In our continuous endeavor to share business intelligence that can help grow your pharmaceutical business, PharmaCompass had introduced PharmaFlow last month — a monthly roundup of deals and investments
from across the globe.
By
tracking investments and M&As in the global pharmaceutical
industry, we hope to provide our readers with an insight into the breakthrough
technologies and business trends of the future.
In
September, Teva continued to divest in order to reduce
its US$ 35 billion debt burden incurred last year due to the acquisition of the
generics division of Allergan. Meanwhile, the world of pharmaceuticals
saw deals in the medical devices space, and the Chinese drug industry continued
to expand its global footprint.
Click here to view the major deals in September 2017 (Excel
version available) for FREE!
Teva’s disinvestments lead the deals in September
Debt-laden Teva Pharmaceuticals, the world’s leading generic drug manufacturer, continued to look for divestiture opportunities and sealed three separate divestments that together fetched US$ 2.48 billion. The Israeli drugmaker, which also got a new CEO (Kåre Schultz) last month, announced it would use the proceeds to repay its term loan debt.
Capital Partners Fund VI acquired a portfolio of products from Teva’s global women’s health business, spanning contraception, fertility, menopause and osteoporosis for US$ 703 million in cash. The portfolio of products, marketed and sold outside of the US, includes brands such as Ovaleap, Zoely,
Seasonique,
Colpotrophine
and Actonel.
Combined annual net sales of these and other products within this portfolio for
2016 were US$ 258 million.
Teva has also entered into an agreement under which Foundation Consumer Healthcare will acquire Plan B One-Step and Teva’s value brands of emergency contraception (Take Action, Aftera, and Next Choice One Dose) for US$ 675 million in cash. Combined annual net sales of Plan B One-Step, Take Action, Aftera, and Next Choice One Dose were US$ 140 million in 2016.
Click here to view the major deals in September 2017 (Excel
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Teva also entered into a definitive agreement with CooperSurgical, under which the latter will acquire Paragard (intrauterine copper contraceptive), a product within its global women’s health business, for US$ 1.1 billion cash. Paragard posted revenues of approximately US$ 168 million for the trailing 12 month period ending June 30, 2017. This transaction also includes the sale of Teva’s manufacturing facility in Buffalo, New York, which produces Paragard exclusively.
M&As in the next generation medical
devices space
NeoTract acquires Teleflex: September also saw the acquisition of NeoTract by Teleflex Incorporated. NeoTract is a privately-held medical device company that has developed and commercialized the US FDA-cleared UroLift System — a novel, minimally invasive technology for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. Performed primarily through a transurethral outpatient procedure, the UroLift System delivers permanent implants that hold open the urethra, reducing the prostate obstruction without cutting, heating, or removing prostate tissue. Teleflex saw significant potential in NeoTract’s technology and acquired the company in early September, in a transaction valued up to US$ 1.1 billion.
Click here to view the major deals in September 2017 (Excel
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Under the
terms of the agreement, Teleflex will acquire NeoTract for an upfront cash
payment of US$ 725 million, and will pay up to an additional US$ 375 million
upon the achievement of certain commercial milestones related to sales through
the end of 2020.
In 2016,
NeoTract reported 178 percent year-on-year growth as its revenues grew to US$
51 million compared to approximately US$ 18 million in 2015.
Shandong Weigao acquires Argon Medical
Devices: In another major medical device deal announced in September, China’s Shandong Weigao Group Medical Polymer agreed to buy closely held Argon Medical Devices for US$ 850 million. Argon, which posted revenues of US$ 225 million last year, makes devices including biopsy products, drainage catheters and systems that remove blood clots. Once the purchase is complete, Argon will become one of Shandong Weigao’s “core platforms” for overseas expansion.
Chinese companies carry
on with their global acquisition spree
Shandong Weigao isn’t alone as according to Bloomberg data, Chinese companies had announced
US$ 4.3 billion in US health-care deals until September, more than double the
US$ 1.9 billion in purchases for the same period in 2016.
Chinese deals in Canada, US: In January this year, Chinese conglomerate Sanpower Group had acquired Valeant Pharmaceuticals’ Dendreon cancer business for US$ 819.9 million. Dendreon makes the prostate cancer vaccine — Provenge.
