Aerie’s Upcoming Catalyst – ROCKing The Way To Success – Bioassociate’s latest for Seeking Alpha

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Bioassociate for Seeking Alpha - Aerie's Upcoming Catalyst - ROCKing The Way To Success

Bioassociate just published a Seeking Alpha article about Aerie Pharmaceuticals (AERI) - a clinical-stage drug development company rapidly establishing itself as a key player in the novel class glaucoma drugs called the Rho Kinase (ROCK) inhibitors. With innovation in the glaucoma market silent for over 20 years, Aerie’s lead candidates Rhopressa and Roclatan are leading the race towards a very hot market niche in one of pharma’s fastest-growing therapeutic sectors.

Rhopressa is a triple-action, once-daily ROCK/norepinephrine transporter (NET) inhibitor eye drop, and Roclatan is a combination therapy of Rhopressa and the commonly prescribed glaucoma drug, latanoprost [Pfizer’s (PFE) Xalatan]. Aerie is set to commence the Rhopressa phase 3 program in early Q3 2014 with an expected launch in 2017, and Phase 2b results for Roclatan are due to be announced shortly (late June-early July).

To continue reading on Seeking Alpha, click here.

BreedIT – Breeding The Next Generation Of Medical Marijuana – Bioassociate Latest for Seeking Alpha

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Bioassociate for Seeking Alpha -BreedIT - Breeding The Next Generation Of Medical Marijuana

Bioassociate recently published a Seeking Alpha article about an Israeli company quickly establishing itself in the heart of the medical marijuana space.

BreedIT (OTCQB:BRDT) was established just a year ago and has been actively popping up on the agendas of investors watching marijuana stocks.

Medical marijuana stocks have outperformed the market by a whopping 300% over the past year, and with cannabis investing still promising, albeit steadily more serious, medical marijuana trade enthusiasts are on the lookout for the next CBIS or GWPH.

BreedIT boasts an impressive team with decades of experience in agronomy, horticulture and plant genomics, whose members include Prof. Haim Rabinowitch- the inventor of the cherry tomato found on most supermarket shelves today, and Dr. Ben Zion Weiner - the ex-chief research officer of Teva Pharmaceuticals.

To continue reading on Seeking Alpha, click here.

Over-Skepticism: 3 Biotech Companies Trading Too Close To Their Cash – latest Bioassociate for Seeking Alpha

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Bioassociate for Seeking Alpha - Over-Skepticism: 3 Biotech Companies Trading Too Close To Their Cash

Bioassociate’s latest article for Seeking Alpha  presents three public biotech companies whose market cap appears to be close to the amount of cash the companies hold, suggesting skepticism amongst investors as these companies are approaching significant catalyst events.


The recent sell-off in the biotech sector resulted in several companies with market caps very close to their cash levels. Three such companies that have near-term catalysts are reviewed:
Ambit Biosciences, which develops Quizartinib – a FLT3 positive AML drug in phase 3.
Conatus Pharmaceuticals, which develops Emricasan as a treatment for a variety of liver diseases and is currently running three phase 2 studies.
Targacept, which develops neuronal nicotinic receptor modulators for the treatment of Alzheimer’s disease and overactive bladder.

Continue reading on Seeking Alpha.

InterMune Is Set To Outperform Its Main Competitor – latest Bioassociate for Seeking Alpha

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Bioassociate InterMune Is Set To Outperform Its Main CompetitorBioassociate’s latest article for Seeking Alpha discusses how the possibility of approval of Boehringer Ingelheim’s nintedanib – the main competitor of InterMune’s (ITMN) pirfenidone (Esbriet) – might affect the sales of pirfenidone in the US.

Pirfenidone is an orally active, small molecule drug currently seeking approval from the FDA for the treatment of idiopathic pulmonary fibrosis, a progressive and fatal lung disease. Esbriet is already approved and marketed in 29 European Countries and in Canada. The drug is also marketed under the trade name Pirespa in Japan and South Korea by Shionogi & Co.

Pirfenidone is not yet approved in the United States but hopes are running high that the additional Phase III ASCEND study InterMune is currently conducting will satisfy FDA demands and the drug may finally reach US shores by as soon as mid-2015.

