mna deals 2009 review os ii

8/14/2019 MnA Deals 2009 Review Os II

1/7

009PharmaBio M&A Deals 2ummary collection of various internet sourcesS

02.02.2010

os


2/7

PharmaBio M&A Deals 2009

page 2

CONTENT M&A ACTIVITY IN 2009 ............................................................................................................................ 3

ABBOTT ADVANCED MEDICAL OPTICS, US$1,300M ......................................................................... 3

BMS AND MEDAREX $2.4B ............................................................................................................... 3

DAINIPPON SEPRACOR ...................................................................................................................... 3

GILEAD CV THERAPEUTICS ................................................................................................................ 4

GLAXOSMITHKLINE AND BRAZIL $2.2B ............................................................................................. 4

GLAXOSMITHKLINE AND STIEFEL LABS $3.6B ................................................................................... 4

JOHNSON & JOHNSON COUGAR BIOTECHNOLOGY ......................................................................... 4

LUNDBECK OVATION ......................................................................................................................... 4

MERCK AND SCHERINGPLOUGH $41.1B .......................................................................................... 5

NOVARTIS AND ALCON $28.1B ......................................................................................................... 5

ONYX PROTEOLIX .............................................................................................................................. 5

PFIZER AND WYETH $68B ................................................................................................................. 5

ROCHE AND GENENTECH $46.8B ...................................................................................................... 5

ROCHE AND PTC THERAPEUTICS $2B ............................................................................................... 5

SANOFIAVENTIS CHATTEM .............................................................................................................. 6

SANOFIAVENTIS AND MERCK $4B ................................................................................................... 6

TPG IMS HEALTH ............................................................................................................................... 6

VARIAN AGILENT ............................................................................................................................... 6

WARNER CHILCOTT AND P&G $3.1B ................................................................................................ 6

WATSON ARROW GROUP ................................................................................................................. 6

SOURCES: ................................................................................................................................................. 7


3/7


page 3

M&A ACTIVITY IN 2009 In 2009, the landscape of mergers and acquisitions (M&As) by the top 50 pharmaceutical companies (ranked by sales in 2008) was dominated by mega mergers, with three deals exceeding the US$40 billion mark.

PfizerWyeth ($68 billion), RocheGenentech ($47 billion) and MerckSchering Plough ($41 billion).

From a strategic perspective, it is clear that the need to fill development pipelines is still a key driver for acquisitions for example,

in June 2009, BristolMyers Squibb acquired Medarex for $2.4 billion, gaining control of Medarexs clinicalstage oncology portfolio and its Ultimab antibody development technology.

Market expansion was also a major driver of acquisitions in 2009

The most active company in this area was SanofiAventis, which spent more than $3 billion on three deals to expand its presence in India, Mexico and Brazil.

However, other companies were not so successful in their M&A activities in 2009.

For example, CSL and Astellas Pharma failed in their bids to acquire Talecris and CV Therapeutics, respectively.

ABBOTT ADVANCED MEDICAL OPTICS, US$1,300M

The acquisition of AMO enhances and strengthens Abbott's diverse mix of medical device businesses and gives it a leadership position in the large and growing eye care market. Abbott Medical Optics holds the number one position in LASIK surgical devices, the number two position in the cataract surgical device market and the number three position in contact lens care products. The final step in the acquisition process was a short form merger of Rainforest Acquisition Inc., a wholly owned subsidiary of Abbott, with and into Advanced Medical Optics, Inc. As a result of the merger, all outstanding shares of AMO common stock not tendered in the cash tender offer (other

than those as to which holders properly exercise dissenters rights) were converted into the right to receive $22 per share in cash,

without interest and subject to any required withholding taxes.

BMS AND MEDAREX $2.4B

Summary: Anxious to beef up its pipeline as it braces for Plavix to go off patent, BristolMyers Squibb struck a deal in July to buy Medarex for $2.4 billion. The crown jewel of the deal was

ipilimumab, a late stage cancer therapy being advanced as a new treatment for metastatic melanoma. The monoclonal antibody also turned in impressive results for prostate cancer and is in testing for lung cancer as well.

DAINIPPON SEPRACOR

September 2009 Acquisition Headline value: $2,600m Definitive agreement pursuant to which DSP will acquire Sepracor for approximately $2.6 billion through a cash tender offer of $23.00 per share, followed by a


4/7


page 4

merger to acquire all remaining outstanding Sepracor shares at the same price paid in the tender offer. The tender offer price represents a 48.0% premium to Sepracors average stock price over the last six month period ending on September 1, and a 27.6% premium over the closing price of Sepracors common stock on September 1, 2009.

GILEAD CV THERAPEUTICS

March 2009 Acquisition Headline value: $1,400m Definitive agreement pursuant to which Gilead will acquire CV Therapeutics for $20.00 per share in cash through a tender offer

and second step merger. CV Therapeutics Board of Directors has unanimously approved the transaction and has agreed to recommend to its stockholders that they tender their shares pursuant to the tender offer. CV Therapeutics will become a wholly owned subsidiary of Gilead. The transaction is valued at approximately $1.4 billion.

