in medicine.
Just last month, Thermo Fisher had unveiled a US$ 1.7 billion deal to buy Brammer Bio — a company that does contract viral vector manufacturing for cell and gene therapy developers.
Swiss drugmaker Roche agreed to buy gene therapy specialist Spark Therapeutics Inc for US$ 4.3 billion in February, while Novartis purchased Avexis for US$ 8.7 billion last year.
Dr Reddy’s purchases 42 ANDAs in US to augment injectables portfolio
Indian drug major Dr Reddy’s Laboratories announced it has acquired a portfolio of 42 abbreviated new drug applications (ANDAs) in the US.
The portfolio includes more than 30 generic injectable products. These products will require a technology transfer and can be launched within the next one to two years. The total addressable market for these products in the US is approximately US$ 645 million for the calendar year ending in December 2018.
“The acquisition is in line with our stated strategy to significantly enhance our portfolio in our chosen growth markets,” Dr Reddy’s CEO Erez Israeli said in a statement.
“This transaction will help augment our injectables product portfolio in the US market and globally,” he added.
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