In Brief: Esbriet has demonstrated solidly good efficacy results in previous clinical trials. With zero drugs treating the chronic and fatal IPF on the market, the benefit Esbriet provides to patients is an automatic improvement over the current situation, giving ITMN an almost sure chance of commercial success upon approval. The only threat faced by Esbriet is from other drugs currently in development. Esbriet’s only late-stage competitor is Boehringer Ingelheim’s (BI) nintedanib, which completed its latest Phase III clinical trials in October 2013 but has yet to report results. In Phase II trials nintedanib failed to demonstrate a statistically significant clinical benefit over placebo across several endpoints, and the company has recently registered new Phase III trials with altogether new endpoints. As a private company, BI is not obliged to publish nintedanib’s PhIII study results, but, despite the company’s covert behavior, rumors have circulated that nintedanib performed well in the pivotal INPULSIS-1 and INPULSIS-2 Phase III trials and is en route to FDA approval by mid-2015.

Even if nintedanib is approved by the FDA, the orphan IPF market is large enough to accommodate both pirfenidone and nintedanib without significant hindrance to each other. Considering the anticipated price of Esbriet and the size of the IPF market in the U.S., even in the pessimistic scenario in which Esbriet secures only a quarter of the potential IPF market, its US sales will still exceed $500 million annually.

Continue reading on Seeking Alpha

Bioassociate Reiterates BUY Recommendation on RedHill Biopharma

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Redhill biopharma Feb 5  2014 Update ThumbnailIn a report published on February 9, 2014, Bioassociate reiterated a Buy rating on RedHill Biopharma (NASDAQ: RDHL) (TASE: RDHL.TA), and set an ADS price target of $18.1. The report contains a detailed discussion of RedHill’s pipeline advancements during the preceding months and adjusted cash flows.

The Update Report is available at:

In the report, Bioassociate noted, “RedHill Biopharma has initiated late-stage clinical studies in the company’s two leading programs – RHB-104 for the treatment of Crohn’s Disease and RHB-105 for eradication of H. Pylori. In addition, the submission of the RHB-102 NDA is expected by the end of Q1 2014. The RHB-103 program’s FDA approval will be delayed by a few months following a request by the FDA for additional CMC information. Importantly, in January 2014, RedHill completed three Private Placements of shares/ADSs for an aggregate gross amount of $20.2 million, ensuring sufficient funding of the company’s operations until the end of 2015. Given the latest advancements, we reiterate our BUY recommendation and our target price of $18.1 per RedHill ADS.”

Biotech & Pharma 2013 Licensing & Partnering Activity Review: Diminishing Upfronts, Increasing Platform Licenses Indicate Stronger Risk Aversion among Big Pharma

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Let’s face it: everyone finally realized that Pharma’s traditional business model was only as good as the piles of money thrown at it every year. Now that players are feeling the pinch of financial crises and therapeutic droughts, some ingenious dynamics are beginning to play out on the dealmaking landscape. And to begin with, the bulky, disincentivized and unproductive in-house R&D monster is going away forever, leaving behind a legacy of chronic phobia of go-it-alone risky drug development ventures.

So what is replacing the cumbersome in-house R&D? Risk-diluting options are. Although strategies which lower risk by sharing or buying options in clinical programs were already visible in 2005, it wasn’t until the financial burden of the most recent patent cliff that companies really had to implement ways of doing more with less.

Nowadays, in-house clinical projects bear a higher financial risk than ever before


Commitment to traditional in-house drug development model played out all-or-nothing scenarios, where losses were compensated by an abundance of therapeutic targets. But times have changed. Me-too drug niches are saturating at cosmic speeds, which is a clear indicator that emergence of novel disease targets through basic science is simply not up to speed with industry demands.

Then there’s the dollar-per-approval conundrum: R&D spend has increased with vicious speeds over the last decade, with little growth in the number of approved drugs to show for it (save for 2012 – see fig. 1). Most people would have considered the pharmaceutical industry a pull market, but here, too competition has become another vice, and another major risky step in development to worry about.

