sweet leah

I just found out that Leah passed away this morning.

Her heart stopped and they tried to revive her unsuccessfully. Nobody really knows why or whether or not it was related to yesterday's g-tube/teeth removal surgeries.

We are all so heartbroken. Please pray for Leah's entire family, especially her parents, Jeff and Meg.

I don't know what else to say.

bummage begone

A few months ago, Jonah's Child Developmental Services Case Manager asked me if Jonah reacts differently to children than to adults. It was just one of those standard development questions. Anyway, I had to say I didn't know because he is rarely around kids. His close-by cousins have been sick a lot these last few months (colds and the like), and he doesn't do daycare or the nursery at church because of germs. Anyway, I told her no.

But Ms. B, just to answer your question - "Uh, yeah, just a little."

Please enjoy this two and a half minutes of Jonah thinking his cousins are absolutely hilarious.

I'm a little late tonight (Christmas with Matt's family), but I hope you have read Leah's blog by now. Everything went really well today. The g-tube was placed without incident, and she had eight teeth removed. And thanks to all those prayers, there is no damage to her mouth or face. Praise God!

Please continue to pray for the rest of Leah's hospital stay and that she will remain infection free. They hope to go home on Saturday. Also, please be in prayer for Tripp tomorrow as he's also getting his teeth removed.

Thank you so much for your prayers. I know Meg, Courtney, and I all appreciate them very much.

prayer requests

UPDATE: Leah is in recovery and did well during surgery. I'll update more when I know. That's all I've got right now.

I've had a lot weighing on my heart lately, but didn't want to share until after Christmas as to keep the bummage to a minimum.

We've had two losses (that I know of) in the EB Community this month. One was a three month old baby with Junctional EB and the other was a six and a half year old little boy with Junctional EB. Baby L got a g-tube, developed an infection, and passed away in early December. The little boy, W, had been fighting severe Junctional EB for six years, and finally, his body just couldn't take it anymore. He died in his sleep on Christmas Eve. I can't tell you the sadness I've felt for their families, especially their mothers, whom I don't even know. And of course, I've had a certain amount of sadness over thoughts of losing Jonah. Maybe it's crazy to think of his death when he's doing so well. I don't know. I know I should focus on the positive, and I do most of the time, but sometimes this stuff - this cruel reality that is Junctional EB - just slaps you in the face. To think that he could be doing well now, but that we could lose him at six years old. I can't handle it. And I think about it. A lot. I just can't help it. And I cry and obsess and cry some more. And then I'm okay. And then I'm not. We were told that non-Herlitz could have a normal life span (with MANY difficulties and complications), but I think I only KNOW of two Junctional EB adults. To me, that just doesn't add up. Anyway, I was doing really well with all of it and then we lost L and W, and I'm in a low now... really struggling with focusing on the now rather than worrying about the what if.

And I guess the real reason I'm posting tonight is to ask for prayers for Leah and Tripp.

Leah (already with a trach) will be getting a g-tube and her teeth taken out tomorrow.

Tripp (already with a trach and g-tube) will be getting his teeth (ten in all I think) taken out on Thursday.

I hate what Courtney and Meg are having to go through. It is not fair that two such young, beautiful mothers have to deal with this. They are having to have their babies' teeth REMOVED because their teeth are tearing their mouths to pieces. That is so incredibly messed up. And please pray for Leah as she gets her g-tube. Thankfully she will not have to be intubated since she already has the trach, but please pray that she will resist infection while in the hospital.

Thank you for keeping all of our sweeties in your prayers. And if you are making any end of the year donations, please consider DebRA or the Epidermolysis Bullosa Medical Research Foundation. We are desperate for a cure! Please help if you can.

While You Were Voting ...

If you've voted in our Deal of the Year competition, thanks. If you haven't voted, you can vote here.

Meanwhile, after a Crazy week last week (which our crack team of DOTWologists were all over), very little has happened in industryland since Wednesday's preeeetty cool AZ/Forest/Novexel deal (except for that HCR vote). So we'll make some stuff up.

• Jeff Kindler hit the sales and totally scored some great ties at like, half price.
  
• Chris Viehbacher returned a sweater.
  
• No really, go vote.
  

ten months today

Hello World!


Today is my ten month birthday. Can you believe that?



Yeah, neither can Mommy. She says she can't believe how grown up I'm looking all of a sudden. I'm struggling a little more with my weight gain lately (stupid gushers!), but I'm sure not scrawny. I currently weigh 19 lb 11 oz, and we think I'm in the thirty something percentile. But that was a while ago, and Mommy says I've probably dropped a little bit. I'm on just Soy formula now, and we're just now starting to try solids again. Mom says I'm doing much better than I was a few months ago. Sometimes I'll eat about a half a container of baby food in one sitting. THAT is a very big deal for me. My hair is getting so long that I almost need a haircut. It's really thick on top, but because I blistered so badly on the back of my head when I was a little baby, it's not growing as much back there. Mom wants it to be a little long so it will grow over my bald spots. I don't mind having bald spots though. It's just like my Grandaddy's.

