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Thriving in 2008: Approvals, Deals and Other Silver Linings(BioWorld Financial Watch Via Acquire Media NewsEdge) The year 2008 in biotechnology will be remembered as one of survival, including restructurings and layoffs at more than 80 companies, executive pay-cuts and resignations, discontinued programs, and lots of asset monetization and creative financing. The belt-tightening hasn't been easy. At least five biotechs have filed for bankruptcy, and around half are operating with less than a year of cash. But so far, the industry is weathering the storm better than most. In late December, the Nasdaq Biotech Index had fallen just 13 percent for the year, while the broader Nasdaq index was down 41.3 percent. And despite all the gloom and doom, there were plenty of successes during the year including FDA approvals, successful trials, solid deals and even financings. Looking for a Few Good Financings Overall, biotech companies raised about $11 billion through late December, less than half of the $24.4 billion raised in the same period 2007. Public companies suffered the most, raising just $6.89 billion, barely a third of the $18.2 billion raised in 2007. The complete absence of initial public offerings in 2008 (except Bioheart Inc.'s meager $5.8 million deal, which no one seems to count) is an all-too-familiar story. But a handful of public biotechs managed to complete substantial (i.e. more than $100 million) follow-on offerings with decent terms (i.e. without warrants and at less than a 5 percent discount to the market). The largest of those was Illumina Inc.'s $306.3 million offering, followed by Vertex Pharmaceuticals Inc.'s $219.9 million offering, Rigel Pharmaceuticals Inc.'s $135 million offering, Acorda Therapeutics Inc.'s $131.1 million offering and Incyte Corp.'s $108.7 million offering. On the private side, total financing was $4.1 billion, about two-thirds of the $6.2 billion raised through late December last year. Average deal value across all rounds was $18.4 million, down from $20.9 million in 2007, and fewer deals closed in 2008 compared to 2007. Yet a few mega-deals emerged: OncoMed Pharmaceuticals Inc. raised $154 million in Series B financing to support its work on cancer stem cells, and Pacific Biosciences Inc. raised $100 million for its DNA sequencing tools. Other big private rounds included a $79 million C round from Proteolix Inc., a $65 million B round from Taligen Therapeutics Inc. and $60 million late rounds from Merrimack Pharmaceuticals Inc., Portola Pharmaceuticals Inc. and Biolex Therapeutics Inc. Biotechs Outpace Pharma in FDA Approvals While some biotechs managed to raise money in 2008 despite the depressing state of the markets, others managed to get FDA approvals despite the complex regulatory environment. Biotechs far outpaced big pharmas in 2008 in achieving FDA approvals of new molecular entities (NMEs) and new biologics. The FDA approved about 80 new drug applications (NDAs) and biologic license applications (BLAs) for medications in 2008, which were about the same as 2007. However, most of those 2008 NDA and BLA drug approvals were for new formulations and dosage forms or combinations of medications already marketed in the U.S. There were 20 approvals for NMEs and four for new biologics in 2008, up from 16 NMEs and two new biologics in 2007. Additionally, at least six NDAs for HIV drugs gained tentative approvals in 2008 under the President's Plan for AIDS Relief, or PEPFAR. Zurich, Switzerland-based Nycomed AS won the first 2008 nod from the FDA on Jan. 10 with the approval of its NDA for Alvesco (ciclesonide), an inhaled corticosteroid used to treat asthma. But it was Yardley, Pa.-based Tibotec Inc. that received the first NME approval last year for its HIV drug Intelence (etravirine). However, Intelence actually was granted an accelerated approval under Subpart H, which required the firm to conduct at least one additional study. Frazer, Pa.-based Cephalon Inc.'s Treanda (bendamustine hydrochloride) set a record as the only NME approved in 2008 for two cancer indications - chronic lymphocytic leukemia on March 20 and non-Hodgkin's lymphoma on Oct. 31. Tokyo-based Eisai Co. Ltd. also had a good year in 2008, winning two NME approvals: The first on Nov. 14 for Banzel (rufinamide) as an adjunctive treatment for seizures in adults and children older than 4 years with Lennox-Gastaut syndrome, and the second on Dec. 12 for Lusedra (fospropofol disodium), an intravenous sedative-hypnotic agent indicated for monitored anesthesia care sedation in adult patients undergoing diagnostic or therapeutic procedures. Other biotech NMEs that gained approval in 2008 were CV Therapeutics Inc.'s Lexiscan (regadenoson, April 10), Progenics Pharmaceuticals Inc.'s Relistor (methylnaltrexone bromide, April 24), Adolor Corp.'s Entereg (alvimopan, May 20), Sirion Therapeutic Inc.'s Durezol (difluprednate, June 23), the Medicine Co.'s Cleviprex (clevidipine butyrate, Aug. 