Not only do collaboration lower risk and allow companies to embark on more projects, they also ensure that companies are not competing for the same disease niche. Patent exclusivity times no longer serve as the ultimate protection of the drug’s market when there can be up to 10 molecules developed for the same disease target at any given time.

Last year Vertex Pharmaceuticals, for example, had to completely sell off its Incivek (telaprevir) Hepatitis C business after revenues of the drug dropped to zero upon expectation of AbbVie’s and Gilead’s oral competitors. Telaprevir was approved only a year prior to its abandonment, having earned Vertex just under $1 billion in total sales.

All of this boils down to immensely increased financial risk per each drug in development. Because most Big Pharma are becoming acutely cash-aware, new business strategies are much more about risk than gains.

Figure 1. Total spend on drug development vs. number of New Molecular Entities (NMEs) and Biologics License Applications (BLSs) approved each year by the U.S. Food and Drug Administration

Bioassociate Pharma 2013 Partnering and Licensing Review R&D spend vs number of NMEs approved annualSource: EP Vantage 2013 and FDA website

Risk is lower together


Nowadays, even when companies choose to outsource the bulk of their pipeline, projects are co-developed with service providers, utilizing risk-diluting and reward-sharing milestone programs. And, amidst what seems like a decade-long criticism of pharma’s secretive nature, the veil of R&D isolationism has suddenly lifted to uncover a series of Big Pharma dating exercises in the form of actual 50-50% pipeline collaborations and data sharing agreements.

Traditional licensing, where a company acquires clinical assets at any stage of development and assumes all further responsibility and cost, is playing out a very visible downward trend. Popularity of traditional licensing has dropped by nearly 10% in just 5 years, while collaborations which assume shared responsibility and rewards increased by 15% (fig. 2).

Figure 2. Collaboration vs License purchases as % of year’s total, 2007-2012

Bioassociate 2013 Pharma Review Partnering and Licensing Activity Basic License Collaboration trends 2007 - 2012Basic License: Buyer assumes all development responsibility with one-off upfront payment and optional royalties Collaboration:  Shared responsibilities on all or a portion of the drug’s development; shared rewards

Source: Suzanne Elvidge, 2012


Options in the form of success-dependent milestones or pipeline insurance deals are becoming more popular


 Collaborations are overtaking one-off license purchases as they allow for lower up-front payments and hedge risks of failure into success-dependent milestones. In M&A exits, too, upfront payments as proportion of total deal value have been on a significant decline (fig. 3), indicating that acquirers are diluting risk through future options and milestones are now holding more and more of the value.

Figure 3. M&A Upfront payments, total deal value and upfront payments as % of total deal value, 2005 -2012

Bioassociate 2013 Pharma Review Partnering and Licensing Activity M&A upfront payments vs total deal value 2005 - 2012Source: Silicon Valley Bank

For public companies, options in the form of Contingent Value Rights (CVR) stocks seem to be more and more populous on exchanges. CVRs are “a type of right given to shareholders of an acquired company (or a company facing major restructuring) that ensures they receive additional benefit if a specified event occurs. A contingent value right is similar to an option because it often has an expiration date that relates to the time the contingent event must occur” –

Most recently Cubist issued CBSTZ for Obtimer shareholders – the stock will pay out certain dollar per share if Optimer’s Dificid sales targets are met. Meanwhile Sanofi-Genzyme’s Lemtrada-approval-dependent GCVRZ might have actually played out Wagner’s “Ride of the Valkyrie” in the unpredictable days between a negative FDA review and a final approval:

Bioassociate Sanofi CVR GCVRZ



2013 Collaborations, Co-Developments and Licenses: Top 50


Table 1 has some of 2013’s top licensing, co-development, collaboration and general partnership deals. (Clicking the image will open a PDF file)

Bioassociate 2013 Pharma Review Partnering and Licensing Activity Top 50 License, Collaboration and Partnering deals

Development Stage


Figure 4 shows the development stage segmentation of last year’s largest licensing and collaboration deals.

The majority of the top 50 largest licensing deals of 2013 involved molecules in Phase II stage of clinical development. Platform technologies which granted companies access to novel methods of drug development, screening and synthesis were the second most popular target of licensing and collaboration.