I'm making all sorts of sounds ALL the time including ma, na, ba, da, ga, heh, and sometimes la. I also like to make a gargling sound and still enjoy a good scream every now and again. Da is probably my favorite sound, although I'm not associating it with my Daddy yet. I say Da when I'm really happy, and I only say Ma when I'm really ticked off. Go figure, Mom says. I babble like a crazy person. Mom thinks when I do start talking, I'll go a mile a minute.

I still have only two teeth on the bottom and one coming in on the top. Mom's glad I'm slow on the getting teeth front, because teeth, for me, cause blisters, so the fewer the better at this point. I'm liking tummy time a little better, but I still don't push up on my hands very much.

My favorite songs lately have been O Holy Night, Away in a Manger, the Chris Tomlin version of Amazing Grace, Skidda Marinky Dinky Dink, and the funky version of Jesus Loves Me (think Queen's We Will Rock You).

This past month I've learned how to ride in a shopping cart, and today I sat in a high chair for the very first time. See?

In a cart and a high chair I still have to have some rolled up blankets to help support me, but Mommy says I'm making very good progress.

In just the last week, I've FINALLY started putting weight on my feet and standing up. Mommy and Daddy still have to help me a lot, but I can pretty much support my weight on my feet as long as they hold onto me around my torso. Mommy was so excited the first time I did that she about peed her pants. Silly Mommy. She says I'm well on my way. I don't know what she means by that, but it seems to make her really happy, so maybe I'll keep doing it.

I'm loved by lots and lots of people. Today I got to meet my Pop at a restaurant for a third Christmas celebration (still two more to go). He's so silly and makes lots of funny faces.

He gave me this cool bird feeder, and Mom says it will be really neat in the Spring when all the birds come back. She says that we can hang it on the back deck, so I can see them out the window.

I'm liking all of this present stuff A LOT.

I'm definitely more into the bows and paper than the actual gift, but I'm learning that the toys do really cool things too. My favorites so far seem to be my WonderPets Fly Boat and my Ball Popper that Santa brought me.

It's been crazy around here these last couple days, so Mom hasn't been able to show me what all my toys do yet. She says I'm going to love them all. My Aunt Sarah got me a little sit-up size basketball hoop that cheers when I make a basket, so Dad likes to help me play with that. He can't wait til I can shoot real hoops in the driveway, so this is good practice. Little does he know I'm going to take him to school in basketball. I'm the next Steve Nash. What? You didn't know I am 1/8th Canadian, eh?

Tonight Granny and Grandaddy came, and they are going to be here ALL WEEK. It's too good to be true!

My Aunt Kim, Uncle Andrew, and my cousins are coming on Tuesday night, but they can't stay here. Uncle Andrew is allergic to cats. Mommy says that's probably a good thing that they're not staying here because she'd hate to have to make someone (or several someones) sleep in the closet.

Mom says she just can't believe I'll be turning a year old in just two months. She's so glad I'm getting older, bigger, and stronger. For the most part, things are getting some easier. But I think it makes her a little sad that I'm less and less baby every day. Don't tell anyone, but sometimes when she's rocking me, and it's just me and her, she cries a little bit thinking about the days I won't need her to rock me anymore. She loves me a lot, I think. Daddy does too, and he's just the most fun. Now that I can support my weight a lot better, Daddy does his curls with me (literally, WITH me) and can wrestle me a little bit. Mom does a lot of Ride A Little Horsey (although she does a Spanish version) and flies me around the room. We all like that they can be more physical with me, and because of all my protective bandages, it doesn't hurt me one bit. Thank you, Jesus. Mommy thinks back a lot to those first days after I was born when she didn't even know if she'd be able to touch me. But I get hugs, snuggles, kisses, and wrestling moves just as much as the next guy, and I love every minute of it. We've all come a long way.

Mom and Dad say they are so blessed to have me, and they don't take one single moment for granted. Although some days are (much) harder than others, they love me every second of every minute of every day and thank God that He thought enough of them to make them my parents. What an honor! They wouldn't have it any other way.

Now that the holidays are almost over (did I mention I get two more Christmases?), Mom says she has to start planning my first birthday party the blow out of the century. Shwoo. She's going to have to find some place a lot bigger than our house to have it. She says all that love can't fit into our little house. What a great problem to have!

prayer request for leah

Our EB friend, Leah, is in the hospital. She stopped eating on Christmas day, and it appears as though she will be getting a g-tube very soon. Please be in prayer for her (and her family), as any procedure is complicated for an EB baby. Thankfully, she will not have to be intubated, since she already has a trach, but there is still danger for infection and complication.

You can follow Leah's blog here. She is just a few weeks older than Jonah and also has Junctional EB.

photos from the last couple days

At Gabe's Spot

Christmas Eve at Mom's

Christmas Morning

Playing Video Games with Dad

Checking Out Trent's Beard

Merry Christmas

Thank you so much for the love and support you've shown us this past year.