GLAXOSMITHKLINE AND BRAZIL $2.2B

Summary: In a move designed to help bolster Brazil's emerging drug market (and GSK's emerging market plans), Glaxo inked a $2.2 billion deal to supply its Synflorix vaccine to Brazil. But the GSK/Brazil 10year contract wasn't simply a vaccine supply deal. It included a provision through which the price of Synflorix will fall from about $17 to a little more than $7 per dose over time, as well as a technology

transfer component. Over the course of the contract, GSK will pass on the knowledge and expertise necessary to help Brazil make its own vaccine. Plus, Glaxo will invest 35 million ($51 million) into an effort to develop a dengue fever vaccine, matching Brazil's own investment into the effort.

GLAXOSMITHKLINE AND STIEFEL LABS $3.6B

Summary: It was rumored in March that privately held Stiefel Laboratories, which specializes in dermatological products, was

putting itself on the market. A month later, GSK gobbled up the company for $3.6 billion. CEO Andrew Witty said the buyout was part of GSK's plan to grow and diversify. The drugmaker has combined its existing prescription dermatological products with Stiefel's business, giving it 8 percent of the global market for prescription skin drugs. GSK also gained Stiefel's pipeline of more than 15 candidates in late stage trials. Former Stiefel CEO and Chairman Charles Stiefel (whose family owned the company for over 160 years) stayed on as the new unit's business's chief.

JOHNSON & JOHNSON COUGAR BIOTECHNOLOGY

May 2009 Acquisition Headline value: US$970m Johnson & Johnson will initiate a tender offer, through a new wholly owned subsidiary, to purchase all outstanding shares of Cougar Biotechnology at $43 per share. The tender offer is conditioned on the tender of a majority of the outstanding shares of Cougar Biotechnologys common stock. The closing is conditioned on clearance under the Hart Scott Rodino Antitrust Improvements Act and other customary closing conditions. The $970 million estimated net value of the transaction is based on Cougar Biotechnologys 20.8 million shares outstanding, net of estimated cash on hand at closing. The boards of directors of both Johnson & Johnson and Cougar Biotechnology have approved the transaction.

LUNDBECK OVATION

February 2009 Acquisition Headline value: $900m Definitive transaction agreement under which Lundbeck, through the wholly owned subsidiary Lundbeck, Inc., will acquire Ovation in an all cash transaction valuing Ovation at up to USD 900 million or approximately DKK 5.2 billion. The Supervisory Board at Lundbeck and the Board of Directors of Ovation have

unanimously approved the transaction.


5/7


page 5

MERCK AND SCHERINGPLOUGH $41.1B

Summary: The M&A fever continued in March with Merck's acquisition of long time partner Schering Plough. The two had been working on

cholesterol drugs Vytorin and Zetia, which have caused controversy over questions of their effectiveness. As with the Pfizer and Roche deals, the merger has involved layoffs. Merck CEO Richard Clark said that 15 percent of the companies combined workforces would be cut. With a total workforce of 106,000, that adds up to about 16,000 workers.

NOVARTIS AND ALCON $28.1B

Summary: Novartis has been eyeing closing a deal to buy out all of Alcon's shares since last year, when it struck a deal to acquire a majority interest in Alcon for $28.1 billion. The deal permitted it to snap up Nestle's 52 percent interest in Alcon, a global eye care company. But now Alcon directors have expressed disappointment over Novartis' "disrespectful" offer to buy out minority shareholders, some of

whom have

already

started

protesting

in

court,

decrying their $151 per share offer that's far below the $180 Novartis is paying Nestle.

ONYX PROTEOLIX

October 2009 Acquisition Headline value: US$750m Onyx will make a $276 million cash payment upon closing of the transaction. Additional payments include $40 million payable in 2010 based on the achievement of a

development milestone and up to $535 million contingent upon the achievement of certain regulatory approvals for carfilzomib in the U.S. and Europe. Of the potential $535 million, a payment of $170 million is based upon the achievement of accelerated U.S. Food and Drug Administration approval.

PFIZER AND WYETH $68B

Summary: The year started off with a bang when Pfizer paid $68 billion for Wyeth Pharmaceuticals. The merger of the pharma

giants was the largest corporate tie up since 2006. Pfizer CEO Jeff Kindler expressed great hope about the merger: "It will produce [a] distinct blend of diversification, flexibility, and scale that positions the combo company for success," he said at the time. However, the merger has resulted in layoffs (which could top 19,500 when all is said and done). Plus, late last month, Pfizer announced it is dropping about 100 drug development programs from a pipeline swollen by the merger. The bulk of the remaining 500 programs focus on six key areas: Oncology, pain, inflammation, Alzheimer's disease, psychoses and diabetes.