Platforms are perhaps the most effective way of capitalizing on investment as they may cover several projects at a time, thereby yielding the highest probability of success – which explains their rising popularity for discovery and preclinical projects. For instance, the $1 billion Gilead-MacroGenics collaboration is a prime example of efficient risk hedging. The deal will provide Gilead with access to the MacroGenics’ Dual‐Affinity Re‐Targeting (DART) technology on up to four cancer projects, totaling a reasonable $250 million per oncology lead with zero upfront fees.

Figure 4. 2013 and 2012 top 50 Pharma licensing and collaboration deals by stage of development

Bioassociate 2013 Pharma Review Partnering and Licensing Activity by Stage of Development


Therapeutic Area


 In 2013, cancer became an even more popular target of licenses and collaborations than in 2012. 42% of all top partnership deals were in the area of oncology, in contrast with 37% in 2012 (fig. 5). This was followed by Central Nervous System (17%) and Autoimmune Disorders (15%). Alzheimer’s and Parkinson’s disease were the most targeted CNS disorders in 2013.

Figure 5. 2013 and 2012 Pharma partnerships, collaborations and licenses by therapeutic area


Bioassociate 2013 Pharma Review Partnering and Licensing Activity by Therapeutic Area

Financials: Commissioning Success


In 2013, the top 50 collaborations, partnerships and licenses cost an average of $99 million in upfronts and $641 million in total deal values.  The largest upfront ($1130 million) was a traditional asset acquisition. It was paid by Aspen to GSK for the company’s two divested thrombosis brands, Arixtra and Fraxiparine, both of which are marketed.

The lowest upfront payment ($0 out of a total deal value of $1150 million) was made to MacroGenics by Gliead following 9-month negotiations. The deal covers MacroGenics’ Dual‐Affinity Re‐Targeting (DART) technology which produces dual specificity “antibody-like” therapeutic proteins capable of targeting multiple different epitopes with a single recombinant molecule.

Unsurprisingly, upfronts in 2013 were directly proportional to the stage of development. Platform technologies were worth an average of $46 million in upfront payments, while marketed and Phase III products cost an average of $355 million in upfronts.

Deals are increasingly shifting towards long tail royalties and earn-outs at the expense of larger upfront payments. Combined with the fact that a large portion of licensing deals are signed for products in early development stage, it seems that pharma companies aim at starting deals earlier, with less upfront payments, and share the risk with their partners. In other words, when it comes to licensing agreements, it looks as if Big Pharma’s strategy is going for many small deals, rather than a few big ones.

The presence of zero upfront payments in 2013 is likely to be shortly setting the trend of “commissioning” success in Pharma and diluting all risk in future success.

Bioassociate on the cover of Drug Discovery World

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Bioassociate Julia Skripka Serry Drug Discovery World CNS Therapeutics Great Neuro-Pipeline Brain DrainBioassociate’s article showcasing the latest Big Pharma CNS pipeline failures  was recently featured on the cover of Drug Discovery World.

Central Nervous System (CNS) disorders bear an economic burden of more than $2 trillion in the US and EU and rake in upwards of $80 billion a year for the pharmaceutical industry. Yet they have become as much a vice as a potential virtue. A novel Alzheimer’s disease (AD) medication bears every promise of outshining the likes of Lipitor in blockbuster status, but its chances of reaching the market are also nearly 50% lower, and development costs 30% higher, than those of its cardiovascular counterpart.

The high risk and low approval rates of drugs targeting diseases such as Alzheimer’s, Parkinson’s, depression, anxiety, schizophrenia and stroke have sent billions of dollars down the drain in recent years. This prompted many Big and Small pharma to significantly downsize chemical drug development and to explore other options of tackling brain disorders.

Request a free PDF copy of DDW or read the web article (without graphs/images) here.