1), Ovation Pharmaceutical Inc.'s Xenazine (tetrabenazine, Aug. 15), UCB SA's Vimpat (lacosamide, Oct. 28), and Grunenthal GmbH's tapentadol (Nov. 20). Genzyme Corp.'s Mozobil (plerixafor, Dec. 15) and Ferring Pharmaceuticals Inc.'s degarelix. New biologics developed by biotech companies that achieved approvals in 2008 from the FDA's Center for Drug Evaluation and Research (CDER) were Regeneron Pharmaceuticals Inc.'s Arcalyst (rilonacept, Feb. 27), UCB SA's Cimzia (certolizumab pegol, April 22) and Amgen Inc.'s Nplate (romiplostim, Aug. 22). The FDA's Center for Biologics Evaluation and Research also approved BLAs last year for ZymoGenetics Inc.'s Recothrom (thrombin, recombinant), a plasma-free thrombin approved on Jan. 17 as a topical hemostat used in surgery to control minor bleeding, and ViroPharma Inc.'s Cinryze (C1-esterase inhibitor), approved on Oct. 10 as the first prophylactic therapy in the U.S. for patients with hereditary angioedema, a rare, potentially life-threatening genetic disorder. FDA records show that 11 medications approved last year received a six-month priority review by CDER, while the remaining drugs and biologics approved by the FDA in 2008 had reviews of 10 months or longer. Most of the medications that received priority reviews in 2008 were NMEs or new biologics developed by biotech companies. The six PEPFAR drugs approved last year also received priority reviews. On Deck: Good Phase III Data On the flip side, there were a lot of late-stage setbacks in 2008 (Progenics Pharmaceuticals Inc., Cell Genesys Inc., Dynavax Technologies Corp., etc.) - but that's hardly unexpected for an industry with a 1-in-10 success rate. And the news wasn't all bad - dozens of products hit their Phase III endpoints in 2008, paving the way for plenty of new product approvals in 2009. In the past month alone, Cadence Pharmaceuticals Inc. had good Phase III data with pain drug Acetavance; Anesiva Inc. saw its shares soar more than 700 percent on good Phase III data with pain drug Adlea; Vivus Inc. hit its endpoints in its first Phase III trial with obesity drug Qnexa; and Human Genome Sciences Inc.'s Albuferon (albinterferon alfa-2b) met its goals in a Phase III hepatitis C trial, not to mention additional good Phase III data from Alexza Pharmaceuticals Inc., Javelin Pharmaceuticals Inc., MannKind Corp., Pozen Inc. and Horizon Therapeutics Inc. Earlier in 2008, noteworthy Phase III findings came from Avastin (bevacizumab, Genentech Inc.) in breast cancer, which led to an accelerated approval; antibiotic OPT-80, which sent Optimer Pharmaceuticals Inc.'s shares skyrocketing 99.6 percent; Amgen Inc.'s much-anticipated Phase III fracture study of osteoporosis drug denosumab, which now is under FDA review; and many others. Deals, Deals and More Deals If there was a silver lining to the storm clouds of 2008, it was business development. Some of the merger and acquisition activity was driven by reverse mergers of private companies seeking an exit into public shells, such as OncoGenex Pharmaceuticals Inc. into Sonus Pharmaceuticals Inc., VGX Pharmaceuticals Inc. into Inovio Biomedical Corp., Transcept Pharmaceuticals Inc. into Novacea Inc., ARCA Biopharma Inc. into Nuvelo Inc., and Archemix Corp. into NitroMed Inc. Other deals could be attributed to European pharmaceutical firms snatching up promising biotechs, like Sanofi-Aventis Group's buyout of Acambis plc, Novartis AG's acquisition of Protez Pharmaceuticals and Speedel Holdings AG, Shire Ltd.'s purchase of Jerini AG, Ipsen SA's grab for Tercica Inc, and GlaxoSmithKline plc's acquisition of Sirtris Pharmaceuticals Inc. There also were more billion-dollar-plus mergers in 2008 vs. 2007, including Eli Lilly and Co.'s purchase of ImClone Systems Inc., Takeda Pharmaceuticals Ltd.'s purchase of Millennium Pharmaceuticals Inc., Celgene Corp.'s acquisition of Pharmion Corp., and Eisai Co. Ltd.'s purchase of MGI Pharma Inc. And of course, Roche Holdings AG's $44 billion proposal for Genentech Inc. would dwarf the rest, if it goes through. Beyond M&A, there were plenty of lucrative partnerships formed in 2008. GSK proved its willingness to pony up the big bucks, inking a deal potentially worth more than a billion dollars with Actelion Ltd. on the heels of billion-dollar-plus deals with Synta Pharmaceuticals Corp. and OncoMed Pharmaceuticals Inc., which was signed late last year. Another big partnership came from Alnylam Pharmaceuticals Inc., which may get more than $1 billion from its deal with Takeda Pharmaceutical Co. Ltd. Also, on the biotech-biotech deal front, Isis Pharmaceuticals Inc. signed a billion-dollar-plus deal with Genzyme Corp. So yes, times were hard in 2008, but the biotech industry survived and - some might even argue - thrived . . . or at least achieved a lot to be proud of. What does it all mean, and what happens next? Tune in next week for expert analysis of major trends in 2008 and predictions for 2009. Copyright ? 2009 Thomson BioWorld, All Rights Reserved. |