Market Place
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
version available) for FREE!
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
version available) for FREE!
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
version available) for FREE!
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: 2597
https://www.pharmacompass.com/radio-compass-blog/pharma-deals-investments-and-m-as-in-september-2017
#PharmaFlow by PHARMACOMPASS
23 Oct 2017
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Teva Pharmaceutical Industries, Ltd., which acquired Cephalon in 2012, will make a total payment of $1.2 billion as part of a ‘pay-for-delay’ settlement reached with the Federal Trade Commission (FTC) last week.
What exactly did Cephalon, for which Teva paid $6.8 billion, do so wrong? Isn’t ‘pay-for-delay’ common practice in the pharmaceutical industry?
First of all what is a
pay-for-delay?
‘Pay for delay’ or reverse payment patent settlements, are agreements where the brand name drug manufacturer compensates generics, not to market the generic product for a specific period of time.
These settlements allow the brand manufacturers to extend their
patent monopolies and according to an FTC study, these deals
cost consumers and taxpayers $3.5 billion in higher drug costs every year.
What exactly happens and
why is it a big deal now?
Cephalon allegedly paid four generic drug companies (Teva, Ranbaxy Pharmaceuticals, Mylan Pharmaceuticals, and Barr Laboratories), over $300 million in total. In return the generics agreed to drop their patent challenges and forgo marketing of their generic versions of Cephalon’s blockbuster sleep-disorder drug Provigil, for six years, until April 2012.
An extended monopoly for Provigil, in the absence of generic competition, was “$4 billion in sales that no one expected”, the CEO of Cephalon reportedly said when the deal was struck.
While in Europe, regulators have been going after pay-for-delay cases for years, it was only as recently as 2013, in FTC v. Actavis, that the U.S. Supreme Court made clear that reverse payment patent settlements are subject to the same antitrust rules that govern general U.S. business conduct.
The payment made by Teva will compensate purchasers, including drug wholesalers, pharmacies, and insurers, who overpaid because of Cephalon’s illegal conduct, is the first positive outcome for the FTC after the Supreme Court ruling.
How common are ‘pay-for-delay’ settlements?
Based on data provided by the FTC, for the past few years, more
than 100 settlements are reached annually between brand and generic
pharmaceutical companies.
Over 30% of these settlements have the potential of being ‘pay-for-delay’ agreements.
Table// Potential
pay-for-delay settlements reached between brand and generic companies:
Financial Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Final Settlements:
between brand and generic companies
14
11
28
33
66
68
113
156
140
145
Involving First Generic Filing
8
5
11
16
29
32
49
54
43
41
Potential Pay-for-Delay:
Involving First Generic Filing
2
9
11
13
15
26
18
23
13
Settlements
3
14
14
16
19
31
28
40
29
How severe are the penalties for ‘pay-for-delay’ settlements in Europe?
The European Commission has
fined Johnson
& Johnson (J&J) just under 10.8 million
euros and Novartis 5.49 million euros, after discovering a ‘pay-for-delay’ deal on the painkiller Duragesic (fentanyl).
The amount pales in comparison to
the whopping €428m fine on Servier and several other companies (Niche/ Unichem; Matrix, which is now part of Mylan; Teva; Krka and Lupin) for conspiring to delay generics of the widely-used blood pressure drug Coversyl/ Aceon (perindopril).
In yet another settlement, agreements which operated in 2002 and
2003 between the Danish originator Lundbeck, and other
generic companies, resulted in Euro
146 million in fines.
What should we expect in the future?
Based on an FTC
presentation made in September 2014, they highlighted 19 Cases to Watch, which has them targeting almost every
major brand and generic pharmaceutical company. However, with the complexities
involved, this list is continuously evolving:
The
cases (by name of the brand product) Actos,
Adderall,
Aggrenox,
AndroGel,
Cipro,
Effexor,
K-Dur, Lamictal, Lidoderm,
Lipitor,
Loestrin,
Nexium,
Niaspan,
Opana,
Provigil,
Skelaxin,
Solodyn,
Wellbutrin.The
brand companies involvedAbbvie,
Abbott,
AstraZeneca,
Bayer,
Besins,
Biovail,
Boehringer,
Cephalon,
Endo,
GlaxoSmithKline,
King,
Medicis,
Pfizer,
Shire,
Schering,
Takeda,
Warner
Chilcott, Wyeth.The
generic companies Actavis
, Barr,
Duramed,
Dr. Reddy’s, HMR, Impax,
Lupin,
Mutual,
Mylan, Par, Perrigo,
Ranbaxy,
Rugby, Sandoz,
Teva,
Upsher
Smith.
Our view:
Pharmaceutical companies,
lawyers and the FTC will be busy for the coming few years, since there are a
series of suits, which will be challenging settlements reached between brand
and generic pharmaceutical companies.
While patents
provide temporary monopolies to promote innovation, brand drug manufacturers
will need to resort to more innovative ways of sustaining their profits.
Click here and learn about the different strategies adopted in the United States to block generics?
Impressions: 3400
https://www.pharmacompass.com/radio-compass-blog/haunted-teva-s-1-2-billion-pay-for-delay-penalty-which-companies-will-get-hit-next
#PharmaFlow by PHARMACOMPASS
04 Jun 2015