2013 Biotech & Pharma IPO Review – Most Popular Therapeutic trends, Trending Clinical Stages and post-IPO Winners & Losers

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See this article with Live Stock Charts on our Blogger page here

2013 was generally a good year for the markets (and underwriters!). The S&P 500 is up 26% on this time last year, with the NASDAQ composite running slightly higher at 30% – but not even close to the stellar 56% performance of the Biotech Index (fig 1). In fact, few events in other industries could compete with the Great Biotech IPO Fever of 2013, when the IPO conveyor belt went full overdrive, churning out an average of four biotechs a month into the public domain.

Figure 1. Performance of the NASDAQ composite Index, the S&P500 and the NASDAQ Biotech Index, Dec 11, 2012 – Dec 11, 2013

nasdaq biotechnology index sp500 nasdaq composite

Table 1. Biopharmaceutical IPOs on the NASDAQ in 2013

 Click here for PDF Text Version of This Table: Biotech and Pharma IPOs of 2013

Bioassociate 2013 IPO Review Biotech Pharma by share price and lead product

For some companies, dreams of public markets did not materialize this year. Some companies have postponed going public as the markets no longer seem favorable this year, whilst others have withdrawn IPO filings altogether. Table 2 has queued, postponed and withdrawn IPOs.

Table 2. Queued, postponed and withdrawn IPOs

Click here for PDF Text Version of This Table: Bioassociate 2013 biotech and pharma IPOs queued postponed and withdrawn IPOs

Bioassociate filed, withdrawn postpones IPOs biotech pharma 2013

Stage of Development

PhII and PhIII products constituted an equally shared majority of this year’s IPOs’ products (fig. 1), as one of the Phase III products already failed in clinical trials (Prosensa’s disapersen). 9 of the leads in 2013 were already marketed products, and one somewhere in between—the yet-unapproved Omthera’s (now AstraZeneca) Epanova is anticipating an FDA verdict on May 5th.

There were no pre-clinical lead players in the 2013 IPO frenzy, unlike the two – Verastem and Regulus—seen in 2012. However, the non-negligible portion of 5 Phase I leads appears to show that going public for earlier-stage companies is certainly trending, although not excelling – see below.

Figure 1. Development stages of lead products of companies which had an IPO in 2013

Bioassociate 2013 IPO review by lead clinical stage of development

Best performing clinical stage

As one would expect, market interest is very visibly deterred by perceived clinical development risk. Development stage is directly proportional to the performance of the company’s stock post-IPO, and 2013 was no exception (Fig. 2). Companies with leads in PhI have performed at an average of just +5% since opening day, whilst marketed products in contrast performed at t 87% – thanks to some major stars like Insys and GW Pharmaceuticals.

Figure 2. Average performance of 2013 IPO Companies’ lead products by stage of development

Bioassociate 2013 IPO review post-IPO performance by clinical development stage of lead product

Therapeutic Area

The most popular therapeutic area of leads whose companies went public in 2013 was, by a large margin, cancer – no surprises there (fig. 3). The popularity of this therapeutic area resonates in other 2013 pharma activities, such as Mergers and Acquisitions and Drug Approvals. With a higher chance of success, CNS would have long been the therapeutic area of choice, but pharma and biotech are seemingly shying away as chances to trial success are now extremely low (with the exception of pain).

A novel therapeutic area in this year’s IPO landscape was pet therapeutics (which will probably be gaining popularity in the near future). Meanwhile, ophthalmology is a quickly expanding therapeutic field, mainly aimed at eye disorders in the growing elderly population.

Emerging trend in biomarkers & other diagnostic tools

Novel diagnostic tools took second place in this year’s therapeutic area popularity rankings, comprising 11% of 2013 IPO leads. Biomarkers and novel indicators of hard-to-detect disease, or disease which needs to be detected in its early stages, such as Alzheimer’s, are a quickly emerging trend – not just for diagnostic purposes in hospital settings, but as useful tools which would help companies better define concrete endpoints in clinical trials.

Many failed CNS drugs of recent years, for instance, have failed to demonstrate efficacy based on endpoints which many have deemed far too ambiguous (cognitive improvement based on verbal memory/performance tests, etc).  In fact, it is likely that the massive potential of CNS will only explored again when better metabolic and/or genomic markers are present – firstly, to signal the presence of disease decades before it manifests, and secondly, to eradicate the destructive ambiguity of questionnaire-type clinical trial design.