Hope you all have a very Merry Christmas!

merry christmas adam

We haven't done a whole lot today. We got dressing change out of the way first thing and then Jonah and I just kind of hung out until this afternoon. We had to go pick up our grocery order at 2:30. I know I've said that before but online grocery shopping is the bomb diggidy. I can pick out everything in about half the time, always know I'm getting the best price because you can sort by lowest unit price, and save money because I don't impulse shop. The $4.95 is totally worth it. My understanding is that you can use coupons, but I'm not sure how that works. I don't know if you have to let them know ahead of time so they wait and ring up your order or if they credit money to your next purchase. Either way, it's good stuff.

When we got home, there were flowers for me waiting on the front porch. Guess who they were from? Matt's dad! So sweet. And because they have real garland or something in them, the house smells like a Christmas tree now. Our tree is artificial, so I'm very glad to have the real smell.

Jonah did NOT sleep all night last night... not even close, actually. But we hope that last night was the fluke and not the two nights before. He refused to eat overnight though, so I'm hoping that's a good sign. More interest in sleeping than eating at night is the first step, I'd say. Guess what? Thirty-one point eight ounces today with no gushers. I'm so thankful that he's eating better. And now that I have groceries (finally), we're getting started on the solids for real. I'm going to be really relaxed about it though. He can eat how much he wants, and as soon as he starts acting disinterested, we're all done. I'm not pushing it until we HAVE to push it.

Okay, I'm not sure when I'll post again, but I'll try to get some photos up when I can. Tomorrow is our first Christmas at my Mom's house. Ham and Lima beans, here I come.

Merry Christmas Adam! (Get it? Because he came first. Get it? That one is compliments of Matt's Dad too. You're welcome.)

DotW: Last-Minute Shopping

Nothing like year-end deadlines to get the deal-making juices flowing. This month alone, we've counted 48 announcements of biopharma deals, an average of 2.4 per global business day, and that doesn't include financings. As far as we know, no business-development executives were crushed by a midnight mob, but you can bet lawyers poring over term sheets weren't offering any complimentary gift-wrapping.

You could attribute the flurry to concern about the unknowns of health care reform, worries over some yet-to-be announced new taxes or changes in financial accounting. But it's not quite what it seems: the total is actually on par with 2008 and way down from the Decembers of 2006 and 2007 (71 and 68, respectively). Isn't the New Normal exciting?

Maybe it just seemed like a mad rush because of all the drama outside. Or maybe it's because of all the big names. According to our count, 26 of the December deals involved Big Pharma. Of those, Pfizer seemed to be in the most partner-happy mode, with six deals to its name. Since Dec. 21 -- that's two days ago as of this writing -- it's inked four deals, all small, but all signals of its new preoccupations: in-licensing biotech (the stem-cell deal with Athersys and the Compugen deal for three drug candidates) and licensing out former priorities (The Medicines Co. gets Pfizer's ApoA-I cardiovascular compound). All of these fit with Pfizer's broader strategic intentions announced earlier this year, telling tales of days gone by and yet to come.

But a neat wrap-up wouldn't befit a year filled with unexpected shocks and twists. Despite pharma's ongoing efforts to derisk risk (Sanofi's acquisition of Chattem could fit that bill), the months to come are guaranteed to bring even more uncertainty. Who would have figured 10 or even five years ago that Teva's growth profile would seem more Big Pharma-ish than Big Pharma itself? Meanwhile, the deals announced this week are relatively small (Sanofi's being the exception), and only hint of what lies ahead… -- Wendy Diller

Pfizer/Athersys: In one of several transactions announced this week by the New York-based drug maker, Pfizer provided much-needed validation for Athersys’ transformation from a gene-therapy play to a company focused on stem-cell-derived therapeutics. The Dec. 21 licensing deal brings the Cleveland biotech $6 million upfront and up to $105 million in milestones. Pfizer obtains worldwide rights to develop and commercialize MultiStem, a preclinical stem-cell therapy, for inflammatory bowel disease. On an investor call, Athersys noted IBD affects an estimated 2 million combined patients in the U.S., core EU markets and Japan. Current therapies have limited effect and some chronic IBD cases result in surgery, but even such procedures don’t always produce a cure. Unlike embryonic stem cells, MultiStem is a biologic made from cells extracted from the bone marrow of adult donors. The Athersys collaboration is one of several forays by Pfizer into the stem-cell arena in the past two years. Last December, Pfizer paid an undisclosed upfront fee and research funding to license pancreatic progenitor cells derived from human embryonic stem cells from Novocell. In 2009, Pfizer signed a pair of agreements with academic institutions, licensing its patents related to the use of human embryonic stem cells to the Wisconsin Alumni Research Foundation, and partnering with University College London to develop stem-cell therapies for ophthalmologic indications including wet and dry age-related macular degeneration. -- Joseph Haas

