As the year begins, it provides an opportunity to reflect on the past 12 months and to highlight those companies and drugs that have not fared so well. Starting off the year badly, as a knock-on effect from 2007, was Novacea, which in April received notification from Schering-Plough of its termination of the collaboration agreement relating to the development of Asentar (DN-101). In 2007, the companies halted the Phase III ASCENT-2 trial of Asentar for the treatment of patients with androgen-independent prostate cancer (PCA), due to an imbalance of deaths between the two treatment arms. The companies then suspended enrolment in other ongoing trials involving the drug. There was a glimmer of hope for Novacea later in the year as it entered into a merger agreement with Transcept Pharmaceuticals, however Asentar was offered no such lifeline and there are no plans to resurrect it.
As with previous years, cancer vaccines promised much in 2008, but again failed to deliver. Favrille's Phase III registration trial for Specifid (mitumprotimut-T) administered following Rituxan (rituximab) in patients with follicular B-cell non-Hodgkin's lymphoma failed to show a statistically significant improvement in the primary endpoint of time-to-progression. Due to the results, Favrille is discontinuing development of the vaccine and is currently evaluating steps to conserve cash and recognise value on its assets, which include a reverse merger with MyMedicalRecords.com. Cell Genesys also suffered as the company, along with Takeda and its wholly-owned subsidiary, Millennium Pharmaceuticals, suspended further development of GVAX immunotherapy for PCA. In October, Cell Genesys terminated the Phase III VITAL-1 trial of GVAX in patients with asymptomatic, metastatic hormone-refractory PCA following an analysis, which indicated that the trial had a <30 class="blsp-spelling-error" id="SPELLING_ERROR_24">Genesys to implement a substantial restructuring plan, which will include the loss of around 80 per cent of its employees.
Other drugs to fail in Phase III included Taiho Pharmaceutical's S-1 in advanced gastric cancer, which caused sanofi-aventis to return its development and commercialisation rights to the oral anticancer agent, as well as Progen Pharmaceuticals' PI-88 in hepatocellular carcinoma, for which the company cited reduced commercial opportunities. A further surprise came when the FDA notified Introgen Therapeutics that its BLA for Advexin (contusugene ladenovec), the company's targeted p53 tumour suppressor gene therapy for the treatment of recurrent, refractory squamous cell carcinoma of the head and neck (SCCHN), was not sufficiently complete and would not be filed at this time. Introgen intends to appeal this refuse to file decision and is reviewing the various options available to it. The decision came as a surprise, as earlier in August, the EMEA accepted for review Gendux Molecular's (Introgen) MAA for Advexin for the treatment of recurrent, refractory SCCHN.
But perhaps the biggest loser of the year was Bristol-Myers Squibb, which lost out to Eli Lilly in the race to takeover ImClone Systems. However, BMS did receive approximately US$1 billion in cash following the acquisition, an amount that in the current financial climate is perhaps as valuable.
Matthew Dennis - Editor, Cancer Drug News
Showing posts with label Bristol-Myers Squibb. Show all posts
Showing posts with label Bristol-Myers Squibb. Show all posts
Wednesday, January 7, 2009
Tuesday, October 14, 2008
Market jitters affecting takeovers?
As the world financial crisis deepens, the potential takeover deals involving Genentech and Roche, as well as ImClone Systems and Bristol-Myers Squibb, continue to play out. The current market situation could have an impact on the first takeover, although the second looks more likely to proceed smoothly.
For the first time since Roche made its bid to acquire Genentech in July for US$89.00 per share, the latter's shares have dropped below the offer price, ending on 29th September at US$85.30. The uncertainty now surrounding the bid has fuelled speculation that an improved offer may not be made. When Roche proposed the deal, the cost of borrowing was not as high as it in the current climate. Now there are concerns that Roche would have trouble financing the deal, which currently stands at US$43.7 billion, given the current credit market conditions. However, many analysts believe Roche's strong balance sheet and predictable cash flow will still allow it to secure funding for the deal.
The current situation could ultimately work in Roche's favour as the company may choose to draw out the process in order to extract the lowest possible price for Genentech's remaining shares. It may be that many Genentech shareholders would also prefer to wait, given that interim results are expected in November from a key clinical trial looking at the use of Avastin (bevacizumab) in colon cancer patients who have had tumours surgically removed; final results of the 2,700-patient study are due in 2009.