Bioassociate 2013 biotech pharma IPO review IPOs by therapeutic area

Best and Worst Performing Therapeutic Areas

So far, hematology, CNS and pet medicine players are the best performers of this year’s IPO cycle. The worst performers are orphan and genetic diseases, with a -44% average since first trade.

See this article with Live Stock Charts on our Blogger page here

Rising Stars

Some of the brightest stars in this year’s IPO group were perhaps unexpected, particularly because two of them – Alcobra Pharma and GW Phrarmaceuticals are foreigners, hailing from Israel and the UK, respectively. 

Rather suspiciously, the markets were particularly interested in the “weed experts” Insys Therapeutics (INSY) and GW Pharmaceuticals (GWPH), which specialize in opioid and cannabinoid marijuana-derived therapeutics for cancer pain and nausea management. Unlike the majority of IPOs this year, both companies already had products on the market prior to IPO. Insys has had everyone talking with a 564% surge in just 5 months, from an opening price of $8.50 on May 2nd all the way up to $53.64 in October. GW Pharmceuticals is up 264% since its debut in May, having hit a peak performance of 338% in November. Two more opioid developers are due to join GW and Insys soon: Cara Therapeutics and the Danish Egalet have both filed for IPOs in Nov/Dec.

Update: On Dec 13th Insys Therapeutics received a subpoena from the Office of Inspector General of the Department of Health and Human Services in connection with an investigation of potential violations involving Health and Human Services programs. Insys stock plunged by 22% intra-day.

Another rising star is Aratana Therapeutics (PETX) – one of the first ever developers of specialty medicines for pets (primarily cats and dogs). Aratana’s $6 IPO share price was below its expected $11-13 range, as the company’s unfamiliar business model may have caught some investors off guard. Having conveyed the massive, untapped and much-too-long ignored potential of the pet market, the PETX share price has now been steadily climbing, currently up 129% since it started trading. Despite the fact that pet owners spent $53 billion in 2012 on their animal companions (according to Aratana’s website), pet drugs are still mostly dose-adjusted drugs prescribed for humans. Aratana’s business model is centered around licensing drugs proved effective in animals and humans, and commercializing them through the FDA’s Center for Veterinary Medicine (CVM). The cost of licensing Aratana pays is low in comparison to potential returns, and CVM regulatory pathways are obviously less stringent than pathways regulating human drugs. Aratana is currently advancing three pet drugs through their pipeline, and it shares soared on October 14 when the company announced its intention to acquire Vet Therapeutics, Inc.

Entanta Pharma (ENTA) is another starlet worth watching – the company is now at +111% on its first-trading-day price as its Hepatitis C drug ABT-450, co-developed with AbbVie, and is getting encouragingly close to the market following some great results of its Phase III Sapphire-II trial. ABT-450 is part of an antiviral  cocktail shown effective in treating an amazing 96% of the most common genotype 1 HepC sufferers who have not responded to older treatments. Enanta’s drug is seen as one of the most threatening contenders to the throne of new, safer and more effective HepC medications – a throne currently being conquered by Gilead with Sovaldi, approved just last Friday (December 6th). Like Sovaldi, ABT-450 received a Breakthrough Therapy Designation (BTD) from the FDA, which shortens development and paperwork times. ABT-450 is thus looking at a New Drug Application (NDA) in Q2 2014, and a Prescription Drug User Fee Act (PDUFA) date of 3-4 months later.

Alcobra Pharma (ADHD), based in Israel, is the newest entrant to the Attention Deficit Hyperactivity Disorder (ADHD) scene, dominated by drugs like Ritalin, Concerta, Vyvanse and Strattera. Alcobra’s lead compound, MG01CI, is an extended-release version of metadoxine – a hepatoprotective drug which has been on the market for nearly 30 years for the treatment of acute alcohol intoxication, alcoholism and alcoholism-related fatty liver.  Although MG01Cl is not a novel compound, it has a crucial advantage over its “black box warning competitors” in that it is not a neurostimulant based on methylphenidate or amphetamines. In addition, having been tried and tested for 30 years now, metadoxine has a significantly better side effect profile than other ADHD meds – an important factor for a medication intended to be taken daily for many years.