In June this year, Chinese contraceptives maker Humanwell Healthcare Group agreed to
buy US-based RiteDose for about US$ 605 million by becoming a part of a joint stock company.
Fosun resurrects India deal: In September, Shanghai Fosun Pharmaceutical Group resurrected its deal to overcome concerns raised by the Indian
government, by scaling down the stake it proposed to purchase in Gland Pharma from 86 percent to 74 percent. Fosun now proposes to pay US$ 1.1 billion for the 74 percent stake. The acquisition will give Fosun access to the Indian drugmaker’s portfolio of generic injectable medicines that are primarily exported to the US.
Zai Lab’s US IPO: Last month, China-based Zai Lab — a Chinese biotech focused on oncology,
autoimmune and infectious diseases — raised US$ 150
million in its US IPO after the company increased the size of the offering to 8
million shares, from the originally proposed 5.8 million shares. Demand for the
shares was strong, and Zai's stock opened 50 percent above the IPO price
valuing the company at US$ 1.4 billion.
Click here to view the major deals in September 2017 (Excel
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Aspen
acquires another portfolio of drugs from Big Pharma
Last year, Italian antitrust authorities fined South Africa-based drugmaker Aspen Pharmacare nearly US$ 5.5 million for halting supplies of
several cancer drugs. This was seen as a negotiating tactic designed to hike
drug prices by as much as 1,500 percent.
The
products whose supplies were halted were: Leukeran 2 mg (chlorambucil); Alkeran 50 mg / 10 mg powder and solvent (melphalan); Alkeran 2 mg (melphalan); Purinethol 50 mg (mercaptopurine); and Thioguanine 40 mg (thioguanine).
The
price-gouging episode began after Aspen purchased the drugs from GlaxoSmithKline. It then began negotiations with the Italian
Medicines Agency over pricing for the cancer medicines. According to the
Italian Competition Authority, Aspen also used the threat of a shortage to
achieve the high prices it had sought, because the drugs temporarily
disappeared from the market.
Last
month, as part of its continued drive to purchase a portfolio of products from
major pharmaceutical companies, AstraZeneca announced that Aspen Global Incorporated (AGI)
will acquire the residual rights to the established anesthetic medicines
comprising Diprivan, EMLA, Marcaine, Naropin, Carbocaine, Xylocaine/Xylocard/Xyloproct, and Citanest.
AstraZeneca had entered into an agreement with AGI in June 2016, under which AGI had gained
exclusive commercialization rights to these medicines in markets outside the
US. Under the terms of the new agreement, AGI will now acquire the remaining
rights to the intellectual property and manufacturing know-how related to the
anesthetic medicines for an upfront consideration of US$ 555 million.
Additionally, AGI will pay AstraZeneca up to US$ 211 million in
performance-related milestones based on sales and gross margin during the
period September 1, 2017 to November 30, 2019.
Click here to view the major deals in September 2017 (Excel version available) for FREE!
Major CDMOs continue to expand manufacturing footprint
Contract
development and manufacturing organizations (CDMO) continued to bulk up their
manufacturing capabilities. First, Catalent announced it would purchase Cook Pharmica in a transaction valued at US$ 950
million. Catalent
intends to use the acquisition to invest aggressively in Cook Pharmica and
create a biologics development and manufacturing center of excellence.
Another CDMO — Avara Pharmaceutical Services — had acquired a Pfizer facility in Italy in August. Last month, Avara entered into an agreement with GSK to acquire a GSK consumer
healthcare manufacturing facility in Aiken, South Carolina. The terms of the
agreement were not disclosed.
Our view
Our technology of the month for August 2017 — CAR-T therapy for cancer — got another boost as Gilead (which had acquired Kite Pharma for US$ 11.9
billion in August) received approval last week for Kite’s most advanced CAR-T therapy candidate — axicabtagene ciloleucel (axe-cel). Gilead has announced a price significantly lower than the launch price at which Novartis
is selling its CAR-T treatment (Kymriah).
While the man who led CAR-T therapy program at Novartis — Vasant Narasimhan — went on to become the Swiss drugmaker’s CEO last month, its ex-CEO Joe Jimenez told Forbes magazine in an interview that he is “ready to return to Silicon Valley.”
In his interview, Jimenez, 57, indicated what he
thought he could be doing next.