As for BMS' takeover offer for ImClone, which currently stands at US$62.00 per share in cash, Carl Icahn, ImClone's Chairman of the Board, recently commented that the "hostile tender of US$62, at this time, seems absurd". ImClone reportedly has an offer from another large pharmaceutical company of US$70.00 per share, also in cash, subject to due diligence, which was scheduled to be finished on 28th September. ImClone is expecting that a solid offer from this company will be made or a formal rejection, in which case the suitor will be identified, by the end of business on 1st October. Both of these offers, BMS' valued at US$4.7 billion and the other at US$6.1 billion, do not rely on either company raising funds so should not be affected by recent financial developments.
But to add to the uncertainty, Merck KGaA has entered the fray. Although the company has said that it will not bid for ImClone on its own, it has stated that it may consider taking part in a potential approach for the company. Could it join forces with rumoured suitors, such as Eli Lilly and Pfizer, which has coincidentally said recently that it will focus its early-stage research and development programmes on high growth areas, including cancer?
Matthew Dennis - Editor, Cancer Drug News
For the first time since Roche made its bid to acquire Genentech in July for US$89.00 per share, the latter's shares have dropped below the offer price, ending on 29th September at US$85.30. The uncertainty now surrounding the bid has fuelled speculation that an improved offer may not be made. When Roche proposed the deal, the cost of borrowing was not as high as it in the current climate. Now there are concerns that Roche would have trouble financing the deal, which currently stands at US$43.7 billion, given the current credit market conditions. However, many analysts believe Roche's strong balance sheet and predictable cash flow will still allow it to secure funding for the deal.
The current situation could ultimately work in Roche's favour as the company may choose to draw out the process in order to extract the lowest possible price for Genentech's remaining shares. It may be that many Genentech shareholders would also prefer to wait, given that interim results are expected in November from a key clinical trial looking at the use of Avastin (bevacizumab) in colon cancer patients who have had tumours surgically removed; final results of the 2,700-patient study are due in 2009.
As for BMS' takeover offer for ImClone, which currently stands at US$62.00 per share in cash, Carl Icahn, ImClone's Chairman of the Board, recently commented that the "hostile tender of US$62, at this time, seems absurd". ImClone reportedly has an offer from another large pharmaceutical company of US$70.00 per share, also in cash, subject to due diligence, which was scheduled to be finished on 28th September. ImClone is expecting that a solid offer from this company will be made or a formal rejection, in which case the suitor will be identified, by the end of business on 1st October. Both of these offers, BMS' valued at US$4.7 billion and the other at US$6.1 billion, do not rely on either company raising funds so should not be affected by recent financial developments.
But to add to the uncertainty, Merck KGaA has entered the fray. Although the company has said that it will not bid for ImClone on its own, it has stated that it may consider taking part in a potential approach for the company. Could it join forces with rumoured suitors, such as Eli Lilly and Pfizer, which has coincidentally said recently that it will focus its early-stage research and development programmes on high growth areas, including cancer?
Matthew Dennis - Editor, Cancer Drug News
Tuesday, September 16, 2008
Bidding war to start for ImClone?
ImClone Systems' Chairman of the Board, Carl Icahn, has stated that the Special Committee of ImClone's Board of Directors has informed Bristol-Myers Squibb that following the Special Committee's review and discussion, and based upon the advice it received from its advisors, the Special Committee has determined that the unsolicited offer that ImClone received from BMS to acquire ImClone for US$60 per share in cash is inadequate.
Icahn also disclosed that he has had several conversations with the Chief Executive Officer of a large pharmaceutical company. As a result of such conversations, the pharmaceutical company has submitted a proposal, subject to due diligence, but not subject to financing, to acquire ImClone for US$70 per share in cash. Names being bandied about for the unknown bidder include Merck KGaA, Pfizer and GlaxoSmithKline, as well as AstraZeneca and sanofi-aventis. The Special Committee has determined, subject to the execution of a confidentiality agreement, to allow this company to conduct due diligence for a two-week period, subject to extension by mutual consent. No determination has been made as to whether US$70 per share would be adequate.
In response to this disclosure, BMS sent a letter to Icahn stating its disappointment that the offer had been rejected without discussing its merits with BMS and its advisors. BMS also noted that, in contrast to the competing offer, it has made a formal written offer that has been approved by its Board of Directors, is not subject to due diligence and has been fully disclosed to ImClone's stockholders.
BMS currently holds the exclusive long-term marketing rights in the US to Erbitux (cetuximab) and related compounds, including IMC-11F8. BMS stated that it has no intention of agreeing to any modifications to these rights. Additionally, ImClone should understand that BMS’ offer is for the entire company, and any potential restructuring of ImClone could severely jeopardise its value and deprive stockholders of the benefits of the BMS offer.
