Company Analysis - Mergers & Acquisitions
Mergers & Acquisitions in 2009
Until recently, Wyeth was itself in talks to acquire Crucell, a significant vaccine maker with a healthy pipeline of 18, primarily early-stage, anti-infectives, MAbs and vaccines. The acquisition of a small biotech, with a complementary pipeline that could be integrated relatively easily, is a prime example of the recent trend in careful M&A. It was called off, however, in the wake of the Pfizer/Wyeth merger announcement.
It seems where one goes others follow, as Sanofi-Aventis announced its intentions to enter the acquisition game this year. Potential candidates include Bristol-Myers Squibb, with whom Sanofi- Aventis already has a relationship over joint control of Plavix, or Amgen, to broaden its pipeline diversity. The latter would be a huge expense though, and therefore may be out of range. Alternatives include niche companies such as ratiopharm, the 4th largest generics maker in the world, or even Crucell itself, which is as attractive to Sanofi as it was for Wyeth.
GSK is also dabbling in acquisitions once again, but not in the same scale as in the past. At the end of 2008, GSK acquired Genelabs for US$57 million, to boost its early-stage HCV pipeline. Genelabs brought with it six early-stage candidates, and a track record of developing novel classes of inhibitors. GSK is primarily focusing on emerging markets, purchasing BMS' Pakistani operations, and making a bid in January 2009 for UCB's emerging market operations.
Small companies are also merging together, perhaps to find safety in numbers. In January 2009, the Swiss firm Helsinn acquired US-based Sapphire Therapeutics. According to Pharmaprojects' data, Sapphire brought with it three ghrelin mimetics, in preclinical to Phase II development for opioidinduced bowel function, ileus, cachexia and anorexia, while Helsinn has one launched, one Phase II and one Phase I drug, all for chemotherapy-induced side-effects. The Sapphire acquisition clearly adds a complementary section to Helsinn's pipeline, while broadening it. With Pfizer focused elsewhere and therefore not expected to compete for other deals, more small companies may be looking to merge this year.
Perhaps the first sign of another wave of big acquisition deals
actually came back in July 2008, with the hostile takeover bid
by Roche for Genentech. Already owners of 56% of the
company, Roche suddenly bid for the remaining 44%,
although Genentech believed that the bid undervalued the company. This led to battle over share price and valuations of
assets, which is currently ongoing with a showdown scheduled
for March 2009. In recent talks, Roche made it clear that its
patience was running out, and it is not prepared to continue
its existing relationship with Genentech. Roche is aiming for
greater control over Genentech's affairs, which it intends to
get one way or another. Meanwhile, Roche defended itself
against hostile takeover bids by extending a pooling
agreement between majority shareholders, the descendants
of the founding family, primarily to fend off Novartis upping its
33% stake to attempt a merger.
In November 2008, Eli Lilly acquired ImClone Systems, making it a wholly-owned subsidiary. According to Pharmaprojects, ImClone brought four preclinical, two Phase I, two Phase II, one Phase III and one launched anticancer MAb to the table, neatly filling out a niche area of the Lilly pipeline. Lilly now currently has 88 in-house projects launched or in active development. As can be seen in Graph 3, while the majority of the Lilly pipeline is based on chemical compounds, with the ImClone drugs included, it now has a significant contingent of MAbs. Previously it had seven, in development for indications such as MS, arthritis and diabetes. The ImClone purchase gave it a leading oncology franchise in the biotech area, including a successfully launched blockbuster, Erbitux (cetuximab).
