February 2019 Buys

Welcome back to Flagged Events: M&A, where we recap some of the latest mergers & acquisition activities across pharma for the month.

Endo cancels on Somerset

Earlier this week, Endo International plc ($ENDP) terminated the agreement that they had in place to acquire ophthalmics and injectables producer, Somerset Therapeutics, and their Bengaluru-based manufacturing affiliate, Wintac Limited, citing challenges with the Indian regulatory system. Endo International is the parent organization to Endo Pharmaceuticals, Par Pharmaceutical, and Paladin Labs, with the umbrella offering a broad range of branded and generic products across: Endocrinology, Orthopedics, Urology, Pain Symptoms, and more.

The Dublin - based organization also announced their 4th quarter and annual report for 2018, citing Q4 revenues of $786 million, which is up 2% from 2017. Annual revenue fell 15% to $2.94 billion at December 31 year end. US Generics were Endo’s strongest performing assets at $264 million in Q4, falling from $303 million in Q4 2017 due to the competitive generics business.

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Sarepta to buy Myonexus

Cambridge’s Sarepta Therapeutics ($SRPT) announced that they were exercising their option to purchase clinical stage biotech, Myonexus Therapeutics, for $165 million. The acquisition will bring 5 development candidates, aimed at treating specific forms of LGMD (Limb-Girdle Muscular Dystrophy), into Sarepta’s 24 candidate existing genetics pipeline. With 10 active clinical stage candidates, 3 of Sarepta’s studies have been registered in the previous 12 months.

For Q4 2018, Sarepta reported net revenues of $84.4 million, up 47.2% from the same period in 2017. Annual revenue is reported as $301 million for the year in 2018, an increase of 94.7% over 2017. Needless to say, it’s been a good year for Sarepta.

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Theratechnologies acquires Katana

Montreal’s orphan disease sponsor, Theratechnologies ($TH) announced their acquisition of Katana Biopharma this month, expanding their portfolio with Katana’s oncology platform. Under the terms of the USD $5.3 million deal, Theratechnologies will pay $2.6 million at the close of the agreement, with an additional $1.5 million stock and $1.8 million due upon meeting certain development milestones.

Katana’s platform uses peptide-anticancer drug conjugates to develop personalized treatments to target oncologic indications.

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Ipsen nabs Clementia

French oncology specialist, Ipsen ($IPN), announced their $1.31 billion purchase of Clementia Pharmaceuticals ($CMTA) and their rare disease pipeline. The acquisition will bring in Clementia’s late stage Palovarotene program, a retinoic acid receptor gamma (RARy) agonist used in the treatment of multiple ultra-rare bone disorders, Fibrodysplasia ossificans progressiva (FOP) an multiple osteochondromas (MO).

Ipsen will buy all of Clementia’s outstanding shares for $25 each, with an additional $263 million ($6 per share) contingent on FDA approval to market Palovarotene against multiple osteochondromas, bringing the total deal value to $1.31 billion.

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‍Big bucks for Spark

Well, maybe not in the world of pharma. Swiss giant, Roche ($ROG), entered into a definitive merger agreement with Spark Therapeutics ($ONCE) in an all cash deal for $4.8 billion that is expected to fully close in Q2 of 2019. Spark will continue to operate independently under Roche’s umbrella, and is the only biotech that has been able to commercialize a gene therapy for genetic disease in the US and EU. They also have a burgeoning gene therapy pipeline, targeting indications across inherited retinal diseases, hemophilia, lysosomal storage disorders, and neurodegenerative diseases.

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Avenue’s acquisition moving forward

Avenue Therapeutics ($ATXI), under the umbrella of Fortress Biotech ($FBIO), announced the first tranche completion of their acquisition agreement with InvaGen Pharmaceuticals, a subsidiary of Cipla ($CIPLA). Announced in November 2018, the deal will occur in 2 stages, totalling an intended amount of $215 million. The first stage for 33.3% of Avenue at $35 million, and the second stage for the remaining $180 million, pending certain conditions. The purchase will help the Indian pharma giant to build a specialty pipeline in the US market.

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