BMS continues to look forward to engaging directly with ImClone and its financial and legal advisors to discuss the merits of its all-cash offer to acquire the approximately 83 per cent of the company that BMS does not already own. In reply, ImClone submitted a letter to BMS in which it stated that with regard to the assertion concerning rights to IMC-11F8 (which, if ultimately approved for sale, may have a significant competitive effect on Erbitux), ImClone disagrees that BMS' rights are clear and does not waive any rights that ImClone may have with regard thereto. If BMS wishes to make another offer that it believes ImClone would not find inadequate, it is free to do so. Upon receipt of that offer, ImClone will respond appropriately. However, BMS' Chief Financial Officer Jean-Marc Huet has stated that the company is willing to "walk away" from the deal if needed.
Exactly what belongs to whom in the BMS-ImClone partnership will be a key question of interest as ImClone's new mystery bidder conducts its due diligence over the next few weeks. It seems likely that Merck KGaA may be the interested party because it partners with ImClone in selling Erbitux in some countries outside North America and has touted the drug's prospects of being approved for other types of cancer. Perhaps the bidding will now start in earnest?
Matthew Dennis - Editor, Cancer Drug News
Icahn also disclosed that he has had several conversations with the Chief Executive Officer of a large pharmaceutical company. As a result of such conversations, the pharmaceutical company has submitted a proposal, subject to due diligence, but not subject to financing, to acquire ImClone for US$70 per share in cash. Names being bandied about for the unknown bidder include Merck KGaA, Pfizer and GlaxoSmithKline, as well as AstraZeneca and sanofi-aventis. The Special Committee has determined, subject to the execution of a confidentiality agreement, to allow this company to conduct due diligence for a two-week period, subject to extension by mutual consent. No determination has been made as to whether US$70 per share would be adequate.
In response to this disclosure, BMS sent a letter to Icahn stating its disappointment that the offer had been rejected without discussing its merits with BMS and its advisors. BMS also noted that, in contrast to the competing offer, it has made a formal written offer that has been approved by its Board of Directors, is not subject to due diligence and has been fully disclosed to ImClone's stockholders.
BMS currently holds the exclusive long-term marketing rights in the US to Erbitux (cetuximab) and related compounds, including IMC-11F8. BMS stated that it has no intention of agreeing to any modifications to these rights. Additionally, ImClone should understand that BMS’ offer is for the entire company, and any potential restructuring of ImClone could severely jeopardise its value and deprive stockholders of the benefits of the BMS offer.
BMS continues to look forward to engaging directly with ImClone and its financial and legal advisors to discuss the merits of its all-cash offer to acquire the approximately 83 per cent of the company that BMS does not already own. In reply, ImClone submitted a letter to BMS in which it stated that with regard to the assertion concerning rights to IMC-11F8 (which, if ultimately approved for sale, may have a significant competitive effect on Erbitux), ImClone disagrees that BMS' rights are clear and does not waive any rights that ImClone may have with regard thereto. If BMS wishes to make another offer that it believes ImClone would not find inadequate, it is free to do so. Upon receipt of that offer, ImClone will respond appropriately. However, BMS' Chief Financial Officer Jean-Marc Huet has stated that the company is willing to "walk away" from the deal if needed.
Exactly what belongs to whom in the BMS-ImClone partnership will be a key question of interest as ImClone's new mystery bidder conducts its due diligence over the next few weeks. It seems likely that Merck KGaA may be the interested party because it partners with ImClone in selling Erbitux in some countries outside North America and has touted the drug's prospects of being approved for other types of cancer. Perhaps the bidding will now start in earnest?
Matthew Dennis - Editor, Cancer Drug News
Wednesday, August 13, 2008
BMS moves to buy ImClone
Bristol-Myers Squibb has proposed to enter into an agreement to acquire ImClone Systems for US$60.00 per share in cash, or a total payment of approximately US$4.5 billion. BMS currently owns approximately 17 per cent of all outstanding shares of ImClone. BMS' all-cash offer, which is not conditioned on the receipt of financing or on the conduct of due diligence, represents a premium of approximately 30 per cent over ImClone's closing stock price on 30th July, a premium of approximately40 per cent over the average closing price of ImClone's stock during the most recent one-month period and a premium in excess of 40 per cent for the average closing stock prices of ImClone stock during each of the most recent three- and 12-month periods.