Pfizer/The Medicines Company: Mimicking the risk-averse structures many Big Pharma companies have pursued in 2009, The Medicines Co. will take worldwide rights to the stalled cardiac drug ApoA-I Milano from Pfizer for $10 million upfront, plus milestones up to $410 million and single-digit royalties on sales if a product reaches market. TMC needs to add critical-care products to a portfolio threatened by next year's patent expiration of top seller Angiomax. CEO Clive Meanwell said decision-makers for the product likely will be the same critical care specialists TMC deals with in marketing Angiomax and Cleviprex, and plans to target with molecules in its late-stage pipeline. CFO Glenn Sblendorio noted that development milestones due to Pfizer total only $20 million, with $90 million pegged to regulatory filing and approval and the remainder to sales targets. The relatively low price TMC is paying is in stark contrast to the $1.25 billion Pfizer paid to bring in ApoA-I Milano in its 2003 acquisition of Esperion. -- JH

Teva/OncoGenex: Teva gave $60 million upfront and up to $370 million in milestones to OncoGenex in exchange for a global license to co-develop and commercialize OGX-011, a second-generation antisense compound ready for Phase III. Despite the solid deal terms, the Bothell, Wash., biotech's stock tumbled on the news Dec. 21. After closing Dec. 18 at $29.65 per share, the biotech’s stock dropped to $21.13 the day the deal was announced, though it has since rebuilt some value. Perhaps investors didn't notice that Teva’s upfront included a $10 million equity stake in OncoGenex at $37.38 per share, a level at which the stock hasn’t traded since late September. The firms will collaborate on an ambitious Phase III program – three trials are planned in various cancer types to demonstrate '011’s efficacy as adjunctive to chemotherapy – but Teva will cover all development costs. Should '011 reach market, OncoGenex has the option to co-promote the drug in North America and is eligible to receive sales royalties ranging in percentage from the mid-teens to the mid-20s. -- JH

Eli Lilly/Kowa: Lilly will help commercialize Livalo, a synthetic statin used to treat primary hyperlipidemia and mixed dyslipidemia, which are characterized by abnormal levels of cholesterol and fatty substances in the blood. Kowa Pharmaceuticals America, a U.S. subsidiary of the privately-held Japanese firm, will get an undisclosed upfront payment. Both companies will copromote in the U.S., with both supplying sales reps and sharing marketing and development costs. Kowa, which is based in Montgomery, Ala., will record all U.S. sales and pay Lilly an escalating co-promotion fee based on net sales. Lilly has exclusive rights to commercialize Livalo in Latin America. Livalo has been tested again Pfizer’s Lipitor and Merck’s Zocor in patients with primary hyperlipidemia or mixed dyslipidemia. -- Ed Silverman

AstraZeneca/Novexel/Forest Laboratories: About a month ago, we noted that deals for clinical-stage antibiotics or their sponsors were topping off around $500 million. Bingo! AstraZeneca is buying antibiotic developer Novexel for $350 million, plus cash and contingencies that could bring the deal to $505 million. Note, however, that Astra will get a big chunk of the cash back from Forest Labs in a complicated shuffle. Paris-based Novexel’s lead compound, NXL-104, is a beta-lactamase inhibitor that fights resistant gram-negative bugs, a growing threat in hospital settings. The compound is in Phase 2 testing in fixed-dose combination with Forest’s ceftaroline, and Forest has North American rights. Once the AZ buyout closes early next year, Forest will pay AZ $210 million for global rights to the '104/ceftaroline combo, then it will license rights outside North American and Japan back to AZ. Forest will also gain partial rights to the combination of ‘104 and ceftazidime, an off-patent antibiotic that Novexel has been testing with '104. Novexel spun out of Sanofi in 2004 and took €90 million ($129 million in today’s dollars) across two rounds of venture funding. Shareholders get the $350 million cash payout, plus reimbursement for the estimated $80 million cash left on hand at the close of the deal, along with potentially $75 million more for an undisclosed milestone. -- Alex Lash

Incyte/Lilly: Less than a month after scoring a big-bucks deal with Novartis for its lead myelofibrosis candidate, Incyte received another vote of confidence for its JAK inhibitor program. Lilly bought global rights to an early-stage molecule aimed at inflammatory diseases for $90 million upfront, $665 million in potential milestones, and up to 20 percent royalties on future sales for the JAK1/JAK2 inhibitor INCB28050 and follow-on compounds. Incyte will get an option at the start of Phase IIb to co-develop on a compound-by-compound and indication-by-indication basis. The firm expects upfront and milestone payments will fully cover its share of late-stage expenses. Royalties could stretch to the high 20s if Incyte takes advantage of the co-development option. Last month, Novartis agreed to pay $150 million upfront plus a $60 million retroactive milestone payment for development and commercialization rights outside the U.S. to INCB18424, a JAK1/JAK2 inhibitor in Phase III for myelofibrosis. More than $1 billion in potential milestones are also part of that deal. -- Emily Hayes

Seattle Genetics/GlaxoSmithKline: GSK is licensing Seattle Genetics' proprietary antibody conjugate technology, a move that further confirms Big Pharma's growing interest in antibody adjuvants to enhance their immunotherapy initiatives. Glaxo will pay $12 million upfront for rights to use the biotech’s ADC technology with multiple antigens. Glaxo will be responsible for research, product development, manufacturing and commercialization of any ADC products that originate from the deal. In return, Seattle Genetics could snare up to $390 million in milestones if all ADCs in the collaboration are commercialized, plus mid-single-digit royalties on worldwide net sales. The companies didn't disclose the specific targets or therapeutic areas, but cancer immunotherapy seems a likely focus. It's the third deal for SeaGen in nearly as many weeks. In November, the biotech announced it was expanding its 2007 licensing deal with Agensys, a subsidiary of Astellas Pharma, to include more targets. On Dec. 15, the firm announced a deal involving rights beyond the U.S. in which Millennium, a subsidiary of Takeda Oncology, gained marketing rights to its lead product, SGN-35 (brentuximab vedotin). -- EH

