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Merck & Co, which yesterday completed its $430 million acquisition of Inspire Pharmaceuticals, announced that it intends to shut down Inspire’s headquarters in Raleigh, NC. According to a Merck spokesperson closure of the former Inspire site will occur before the end of the year and their will be job losses. However, it is not clear at present how many jobs will be lost but both executive and workforce positions are on the chopping block. 

Inspire was founded at the University of North Carolina, Chapel Hill in1995 and went public in 2000. The company employed 240 workers at the beginning of 2011 but it cut 27 percent of its workforce in February after an experimental treatment for cystic fibrosis failed in clinical trials. Merck’s acquisition of Inspire gives the company AzaSite an approved treatment for pink eye and a treatment for dry that is approved in Japan (the drug failed to gain US regulatory approval).

In other industry news, Connecticut-based Alexion announced that it will add 20,000 sq feet of laboratory and office space to its Smithfield, RI location. The company currently employs 125 workers and plans to expand its workforce by 35 percent in the next year or so. Alexion has one approved prescription medication called Soliris, the only approved therapy for persons with paroxysmal nocturnal hemoglboinuria (PNH) an orphan indication.

Until next time...

Good Luck and Good Job Hunting!!!!!!!

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Takeda Pharmaceutical Company, Japan’s largest pharmaceutical company, yesterday announced its intention to purchase the Swiss drug maker Nycomed for 8 to 10 billion euros ($11.4-14 billion). While the deal is not certain to close, it signals Takeda’s intention to purchase its way into the US and European markets.

Takeda acquired Cambridge, MA-based Millennium Pharmaceuticals in 2008 for $8.8 billion, the largest foreign acquisition ever by a Japanese company. The Millennium acquisition was intended to bolster Takeda’s competencies in genomics and oncology drug discovery. If Takeda is successful in its bid, Nycomed would enhance the company’s standing in treatments for gastric, respiratory and inflammatory disorders. Nycomed has operations in roughly 70 countries, with Europe representing 50 percent of the company’s sale and emerging markets 38 percent.

Takeda’s chief executive officer Yasuchika Hasegawa has pursued an aggressive M&A strategy since assuming control of the company in 2003. Historically, Japanese drugmakers intentionally remained small and were content doing business in local and other Asian markets. However, Hasegawa has changed the “game” and has forced some of Takeda’s rivals to emulate his global strategy. To that end, in recent years Daiichi Sankyo Company has purchased Plexxikon and Ranbaxy and Astellas acquired OSI pharmaceuticals as part of a westward expansion.

While Takeda remains Japan’s largest pharmaceutical company, net profit slumped 17 percent last year and the company is losing patent protection for its largest selling drugs, Prevacid (ulcers) and Actos (diabetes). Like Takeda, Nycomed sales are being hit by the loss of patent protection for its largest selling drug Protonix (antacid). Worldwide sales of the drug plummeted by almost 28 percent. Therefore, it would appear that Takeda’s pursuit of Nycomed is based more on its pipeline rather than currently marketed products.

Stay tuned for late-breaking news on the deal!

Until next time,

Good Luck and Good Job Hunting!!!!!

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After a five month-long series of  very public and often acrimonious negotiations, it appears that Sanofi-Aventis and Genzyme may be close to deal that would enable the French drug maker to acquire one of the world’s largest public biotechnology companies.

According to the NY Times and a number of life sciences blogs, both companies have agreed in principle on a framework for a takeover deal. The major sticking point in the negotiations is Sanofi’s tender offer of $69 per share of Genzyme stock. Genzyme executives and industry analysts view the offer as “too low” and believe that a stock share price in the mid-70s is more reasonable and likely in the end. Another sticking point is the success of Genzyme’s leukemia treatment Campath (alemtuzumab, which is in clinical development to treat multiple sclerosis but will be marketed under the brand name Lemtrada if approved). Genzyme believes that Campath will likely be a winner whereas Sanofi executives are not so sure. Consequently, the deal will likely include additional payments to Genzyme if the drug meets or exceeds certain sale targets for either or both indications.