James M Cornelius, BMS' Chairman and Chief Executive Officer, stated that the transaction represents an evolutionary development in the companies' seven-year-long relationship. BMS is the natural partner for ImClone as it possesses the knowledge base and resources to advance the company's growth over the long-term, not only with respect toErbitux (cetuximab), which the companies jointly commercialise, but also in terms of developing ImClone's pipeline assets.
ImClone's Board of Directors has formed a committee to study the acquisition offer and to retain advisors to assist it in determining the appropriate course of action. However, the Board's preliminary view is that the offer substantially undervalues the company. ImClone pointed out that its Board has been discussing the possibility of separating the company into its Erbitux and its pipeline businesses in order to maximise the value of the company.
Chairman of ImClone's Board, Carl C Icahn, has stated that he was disturbed that one of the directors on the ImClone Board who is the BMS designee was privy to the information discussed at previous meetings concerning the potential separation of ImClone into two separate components and how this restructuring might enhance stockholder value. Accordingly, the Board is reviewing whether BMS had access to confidential information concerning ImClone and its pipeline. Additionally, Icahn pointed out that ImClone has a pipeline antibody, IMC-11F8, under development which, if ultimately approved for sale, might have a significant competitive effect on Erbitux and that BMS may have no rights to market that product under its agreements with the company.
If BMS gained control of all the Erbitux revenues it would fill a long-term hole caused by the loss of patent protection, starting in 2012 and 2013,surrounding the company's heart disease drug, Plavix (clopidogrel),and antihypertensive, Avapro (irbesartan). Erbitux is indicated for use in the treatment of patients with metastatic colorectal cancer and in the treatment of squamous cell carcinoma of the head and neck. Under the agreement between BMS and ImClone, which expires in September2018, ImClone receives a distribution fee based on a flat rate of 39 per cent of Erbitux net sales in North America. This agreement was amended in July 2007 to provide for additional development funding for certain indications.
Merck KGaA is also a partner in the co-development and co-commercialisation of Erbitux in Japan and other markets outside of the US. As such, it could perhaps emerge as the most likely competitor for ImClone. It would make sense for Merck to protect its investment in the drug, since it was the company's own clinical trial that finally persuaded the FDA to approve Erbitux, and a new Merck trial has shown it to be efective in fighting lung cancer as well.
Matthew Dennis - Editor, Cancer Drug News
James M Cornelius, BMS' Chairman and Chief Executive Officer, stated that the transaction represents an evolutionary development in the companies' seven-year-long relationship. BMS is the natural partner for ImClone as it possesses the knowledge base and resources to advance the company's growth over the long-term, not only with respect toErbitux (cetuximab), which the companies jointly commercialise, but also in terms of developing ImClone's pipeline assets.
ImClone's Board of Directors has formed a committee to study the acquisition offer and to retain advisors to assist it in determining the appropriate course of action. However, the Board's preliminary view is that the offer substantially undervalues the company. ImClone pointed out that its Board has been discussing the possibility of separating the company into its Erbitux and its pipeline businesses in order to maximise the value of the company.
Chairman of ImClone's Board, Carl C Icahn, has stated that he was disturbed that one of the directors on the ImClone Board who is the BMS designee was privy to the information discussed at previous meetings concerning the potential separation of ImClone into two separate components and how this restructuring might enhance stockholder value. Accordingly, the Board is reviewing whether BMS had access to confidential information concerning ImClone and its pipeline. Additionally, Icahn pointed out that ImClone has a pipeline antibody, IMC-11F8, under development which, if ultimately approved for sale, might have a significant competitive effect on Erbitux and that BMS may have no rights to market that product under its agreements with the company.
If BMS gained control of all the Erbitux revenues it would fill a long-term hole caused by the loss of patent protection, starting in 2012 and 2013,surrounding the company's heart disease drug, Plavix (clopidogrel),and antihypertensive, Avapro (irbesartan). Erbitux is indicated for use in the treatment of patients with metastatic colorectal cancer and in the treatment of squamous cell carcinoma of the head and neck. Under the agreement between BMS and ImClone, which expires in September2018, ImClone receives a distribution fee based on a flat rate of 39 per cent of Erbitux net sales in North America. This agreement was amended in July 2007 to provide for additional development funding for certain indications.
Merck KGaA is also a partner in the co-development and co-commercialisation of Erbitux in Japan and other markets outside of the US. As such, it could perhaps emerge as the most likely competitor for ImClone. It would make sense for Merck to protect its investment in the drug, since it was the company's own clinical trial that finally persuaded the FDA to approve Erbitux, and a new Merck trial has shown it to be efective in fighting lung cancer as well.
Matthew Dennis - Editor, Cancer Drug News
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