An encouraging sign of buyout potential for Alcobra is the fact that New River Pharmaceuticals, the original developer of Vyvanse – now an $800-million-a-year modified version of Adderall, was bought by Shire in 2006 for $2.6 billion. New River was a company roughly comparable to Alcobra, and was acquired when Vyvanse was in Phase III clinical trials. Shire and New River were already in collaboration on the drug since Phase II,

Falling comets

The Dutch Prosensa (RNA), developing disapersen for the treatment of Duchenne’s muscular dystrophy in collaboration with GlaxoSmithKline, announced that the drug did not meet its primary endpoints in Phase III clinical trials, just two months after the company began trading. Prosensa’s share price tumbled on the news, and is currently hovering at -78% on first trading price. Several investors are holding on, as Prosensa has two more drugs in the pipeline, which are, however, based on the same RNA Exon-skipping idea as disapersen.

2013 Pharma M&A Review: Earlier-Stage Pipelines, Lower Premiums, and Cancer

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Pharma M&A 2013 review

2013 will go down in history as the year of biotech IPO frenzy, but some may also know it as the year dealmaking bounced back to fertile levels. In 2012, $109 billion was spent on biopharma and medical device M&A, with only one deal exceeding the $10 billion mark, in contrast with four in 2011. In 2013, three $10+ billion megadeals have been struck, which include Amgen’s $10.4B takeover of Onyx and Thermo Fisher’s $13.6 billion takeover of Life Technologies.

Overall, pharma, biotech and medical device M&A deals have continued to outpace the global market, according to Dealogic. Whilst the global M&A scene performed only 9.3% on last year, pharma deals are up 38%. The average deal volume is 15% up on last year, with the total standing at over $141 billion. So far, there have been 225 biopharma, diagnostics and medical device deals, 14 of which exceeded the 500million+ mark in 2013.

The most voluminous mega-deals of the year were in medical device and diagnostic sectors, as pharmaceutical players have opted for less pricey earlier-stage acquisitions. In terms of numbers, however, biotech has certainly outshined the rest, accounting for 76% of all Pharma, Medical and Biotech (PMB) sectors, according to a recent report by Mergermarket.

Unlocked Pharma Cash

Post-patent-cliff in-house R&D closures are unlocking substantial deal-ready cash for Big Pharma. After several years of pawning, re-organizing and sorting out previous acquisitions the giants entered 2013 with cash, strategy and malnourished pipelines, braced for more inorganic growth. Whilst mega-M&A activity of recent years has been filled with power play and consolidation activities, 2013 was more about pipeline acquisitions and occasional foreign market entries.

Below (table 1) is a list of the year’s most prominent acquisitions:


Table 1. Top 2013 Biopharma deals






Pipeline interests





Liver, kidney, breast, colorectal, thyroid cancers





Alzheimer’s, bipolar, Down syndrome, Multiple Sclerosis, Crohn’s disease




Warner Chilcott

Seven pipeline products in women’s health and Urology





Five investigational antiviral products





Four investigational gastrointestinal products



Endo Health

Paladin Labs

Gastroenterology and growth in Canadian and emerging markets




MAP Pharma

Migraine specialty





Seven oncology products



Cubist Pharmaceuticals

Trius Therapeutics

Antibiotic-resistant gram-positive antibacterials





Novel drug delivery platforms

650 (+350 milestones)


Johnson & Johnson

Aragon Pharmaceuticals

Phase II prostate cancer lead, milestone subject to FDA approval

560 (+590 milestones)



Pearl Therapeutics

Chronic respiratory diseases



Cubist Pharmaceuticals






Omthera Pharmaceuticals

Cardiovascular: fish oil – derived medicines




Obagi Medical Products

Specialty skin health products




AOP Orphan

Orphan diseases





Genetic vaccines










Lymphoma drug mechlorethamine gel, deal subject to FDA approval, which was granted in August

225 (+275 milestones)


Medimmune (AstraZeneca)