“When I think of what really excites me, it’s where biology comes together with technology, like when you think about what’s happening right now in the Valley in California,” Jimenez said.
According to the interview, Jimenez is not ruling out joining another big company. He is fascinated by more entrepreneurial startups, and “sees an opportunity for those who understand healthcare to bridge the gap between brilliant techies and a broken system”.
He got a glimpse of this potential, he says, from Novartis’ efforts with Verily, the life sciences arm of Alphabet (formerly Google). The companies have been working on smart ocular devices, a contact lens that can monitor the sugar levels of diabetics
through their tears. Jimenez says there is a prototype of this lens, which
showed him that engineering could benefit from healthcare knowhow.
Jimenez isn’t alone in banking on biotech. In September, two former GSK executives — its former CEO Andrew Witty and its one-time research head Moncef Slaoui — announced their moves into the biotech, venture
capital space.
Our view is that large pools of capital combined
with the finest talent would certainly lead to some breakthrough technologies
in the pharmaceutical industry in the near future. Watch this space for more.
Click here to view the major deals in September 2017 (Excel version available) for FREE
Impressions: 2600
GSK, Google form first bioelectronics firm; 11 generic companies benefit from the Teva Allergan deal
This week,
Phispers brings to you the details of the bioelectronics firm formed by GSK and
Google. There is also news on companies like Teva, Takeda, Jinan Jinda and Eli
Lilly, besides two other news snippets pertaining to the FDA -- while the first
one pertains to generic approvals, the other one relates to an additional black
box warning on a few antibiotics. GSK and Google
join hands to form first bioelectronics startupGlaxoSmithKline and Google’s parent company – Alphabet – have joined hands to create a new company that is focused on fighting diseases by targeting electrical signals in the human body. This way, GSK and Alphabet’s life sciences unit – known as Verily Life Sciences – will be jump-starting a new field of medicine known as bioelectronics.Verily Life
Sciences and GSK will together contribute US $ 715.12
million
over seven years to the startup Galvani Bioelectronics. The startup will develop
miniature electronic implants for the treatment of asthma, diabetes and other
chronic conditions. The
implantable devices developed by Galvani, which is owned 55 percent by GSK and
45 percent by Verily, can modify electrical nerve signals. The aim is to
modulate irregular or altered impulses that occur in many illnesses.The
new company
will be based at GSK’s Stevenage research center north of London, with a second research hub in South San Francisco.The announcement comes just weeks after GSK had said it was going to use Apple’s HealthKit to conduct clinical trials.Three years ago, GSK had first unveiled its ambitions in bioelectronics in the journal – Nature. Bioelectronic remedies attach battery-powered implants the size of a grain of rice (or even smaller) to individual nerves to correct faulty electrical signals between the nervous system and the body’s organs.GSK believes altering these nerve signals could open up the airways of asthma patients, reduce inflammation in the gut from Crohn’s disease and treat patients with a range of other chronic ailments such as arthritis. So far, the implants have only been tested on animals but the aim is to produce treatments that will supplement or replace drugs that often come with side-effects.GSK
has been working on bioelectronic medicines since 2012 in a push to develop new
patentable treatments, since its Advair respiratory treatment faces competition
from generic versions. It has invested US $50 million in a venture capital fund
for bioelectronics and provided funding to scientists working in the field. Teva divests 79
products to 11 generic players to close Allergan dealTeva
Pharmaceutical Industries – the world’s largest generics drug company – won a US
anti-trust approval to purchase Allergan's generics
business, after agreeing to divest 79 generic drugs to rival firms. This was arrived
at to settle Federal
Trade Commission (FTC) charges that its proposed US $ 40.5 billion acquisition of Allergan’s generic pharmaceutical business would be anti-competitive. The remedy requires Teva to divest the drug portfolio to 11 firms, and marks the largest drug divestiture order in a FTC pharmaceutical merger case.The Teva-Allergan deal, which was announced in July 2015, solidifies Teva’s position as the world's largest maker of generics while freeing Allergan to focus on branded drugs.The
companies that
have acquired
the divested products are Mayne Pharma
Group, Impax
Laboratories, Dr Reddy’s Laboratories, Sagent