Persons with knowledge of the negotiations suggest that the specifics of a deal will likely be worked out of the next week or so. This is because, on Monday, Sanofi signed a nondisclosure agreement with Genzyme to conduct due diligence for the deal. Really? What has Sanofi been doing for the past 5 months?

The Genzyme deal is critical for Sanofi which desperately needs to quickly get into the biotechnology game, particularly in the areas of oncology and neurological disorders. Last week, Sanofi’s experimental drug to treat breast cancer, iniparib failed to meet clinical endpoints in a late stage clinical trial. Also, Plavix, Sanofi’s top-selling anti-clotting drug will lose patent protection in May 2012 (FDA recently gave Sanofi an additional six months of marketing exclusivity based on a newly awarded pediatric indication). Plavix is the world’s second best selling prescription medication.

I don’t know about you, but I hope that this deal gets done soon! From the outset, it was apparent to most life sciences pundits and industry insiders that Sanofi would prevail and ultimately acquire Genzyme. Unfortunately, Genzyme’s ongoing manufacturing woes provided Sanofi with an excuse to “lowball” its initial offers. And, surprisingly, Genzyme’s management team had the chutzpah and wherewithal to push back hard.  The bottom line: it is a great deal for both companies—“Just Do It.”

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Millennium employees find themselves in an enviable position that most pharmaceutical and biotechnology employee would die for!  Shortly after Takeda announced that it would buy Cambridge MA-based Millennium Pharmaceuticals for $8.8 billion, it offered many Millennium employees retention bonuses to stay at the company for 12 to 24 months until the acquisition is completed. These bonuses will be in addition to cash that many of Millennium’s 1,000 employees will get by exercising their stock options (Takeda is paying a premium to purchase all of Millennium outstanding shares of stock).

While offering retention bonuses to employees of a company that is going to be acquired is unusual it is not unheard of.  Retaining key employees during an acquisition typically makes the transition a lot smoother.  Further, it signals to extant employees that management values their services and that their continued presence at the company is vital to its success.  Finally, it serves to reduce the stress and uncertainty felt by many employees when a company is sold.

In my opinion, offering Millennium employees retention bonuses is a very bold and smart move by Takeda.  Unlike other pharmaceutical companies who have acquired biotechnology companies for their approved drugs or investigational medicines in their pipelines, this is Takeda’s first foray into the biotechnology business. Put simply, Takeda executives lack the expertise and requisite skill sets necessary to successfully compete in the biotechnology arena.  Encouraging and retaining employees who helped to make Millennium a success is a brilliantly crafted strategy that will permit Takeda to quickly learn how to compete in the biotechnology space in a fiscally-responsible manner.

One of the biggest hurdles to overcome after an acquisition is merging the corporate cultures that existed at the two companies prior to acquisition. One possible solution to this problem is to restructure the acquired company and terminate many or all of its employees. Another solution is to determine (over time) which employees are or aren’t vital to operation of the company. Although this approach is not as draconian as the first option, it requires an inordinate amount time and money to implement. Ask any Pfizer executive about this the utility of this approach (I think that they are still trying to recover from the Warner Lambert and Pharmacia acquisitions that took place in the mid to late 1990s).  

I think the Japanese got this one right.   Maybe we Americans can learn a thing or two from them?

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!

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Pfizer Inc. said Tuesday it will buy privately-held biotechnology company CovX in a move to augment its own internal pipeline of biotechnology products. CovX’s expertise lies in developing long-acting, peptide-based biotherapeutic drugs.

La Jolla, Calif.-based CovX has already generated one early-stage diabetes candidate and two early-stage cancer treatment candidates, Pfizer said. It will operate as part of Pfizer's Biotherapeutic and Bioinnovation Center in California.

According to Pfizer CEO Jeffry Kindler, “The acquisition of CovX is a further step in Pfizer's strategy to acquire and identify new product candidates that we can put into development, leveraging both Pfizer's expertise and that of world-class scientists charged with discovering and bringing in new compounds.” The truth is: that Pfizer hasn’t seen a deal that it could not resist!

A Pfizer spokesperson said CovX scientists will remain with the company. That is exactly what Pfizer told Warner Lambert and Pharmacia employees after those companies were purchased.
If I was working at CovX I would be updating my resume–just in case

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