Chattem/Sanofi-Aventis: Sanofi-Aventis will try its hand at over-the-counter sales in the U.S. with its $1.9 billion offer to buy U.S.-based Chattem. Announced Dec. 21, the deal will further diversify the Paris-based pharma before some of its major prescription brands, notably the Plavix bloodthinner, face generic competition. Since Chattem is an established player in the U.S. OTC market, the acquisition would enable Sanofi to switch its antihistamine Allegra into an OTC product without losing a significant chunk of profits to licensing deals. At the same time, the deal allows Chattem to take advantage of Sanofi’s global network and market its products outside the U.S., including the emerging markets that Sanofi is now targeting. The U.S. OTC market was worth $21 billion in 2008, or 25 percent of global OTC. The U.S. market also is a "relatively fragmented" one, making the field more open to new players, and it is growing at a rate of about 4 percent, noted Sanofi executives. -- EH

Photo courtesy of flickr user donebythehandsofabrokenartist.

And the Exit/Financing Deal of the Year Nominees Are ...

OK readers, it's time to have your say! This year we've set up a special IVBDOTY web page where you can vote in all three categories. CLICK HERE TO GO TO THE VOTING BOOTH.

And so here, in no particular order, are your IN VIVO Blog 2009 Exit/Financing Deal of the Year nominees. Please do comment on this post about any and all of these deals, and why you voted the way you did.


Lundbeck/Ovation: Acquisitions with earn-out payments (a.k.a. CVRs) dominated the biotech M&A scene, particularly during the dark days of early 2009. Lundbeck's acquisition of Ovation boasted a biobucks figure of $900 million. No doubt there was a large down-payment ($600mm) but a substantial sum rested on the regulatory progress of Ovation's epilepsy drug Sabril. The CVR-boosted deal structure was established to allow Ovation and Lundbeck to share the risk associated with that approval. That drug was approved by FDA in August with a REMS to help mitigate the risk of peripheral blindness, a known side-effect of the drug. The REMS itself was well-anticipated given the rocky history of the drug (which Ovation licensed in from Aventis in 2004) and Sabril is now on the market--second line for epilepsy and first line for infantile spasms, a condition for which the drug has Orphan designation.

Abbott/PanGenetics: Asset-focused funding of early-stage projects has fallen in and out of favor over the years, but the success of PanGenetics November deal with Abbott for its nerve growth factor antibody may draw imitators. In an interesting twist on company creation, the outfit was structured from the get-go as essentially two independent one-asset companies (NGF was one, the other is CD40), of which founder Index Ventures still owns 40% apiece. And so at first the Abbot/PanGenetics transaction looked like an oddly up-front-heavy licensing deal, but when Abbott paid $170 million up-front plus a potential $20 million milestone to access the biotech's PG110 Phase I anti-NGF project, it was in fact buying that company. The $170 million went straight to PanGenetics' investors; it won't be ploughed into the anti-CD40 mAB program. Nor will Abbott pay any downstream royalties to the biotech or its investors.

Cephalon/Ception: Cephalon's option to buy Ception for $100 million upfront and another $250 million in milestones, with the purchase tied to the clinical performance of the start-up's Phase IIb/Phase III anti-interleukin-5 antibody, reslizumab, was the first of half a dozen or so option-to-buy deals in the past year. As we wrote at the time the deal was announced, the option-to-buy strategy is a clever way for Cephalon to acquire a potentially valuable large molecule platform while simultaneously capping the expenses it might owe down the road as it tries to build a pipeline of novel drugs to treat inflammatory diseases.

Vertex Sells Telaprevir Milestones: In July Vertex announced that it would sell its future milestone payments associated with the filing, approval and launch of the HCV protease inhibitor telaprevir in Europe. Those milestones are owed (potentially, of course) by J&J, which licensed European rights to the HCV protease inhibitor from Vertex in 2006, and could total $250 million. The complicated, two transaction deal was just the latest move by Vertex in a series of ambitious financings that have raised hundreds of millions of dollars over the past two years.

Movetis' IPO: Any company that gets an IPO done these days could be considered worthy of a DOTY nomination. Movetis' was the best of an admittedly small bunch, hauling in nearly €98 million. And what's more as of this writing the company is trading above its €12.25 per share offer price. Movetis spun out of J&J at the end of 2006 with about €60.8 million in Series A venture funding led by Sofinnova (pre IPO Sofinnova Partners held 22.5%, Sofinnova Ventures had 16%) and Life Science Partners (16.9%). At the time its lead asset, the newly-approved-in-Europe for a subset of constipation patients Resolor, was already in Phase III. (In exchange for pipeline, J&J held on to 21.2% of the company and received an upfront fee.)