ROCHE AND GENENTECH $46.8B

Summary: Genentech became a member of the Roche family last March. Although the two units are moving along in their integration process, the courtship wasn't without some wrangling. A Genentech special committee had rebuffed an earlier offer from Roche to acquire shares that the Swiss drugmaker didn't already own for $89 a share. However, the parties reached a "friendly agreement," through which Roche would pay $95 a share or $46.8 billion. And Genentech moniker won't be going away in October, the parties announced that all Roche meds will be rebranded for the U.S. market. But there have been layoffs. For example, 302 people were let go from the Roche Palo Alto between July and December, according to paperwork filed with California officials.

ROCHE AND PTC THERAPEUTICS $2B

Summary: The Roche/PTC deal has the distinction of being the biggest development deal of 2009. In a deal worth $12 million up front, PTC agreed to use its Gene Expression Modulation by Smallmolecules (GEMS) technology platform to help Roche find four new drugs for CNS diseases. The deal includes an option on four more programs and up to

$239 million for each in milestone payments. The Roche pact was the largest of a string of


6/7


page 6

deals PTC has made for its GEMS technology. The company also has a $1.2 billion agreements with Pfizer, a $345 million pact with CV Therapeutics and a $212 million partnership with Schering Plough.

SANOFIAVENTIS CHATTEM

December 2009 Acquisition Headline value: US$1,900m Definitive agreement under which sanofi aventis is to acquire 100 percent of the outstanding shares of Chattem in a cash tender offer for $93.50 per share, or approximately $1.9 billion. The transaction will create the world's fifth largest consumer healthcare

company measured by product revenues by combining Chattem's position as a leading U.S. consumer healthcare company with sanofi aventis' strong international presence in the sector.

SANOFIAVENTIS AND MERCK $4B

Summary: Last summer, Sanofi Aventis bought the rest of Merial, its animal health joint venture with Merck, for $4 billion. And Sanofi negotiated an option to join forces again after Merck and Schering Plough merge, combining Merial and Schering's animal health business Intervet. Under the option Sanofi would pay $9.25 billion to joint venture with Intervet, which would be owned equally by Merck and Sanofi. "The combination would create a new leader in this $19 billion global animal health market, supporting our vision of a global

diversified healthcare leader." Sanofi CEO Christopher Viehbacher said at the time.

TPG IMS HEALTH

November 2009 Acquisition Headline value: $5,200m IMS Health has entered into a definitive agreement to be acquired by investment funds managed by TPG Capital and the CPP Investment Board in a transaction with a total value of $5.2 billion, including the assumption of debt.

VARIAN AGILENT

July 2009 Acquisition Headline value: US$1,500m Agilent will pay $52 cash per share of common stock for Varian in a transaction

that represents a premium of approximately 35% to Varians closing price on July 24, 2009. Both Agilents and Varians Board of Directors have unanimously approved the allcash offer.

WARNER CHILCOTT AND P&G $3.1B

Summary: Consumer products Proctor & Gamble said in 2008 that it was planning to offload its $2 billion pharmaceutical business unit, which featured drugs in the areas of women's health, gastrointestinal problems and musculoskeletal disorders. P&G had already stopped investing in drug development because it wasn't very profitable. After months of hunting, P&G found a buyer in Warner Chilcott, which agreed to pay $3.1 billion for the business. Warner got a grab bag of assets, including Asacol HD Delayed Release Tablets for ulcerative colitis, Actonel for osteoporosis, and

the

copromotion

rights

to

Enablex

for

overactive bladder, as well as P&G's prescription drug product pipeline and manufacturing facilities in Puerto Rico and Germany. The good news for P&G employees was that Warner elected to retain most of the pharma unit's 2,300 person staff.

WATSON ARROW GROUP

June 2009 Acquisition Headline value:

$1,750m Definitive agreement to acquire privately held Arrow Group for $1.75 billion in cash and stock. The combination of Watson and Arrow will result in a global pharmaceutical company with over $3 billion in revenue, commercial operations in over 20 countries, and a robust product portfolio and pipeline. Watson expects the transaction to close in the second half of 2009, and be accretive to cash

earnings per

share

in

2010

before

synergies.


7/7


page 7

SOURCES:

CURRENTPARTNERING:

http://www.currentpartnering.com/scorecard/manda2009 NATURE REVIEWS DRUG DISCOVERY :

http://www.nature.com/nrd/journal/v9/n2/full/nrd3114.html FIERCEBIOTECH:

http://www.fiercebiotech.com/special reports/top 10 biopharma deals 2009
http://www.currentpartnering.com/scorecard/manda2009http://www.currentpartnering.com/scorecard/manda2009http://www.nature.com/nrd/journal/v9/n2/full/nrd3114.htmlhttp://www.nature.com/nrd/journal/v9/n2/full/nrd3114.htmlhttp://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.fiercebiotech.com/special-reports/top-10-biopharma-deals-2009http://www.nature.com/nrd/journal/v9/n2/full/nrd3114.htmlhttp://www.currentpartnering.com/scorecard/manda2009

mna deals 2009 review os ii

Documents