Cancer and autoimmune diseases





Targeted Secretion Inhibitor (TSI) in development for treatments of cancer, neurological, endocrine and inflammatory disorders

200 (+240 milestones)


Medimmune (AstraZeneca)


DNA sequence targeted agents for cancer

200 (+470 milestones)


Clovis Oncology

EOS (Ethical Oncology Science)





Targeted Therapies business of Nordion

TheraSphere targeted technology for cancer treatment




Microdose Therapeutx

Seven respiratory, constipation, COPD and auto-immune pipeline products









S.A. Uteron

Women’s health

140 (+334 milestones)


The Medicines Company

Rempex Pharmaceuticals

Gram-negative antibiotic resistant anti-bacterials





Respiratory disorders




Development Stage

2010 and 2011 M&A landscapes were characterized by late- and marketing-stage pipelines, in line with pharma’s pressing need to compensate for immediate patent cliff losses. In 2012, earlier-stage shifts became apparent with 42% of acquired products in Phase II clinical trials. In 2013, Phase III products marked a nearly 10-fold comeback, whilst the number of market-stage acquisitions remained virtually unchanged from last year (Fig. 1). Early-phase and pre-clinical leads remained a popular acquisition choice in 2013. Roughly two thirds of early-stage deals included some form of approval-dependent milestones.


Figure 1: Development stage of acquired products in 2013 and 2012 


2013 M&A acquisitions by development stage Bioassociate

Therapeutic landscape

Oncology remained the most popular acquisition area in 2013, growing in popularity nearly 35% on last year, in line with increasing global incidence (fig. 2). However, CNS disorders, which still appear to be the most lucrative therapeutic area in terms of numbers and unmet need, accounted only for 7% of acquisitions in 2013 (down 10% from 2012), following a series of loud and painful CNS trial failures in recent years. Rather than embarking on high-risk CNS trials, pharma players have this year opted for new therapeutic entrants, such as novel drug delivery systems, women’s health, and orphan specialists. In comparison with 2012, when cardiovascular leads accounted of 12% of all acquisitions, 2013 saw virtually no activity in this area, with the exception of AstraZeneca’s acquisition of the fish oil specialist Omthera.

Another strong comeback was made by the infectious diseases niche, growing nearly 3-fold in 2013. For the most part, drugs in this area are targeting the unmet need for effective treatments against antibiotic resistant bacteria, particularly gram-negative bacteria. Vaccines and anti-viral agents remain highly coveted.

Ophthalmic acquisitions have made a surprising comeback in recent years, due to increasing incidence of eye disorders in the world’s ageing populations. They have accounted for 4% of all acquisitions in 2012 and 2013.

Figure 2:  Therapeutic area of acquired products in 2013 and 2012 

2013 M&A acquisitions review by therapeutics area Bioassociate


Of the top 28 biopharma deals shown in Table 1, 12 of the acquisitions were public companies, 15 were private and one was a divested unit. In terms of premiums paid by public companies, the average premium figure for 2013 was 37% – significantly lower than the 52% average of 2012, pushed up by the Bristol-Myers – Inhibidex 163% acquisition – the highest premium paid in five years. 2013’s highest premium was 89% in the year’s most expensive Amgen-Onyx deal, followed closely by the 88% AstraZeneca – Omthera acquisition deal. It will be interesting to watch happens to the premiums of the graduating IPO class of 2013.

Will Human Memory Chips Change the World? – Latest by Bioassociate CEO Dr Ofir Levi for Israel Brain Technologies

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In his latest article about the possibility of schools-on-a-brain-chip Dr Levi discusses the existing research and technologies which are steadily making this vision a reality. Below is an introduction to the latest article:

Hate studying? Fret not. Looking for a “Get Smart Quick Scheme?” Look no further. Implantable human memory-on-a-chip is a distinct possibility for the future.

Imagine conversing in fluent Mandarin without ever having heard the language. Imagine fending off an attacker with a series of well-placed chops and kicks worthy of a martial arts grandmaster, though you never even acquired your white belt.

Sound like a sci-fi thriller? In the not-so-distant future, it might become a reality.

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