BMS/Mead Johnson Spin-Off: Bristol's two-part spin-off of nutritionals unit Mead Johnson is a creative and lucrative pair of deals that help the company boost cash flow and juice its earnings per share to keep rivals at bay while it deals with two large patent expiries and tries to employ its String of Pearls strategy to restock its pipeline. Structured as a stock-buyback, BMS is trading shares of Mead Johnson for its own stock in a tax-free transaction. The move capitalizes on the dramatic increase in MJN share price since Bristol IPO'd the unit in February. This latest--and probably last--move toward a biopharma focus at the expense of the diversification the rest of the industry seems so enamored by does sacrifice stability for short-term gain. But it might just help to secure the company's longer-term existence.

And the M&A/Alliance Deal of the Year Nominees Are ...

OK readers, it's time to have your say! This year we've set up a special IVBDOTY web page where you can vote in all three categories. CLICK HERE TO GO TO THE VOTING BOOTH.

And so here, in no particular order, are your IN VIVO Blog 2009 M&A/Alliance Deal of the Year nominees. Please do comment on this post about any and all of these deals, and why you voted the way you did.


Johnson & Johnson/Elan: Johnson & Johnson's July purchase of Elan's Alzheimer's immunotherapy program (AIP) via a stock purchase plan that gives the health care giant an 18.4% stake in the biotech. And the deal's complicated structure helps both J&J and Elan hedge against risk. In return for roughly $1 billion in capital (slightly less after Elan got into a tussle with BiogenIdec about a potential change of control to Tysabri), J&J is creating a new co focused on Alzheimer's immunotherapy, with a near-term focus on the interesting, but still very risky Phase III antibody bapineuzumab. Elan benefits because it doesn't have to fork over all the upside to its Alz program, given the biotech retains a 49.9% stake in the newco and also has a 49.9% share in its profits or losses. Elan also also gets significant help funding bapi's development with this deal. With J&J committing another $500 million to the antibody's Phase III trials that molecule will have to rack up $1 billion in costs before Elan has to pay another penny.

GSK/Concert: GSK’s deal with Concert is representative of GSK's many option-alliances: flexible, low-cost, risk-mitigating, pay-for-performance-oriented and, frankly, we think just rather clever. It's also a very definite sign of the times. GSK paid $35 million up front (including $16.7 million in equity, another way to spread risk) for options on three projects, the most advanced of which started Phase Ib in November this year, the least advanced of which hadn’t even been selected at the time of the deal. GSK can opt into these programs at clinical proof-of-concept (or slightly earlier, at Phase I, for the lead). It’s risk-sharing deal content, too: Concert’s compounds are mostly deuterated versions of existing molecules, meaning it has replaced hydrogen atoms with deuterium atoms, creating new, patentable chemical entities that skirt existing IP and that may even be safer and/or more effective than the originals.
Astellas/Medivation: With pipelines flagging and the general push to look outside, the hottest targets/assets/technologies are still commanding value in competitive auction arrangements. In October Medivation announced a tie-up with Astellas to develop its Phase III prostate cancer drug, MDV3100 in a transaction worth $110 million up-front and biobucks of more than $650 million. Moreover, Medivation still keeps significant control of the development program--at least in the US, where the two firms evenly split costs. (Ex-US, Astellas picks up the whole tab for development and commercialization, providing tiered double-digit royalties in exchange for the privilege.) Astellas was a particularly active dealmaker in 2009, this deal hits a hot oncology target, and was an early sign that dealmaking upfronts are on the way back up.

GSK/UCB: The January deal in which GSK paid UCB $670 million for commercial operations in more than 50 non-core countries, as well as rights to sell some primary care drugs in those territories, captures so many of 2009's biggest trends: the land grab in emerging markets, the tug of regionalization versus globalization, the ongoing shake up in primary care, and diversification--the bluster of the big versus the commitment of the focused. On one level, the deal shows how two companies with very different strategies are reacting to the mania about emerging markets. GSK is looking to be a geographically diversified global provider of medicines at all price points to as many countries as possible—and says its far-flung infrastructure, deep pockets, and global expertise make it the go-to company for late-stage deal-making in emerging markets. UCB, on the other hand, is joining a small, but important group of biopharma that has chosen to intensify its focus rather than diversify. It recently repositioned itself as a spec pharma focused on CNS and inflammatory diseases and is extending that idea globally.

