QDIS Blog

The mergers continue! Seems even Pfizer who has gobbled up many company in the past hasn’t had its appetite satiated yet.

Pfizer To Acquire BioRexis - Contract Pharma:

Pfizer will acquire BioRexis, a privately held biopharmaceutical company although no financial details were released. BioRexis is developing drugs for the treatment of type 2 diabetes. BioRexis also has a proprietary protein engineering technology that may be why Pfizer was truly interested in them. Pfizer, like many larger pharmaceutical companies is interested in beefing up their biologicals since these tend to have higher prices and currently no generic competition.

Press Release from BioRexis’ Site
Pfizer to Acquire BioRexis to Access Novel Technology Platform and Early Stage Diabetes Pipeline

Technorati Tags: Pfizer, pharma M&A, pharmaceutical deals, Biorexis

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Anacor has signed a deal with Schering-Plough for a new topical anti-fungal product called AN2690. It is used to treat onychomycosis, a fungal infection of the nail and nail bed that affects about 10 percent of the U.S. population. Under terms of the deal Anacor will be paid $40 million upfront with an additional $10 million in financing from Schering-Plough. Schering-Plough will be responsible for all development costs with Anacor retaining the right to co-promote the drug in the US. Anacor will also receive double digit royalties if it does make it to the market. AN2690 is in phase II clinical trials.

PharmaLive: Anacor Signs Worldwide Exclusive License Agreement With Schering-Plough for AN2690, a New Topical Anti-Fungal Treatment :

What is interesting is the structure of AN2690 shown below.

Not many drugs have a boron atom in them and so it is very interesting. Anacor claims that this compound inhibits a validated drug target and works in a totally unique and unprecedented way.

One of the main problems with fungus of the nail bed is penetration to get at the infection deep down. Other treatments are oral medications and therefore work systemically. Also, Lamsil as well as Sporanox (itraconazole) capsules have had an FDA public health advisory issued warning physicians about adverse hepatic events and an association with congestive heart failure associated with both of these drugs. Definitely not something you want to risk for a simple thickened fingernail of toenail.

Topicals haven’t had a lot of success in this area so it will be interesting to see how this works. Anacor claims AN2690 penetrates 200 times better than the only other approved product. There is definitely interest in this since the market for onychomycosis is a $1.5 billion dollar market.

Anacor also has piblished some data on this compound.
Microbiological Activity Of AN2690, A New Antifungal Agent (pdf)

Other Resources
ANACOR SIGNS WORLDWIDE EXCLUSIVE LICENSE AGREEMENT WITH SCHERING-PLOUGH FOR AN2690, A NEW TOPICAL ANTI-FUNGAL TREATMENT
Schering-Plough Cites Today’s Anacor Agreement as Latest in Series of Deals
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Technorati Tags: AN2690, Anacor, pharmaceutical deals, anti-fungal, Schering-Plough

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Seems even the Japanese are getting into the mega-meger trend. Now Mitsubishi Pharma will merge with Tanabe Seiyaku in a deal worth $4 billion.

PharmaLive: Mitsubishi Pharma Corporation Reaches a Basic Agreement to Merge with Tanabe Seiyaku Co., Ltd. :

Will not large by worldwide standards, this will create Japans 5th largest pharmaceutical company. Just as in the US, there is great pressure to control drug prices and they hope is this merger will make them more competitive world-wide.

Other Resources
Joint Press Conference on the Merger of Tanabe Seiyaku, Co., Ltd. and Mitsubishi Pharma Corporation (pdf)

Technorati Tags: Mitsubishi Pharma, pharma M&A, pharmaceutical deals, Tanabe Seiyaku

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Forbes writer Matthew Herper has a great article outlining why he rationally thinks Bristol-Myers Squibb and Sanofi-Aventis should NOT merge.

Why Bristol And Sanofi Shouldn’t Merge - Forbes.com:

His article makes a lot of sense such as the difference in philosophy with Sanofi still hanging on to the blockbuster drug mentality and BMS being more focused. Also mentioned is that BMS has had a good relationship with the FDA and been able to get drugs approved whereas Sanofi has had their problems. All of this and more makes perfect sense. However, I don’t think sense plays into many mergers. I think that those in favor of mega-mergers have to much invested in making some kind of merger happen especially given the buyout options in some upper managements contracts. Then there is also egos with people who have initiated the deal being blinded to reality and wanted mergers to go through for personal reasons. Humans tend to have a reluctance to being able to walk away from deals that may not be the best. This is often referred to as “sunk-cost”. They have so much invested (usually emotionally )that it becomes impossible to accept facts. What facts are brought to light are brushed aside with justifications.

I think this will likely happen and may even be announced before the end of the year. However, I personally agree with Matthew Herper that it isn’t a good idea.

Technorati Tags: BMS, Bristol-Myers Squibb, pharma M&A, pharmaceutical deals, Sanofi, Sanofi-Aventis

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Although they have announced major layoffs, AstraZeneca is also in a buying mode having said they will pay $150 million for Arrow Therapeutics a privately owned biotech that focuses on anit-virals.

AstraZeneca to buy Arrow Therapeutics - Yahoo! Finance:

Arrows most advanced product is a phase II compound known as RSV604 which targets Respiratory Syncytial Virus which primarily affects infants and those who are immune-compromised. What is interesting is Arrow signed a deal with Novartis for development of this compound back in the summer of 2005 so evidently AstraZeneca is likely more interested in their other earlier stage products. At least in this case, they are acquiring the company to concentrate their efforts on a given therapeutic area rather than just to add any old drug to the pipeline.

Two thoughts come to mind in regard to this story. First, I think companies need to have a focus and concentrate their efforts on certain therapeutic areas where they have expertise. The days of having a vast array of widely differing therapeutics I think are gone.

Second, especially for anti-infectives, I think many smaller companies working in this area will become prime targets for larger pharma. As bacteria become more resistant to commonly used drugs, there will be a growing need for new antibiotics. Also, many big pharma companies have gotten rid of their anti-infectives groups and the expertise seems to me to be more concentrated in smaller up and coming companies. Once it gets to the point were anti-infectives are seen as profitable again, you will see more acquisitions of this sort. However, I don’t see the markets reaching the point anytime soon.

Other Resources
AstraZeneca Acquires Arrow Therapeutics To Broaden Anti-Infective Capabilities (press release)

Technorati Tags: antibiotics, AstraZeneca, Arrow Therapeutics

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