Pharmaceuticals, Cipla Limited, Zydus Worldwide
DMCC, Mikah Pharma, Perrigo Pharma
International, Aurobindo
Pharma USA,
Prasco and 3M Company. Eli Lilly CEO
steps down; company under probe by US Justice Department Eli Lilly CEO John
Lechleiter has stepped down after steering the pharma company through long R&D droughts. The company’s president David Ricks will move up to the top spot. And after a brief spell as executive chairman, Lechleiter will leave the company next spring.Lechleiter
has been the company's CEO since April 1, 2008, and the chairman of its board
of directors since January 1, 2009.The
announcement has come at a time when Eli Lilly has been asked by the
Justice Department to disclose information on relationships with pharmacy benefits
managers (PBMs), the companies that negotiate prices and set reimbursement
conditions.It
has not been clear what exactly the department of justice is looking for. In
the past, drug makers such as Novartis and AstraZeneca have agreed to
pay fines and penalties to settle allegations pertaining to PBMs. FDA continues
to race ahead with generic approvals The
American regulator has reduced its pile of ANDA (abbreviated new drug
applications) by about 500
applications in the first six months of 2016. The FDA has also approved 315 more ANDAs over the same time period and has sent 66 more complete response letters — or rejections — to drug makers.This
news comes after Bloomberg reported
last month that the FDA has become ‘something of a bogeyman’ for India’s stock markets by approving generic drug applications from India at a record place. Similarly, PharmaCompass
had reported last week that Indian
companies have been fixing compliance issues. China’s Jinan Jinda fails another EDQM inspection; compliance troubles in Denmark In
regulatory news from across the world, Jinan Jinda, a Chinese API
manufacturer that had failed an inspection by Italian regulators in June 2015,
had more bad news awaiting it a year on. In
a June 2016
re-inspection, this time by the Spanish Health Authority, the regulator maintained the ‘facilities non-compliance standing’ since two critical observations were made and the corrections from the previous inspection “were found as not having been implemented in a satisfactory way”. And critical deficiencies were found on raw data.In
the June 2015 inspection, the critical observation was related to an unofficial
and non-controlled storage area containing mainly raw materials and finished
products which had been made
inaccessible to inspectors as the door had been removed and replaced with a panel fixed with
screws to the wall.Meanwhile,
the FDA issued an untitled letter (dated July 15, 2016) to Danish allergy
immunotherapy company ALK-Abelló (ALK) over manufacturing and quality control issues at its Horsholm, Denmark facility. The letter comes after a 12-day inspection of the facility in March 2016. During the inspection, the FDA had cited ALK for four “significant deviations” from cGMP requirements. Another black
box warning added to antibiotics like Cipro and LevaquinThe
FDA has upgraded
warnings on
certain antibiotics, such as Johnson & Johnson’s Levaquin, Bayer’s Cipro
extended-release tablets and Merck’s Avelox. The FDA had
added a black box warning in 2008 about the increased risk of tendinitis in
which the tissue connecting muscle to bone becomes inflamed. In
May this year, the FDA had advised restricting the use of fluoroquinolone antibiotic for certain uncomplicated
infections and had warned about the disabling side-effects of the drug.The new warning talks about long-term risks to the drugs’ current black box warning. The agency also advised using the drugs only for serious infections. Manufacturers of fluoroquinolone have faced thousands of lawsuits from patients who claim that their injuries were caused by the drugs. J&J alone faced 3,400 lawsuits over Levaquin’s links to tendon problems and has also settled many of those cases. Takeda to
overhaul R&D, downsize operations in the UKTakeda Pharmaceutical of Japan has
said it plans to build a new pipeline of drugs. It plans to revamp its
research operations at the cost of around US $ 727 million.. The
company also plans to close some of its R&D operations in the UK. Takeda is
beginning the first ‘consultation stage’ of the layoff process in the UK, which hosts a pre-clinical R&D operation in Cambridge as well as a development center headquarter with facilities in the UK, Switzerland and Denmark.Under the revamp, Takeda’s R&D activities will be concentrated in Japan and the US, the 235-year old drug company said in a statement. Takeda plans to now focus on the three therapeutic areas of oncology, gastroenterology and the central nervous system.“We need to first build new capabilities and embrace new ways of working,” Andy Plump, Takeda’s chief medical and scientific officer, said in the statement.
Impressions: 2759