Abbott/Solvay: Abbott's $6.6 billion acquisition of Solvay's pharmaceutical unit follows a pretty straightforward plot line, but the clincher to the story is this: Abbott is buying the Belgian drug unit with cash, most of which is coming from overseas. It's a smart use of those funds since repatriating it would subject it to a hefty 35% tax. And while multinationals sidestepped a withdrawal of the overseas tax deferral by the Administration earlier this year, some in the industry still think the axe could fall, next year when the budget review comes around. The drug maker also adds more than $3 billion to its top line and gains full control over the blockbuster TriCor/TriLipix dyslipidemia franchise, a business Abbott has big plans for, and the addition of Solvay's drug unit also extends Abbott's geographic footprint, adds a branded generics business and provides entry into vaccines. (Ooh, diversification.)
Sanofi-Aventis/Regeneron: Biotechs often link their destinies to a Big Pharma big sibling, but few have gotten such sweet deals as Regeneron has with Sanofi-Aventis. Sanofi pays Regeneron $160 million a year in research funding through 2017 and can take over development of any antibody candidate at IND. Sanofi then funds clinical development, and if the candidates come to market, Regeneron splits profits (50/50 in the U.S., and a sliding scale from 65/35 to 55/45 in Sanofi's favor outside the U.S.). Regeneron reimburses Sanofi half the development costs from its share of the profits, which means no profits, no reimbursement. What's the catch? You tell us when you find one, at least from Regeneron's point of view.

And the Big Pharma Deal of the Year Nominees Are ...

OK readers, it's time to have your say! This year we've set up a special IVBDOTY web page where you can vote in all three categories. CLICK HERE TO GO TO THE VOTING BOOTH.

And so here, in no particular order, are your IN VIVO Blog 2009 Big Pharma Deal of the Year nominees. Please do comment on this post about any and all of these deals, and why you voted the way you did.


Dollars for Donuts: Is the biggest deal for Big Pharma in 2009 the $80 billion deal struck by the brand name trade association PhRMA as its contribution to health care reform? We call it "Dollars for Donuts" because a key element of the deal is the industry's commitment to offer a 50% discount on drugs purchased by Medicare beneficiaries in the Part D coverage gap, a.k.a. the "donut hole" in the prescription drug benefit for seniors and the disabled. It's not a traditional biz dev opportunity, we admit. But if Big Pharma dealmaking is about anything, it is about paying up front for access to new commercial opportunities downstream. And this deal fits that model perfectly.

Pfizer/Wyeth: This is the deal that marked the beginning of a new kind of Big Pharma. For better or for worse, it turns Pfizer from an R&D-focused, high-risk, high-reward company into a diversified, industrialized group whose investment appeal is less about growth than about dividends, efficiency and value. In its scale, the transaction symbolized the scope of Pfizer's--and other Big Pharma's--challenges, and in its content, it captured--in one fell swoop--many of the individual strategies drug firms are pursuing in order to escape from their R&D productivity problems.

Pfizer/DOJ Bexxtra Settlement: Pfizer’s September settlement is by far the biggest in the wave of industry prosecutions that defined the decade of the 2000s. But these settlements have always been more important than the dollars. Each case—and the headlines it generates—marks another step down in the reputation of the industry. They have helped stoke a puritanical fire in the medical establishment, one that aims to root out all industry influence over clinical research, medical education, and clinical practice standards, a movement that could, taken to extremes, jeopardize the entire private sector biomedical model.

Merck/Schering-Plough: Merck might've only been buying time through this deal--time to figure out what on Earth to do about a $4 billion patent-expiry problem--and will be doing the usual, un-prize-worthy cost-slashing (the deal's synergies represent a whopping 40% of sales). But what it lacks in headliners it makes up for, we argue, in behind-the-scenes cleverness.

GSK/Pfizer ViiV Healthcare JV: It's not every day that Big Pharmas join forces in an important way. The HIV joint venture between Pfizer and GSK, announced in April, and later labeled ViiV, may be industry's biggest exception. The company combines GSK's and Pfizer's marketed HIV portfolios and pipelines into a standalone with more clout than either party would have individually, helping reduce both sides' cost, and infusing accountability and productivity in a way that only a smaller outfit can. Negotiating the terms wasn't easy, but if this tie-up works, it might not be the last. "If there's another opportunity to do the same thing again with GSK, we'd do it," said Bill Ringo, SVP BD at Pfizer.

Roche/Genentech: With its landmark agreement with Genentech already nearing a sunset, Roche made a preemptive strike, betting it would gain more by owning 100% of sales juggernauts such as Avastin and the ability to slash duplicative infrastructure than it stood to lose if the top talent at Genentech hung up their lab coats. This tie-up isn't about innovation, it's about efficiency. And the acquisition's final price tag--$95-a-share, while certainly a great deal more than the intitial $89-a-share bid price, is more than matched by the likely earnings potential of Genentech's already marketed products. Furthermore, analysts estimate the biotech's mid- to late-stage pipeline more than adequately supplies Roche with a pipeline reservoir through 2016.

tissue paper

Hey everybody.

It's me, Jonah. Guess what? I slept all night again last night. That's two nights in a row. Mommy and Daddy can't believe it when they wake up in the morning and realize that it's the alarm clock waking them up. Now if Mommy could just get in bed before 11:30.

Today was a pretty good day, but I was a little more fussy than usual. Probably teething, Mom thinks. I ate 29 ounces today, but I gushed up about four or five of that. Mom tried six ounces of the soy mixed with just two ounces of the Peptamen Jr. for my first bottle of the day, and apparently I can't handle that either. So it's either a whey protein allergy or lactose intolerance or both. Sigh. Anyway, Mom's not trying the Peptamen again unless I stop eating the soy. But I'm really eating great these last couple of days.

We went to Target today (again). Mommy had some things to return and a few things to pick up. When we got there, before Mom got me out of my car seat, I spit up all down my shirt and pants. Mommy gave up, buckled me back up, and we left. But then she put on her big girl panties, gave her self a pep talk, went through the Chick-fil-A drive-thru for a pick-me-up sweet tea, and we went back. She said something about it being society that says your kid's not supposed to go around covered in vomit and smelling funky. "We're not letting the man get us down," she said. I don't really know what any of that means, but back to Target we went. So just to show Mommy how proud I was of her, I puked all down myself again while we were standing at the return counter. Sorry, Mom.

And tonight Mimi and Papa (Daddy's Aunt Patsy and Uncle Bill) came over to give me my Christmas present.

Guess what they got me???


TISSUE PAPER!


I LOVE me some tissue paper.

Oh yeah, and it came with a cool, squishy, sock dog.

HOORAY!

Mommy says that somebody named Santa Claus is coming in a few days and will bring more tissue paper. We're celebrating about four or five different Christmases this year with different parts of the family. Mom says she better cut down on her photos per gift ratio or it's going to be out of control. She took 14 photos of me opening this one present. She's so silly.

Anyway, that's it for me for now. I'll catch you guys on the 27th.

MERRY CHRISTMAS!

Love,
Jonah

DOTY 2009 Big Pharma Nominee: Roche/Genentech

It's time for the IN VIVO Blog's Second Annual Deal of the Year! competition. This year we're presenting awards in three categories--that's 300% more fake prizes than last year!--to highlight the most interesting and creative deal making solutions of the year. The categories are: Big Pharma Deal of the Year, M&A/Alliance Deal of the Year, and Exit/Financing Deal of the Year. We'll supply the nominations (roughly half a dozen in each category throughout December) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.

Last but most definitely not least, the biopharma voting public would be crazy not to consider the Roche/Genentech tie-up as the Big Pharma Deal of the Year. After all, it's Roche's surprise hostile offer for Genenetech in the summer of 2008 that sparked the mega-merger madness that eventually resulted in Pfizer and Merck's respective take-outs of Wyeth and Schering-Plough. In case you quibble about its eligibility: the deal may have been hatched in 2008, but the wheeling and dealing lasted well into 2009.

True, the deal value isn't as eye-popping as Pfieth. And it doesn't have as much cleverly worded legalese as the Merck/Schering agreement. But the Roche/Genentech deal seems most likely--of the big three mergers at least--to actually work as advertised. And we'd note that up till now the track record on mega-mergers isn't even up for debate. It's been abysmal.

Already heavily diversified into specialty biotech products thanks to its long-time partial ownership of Genentech, Roche doesn't need a transformative deal to move the company to the next level. Nor does it need to buy time a la Merck as it bolsters its pipeline, thanks to ex-US revenues on Genentech products. But it also can't afford to leave 100% of the US oncology market on the table anymore either and the opportunity to take Genentech private allows the company to build itself into a power-house of personalized medicine.

Thus, with its landmark agreement with Genentech already nearing a sunset, Roche made a preemptive strike, betting it would gain more by owning 100% of sales juggernauts such as Avastin and the ability to slash duplicative infrastructure than it stood to lose if the top talent at Genentech hung up their lab coats and gave up their iPhones. (And there’s no doubt some have, including David Schenkhein, Susan Desmond-Hellman, and Art Levinson.)

Is there hope that by acquiring Genentech the Big Biotech's drug hunting prowess will spill over to the Rochies? Undoubtedly. But it's a nice-to-have NOT a need-to-have part of the deal. Despite the clever and very public lexical contortions Roche CEO Severin Schwan gave in discussing this deal--especially in the early and very hostile days of negotiating--this tie-up isn't about innovation. It's about efficiency. Even as FIGs (friends of an independent Genentech) get out their voodoo dolls in protest, we'll state again that the Genentech of 2009 was a far cry from the discovery-oriented scrappy biotech with high growth prospects of yesteryear.

And the acquisition's final price tag--$95-a-share, while certainly a great deal more than the intitial $89-a-share bid price, is more than matched by the likely earnings potential of Genentech's already marketed products. Furthermore, analysts estimate the biotech's mid- to late-stage pipeline adequately supplies Roche with a pipeline reservoir through 2016.

Moreover, it's not as if Schwan and co. haven't worked overtime to preserve the semblance of Genentech's autonomy. The DNA ticker symbol may be gone, but the early R&D group still has a biz dev unit, despite the seeming overlaps that come from having two such organizations under the Roche roof. Thanks to a restructuring of the executive committee that has Genentech's head of R&D Richard Scheller reporting directly to Schwan, Genentech also has extraordinary visibility within the new organization.

So vote for Roche/Genentech for Big Pharma deal of the year. It's a transaction that's got it all: drama (the hostile-then-ultimately-friendly (sort of) offer); high stakes months-long brinkmanship (a lower than expected offer followed by an even lower offer price); and ultimately, a chance of being successful.