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The Best and Worst of Biotech in 2008(BioWorld Today Via Acquire Media NewsEdge) Ah, the year that was. Early January is the time to resolve to make things better, to bring in the new, to make a fresh start . . . and also to take a last look in the rearview mirror. Here are some unsolicited awards for 2008's notable people, companies and events. Pharma of the Year: Takeda Japan's Takeda Pharmaceutical Co. Ltd. stepped onto the global stage in a major way in 2008. Its decision to snap up Millennium Pharmaceuticals for $8.8 billion was roundly criticized as overvalued, but I never saw it that way. Even if you assume Millennium offered no more than Velcade, the fact that this novel cancer drug now is topping $1 billion in annual sales makes the deal look no more inflated than many product-based deals on a price-to-sales basis. (Immunex, anyone?) And in fact, it gives the company a major presence in the U.S. as well as a decent pipeline and a solid discovery platform in oncology and inflammation. But Takeda didn't stop there. Its potentially $1 billion-plus deal with Alnylam Pharmaceuticals Inc. furthers its reach on oncology research. (And gives it a stake in one of the few remaining independent RNAi companies.) True, the deal with Cell Genesys Inc. may not have worked out so well, but Takeda set about making itself a global contender in 2008. 11th-Hour Deal of the Year: Exelixis/BMS Give George Scangos credit. While Exelixis Inc.'s dwindling cash reserves were putting it near the top of some analysts' "deathwatch" lists, Scangos, its president and CEO, was steadfast in his belief in the value the company's pipeline and discovery platforms. Not only that, he publicly declared in November that the company would raise about $100 million in nondilutive alliance money before year-end. And then in mid-December, came a major deal with Bristol Meyers Squibb, worth $240 million in up-front/near-term payments. OK, so Scangos could see what was going on behind the curtain. It was still a bold example of brinksmanship that could have gone very wrong indeed. As it is, investors have given Exelixis remarkably little credit for the deal - far less than the cash value of the deal has been added to Exelixis' market cap. CEO of the Year: Peter Meldrum, Myriad Genetics Good dealmaking isn't necessarily a zero-sum game, but sometimes there have to be winners and losers. If it must be so, investors sure know what side they want to be on. It's hard to fathom how Myriad Genetics talked H. Lundbeck into making a nonrefundable $100 million up-front payment on the Alzheimer's drug Flurizan, which few close observers expected to succeed, but it did. (And yes, the drug subsequently failed.) Meanwhile, Myriad's CEO Peter Meldrum has presided over steadily increasing predictive medicine revenues and a stock price that actually went north in 2008. I'm not as sure about the decision to split up the molecular diagnostics business from the money-losing R&D operation, but Meldrum probably deserves the benefit of the doubt for now. Hat tip to TheStreet.com's Adam Feuerstein, who picked Meldrum as 2008's best CEO before me! Worst CEO of the Year: Harvey Berger, Ariad Pharma Let's see . . . destroyed shareholder value and drove share price to penny-stock territory? Check. Company now worth less than tangible assets despite some promising science? Check. So disliked that four independent board members quit in December over what they described as Berger's "self-interested, combative and obstructionist actions . . . [and] manipulative conduct"? Check. Accused of subverting shareholders in a self-interest deal to acquire the remainder of Ariad Gene Therapeutics on terms favorable to himself? Yep, that should do it. Product of the Year: ???? I was hoping to maybe put AMAG Pharmaceuticals' anemia drug ferumoxytol - a novel nanoformulation of iron oxide - in this spot. But, wouldn't you know it, the FDA missed its Dec. 30 PDUFA date. And that about sums up the year: FDA punted on some very interesting drugs. Yes, there were more new molecular entities approved in 2008 than in 2007, but I'd argue the year ranked lower in commercial innovation. We have two constipation drugs, three imaging/diagnostic agents, three pain drugs, a couple of drugs for bladder flow (too much or too little), and so on. Yes, those are important innovations, as were drugs for idiopathic thrombocytopenic purpura (Amgen's Nplate), chronic lymphocytic leukemia (Cephalon's Treanda), seizures (Eisai's Banzel and Schwarz Pharma's Vimpat) and more. But it has not been a year that would lead anyone to wax poetic about new treatment paradigms. IPO of the Year: Archemix I should point out that IPO in this case stands for "indirect public obfuscation." Aptamer specialist Archemix knew there was no way to do a conventional IPO this year on any reasonable terms, so it opted to reverse-merge into publicly traded NitroMed. The latter company has seen its BiDil product wither on the vine, so it agreed to take what was left of its company after selling of its BiDil assets and merge it with Archemix. Fans of reverse mergers (that is, the lawyers that enable them) point out that successful companies like Blockbuster, NYSE Euronext, Waste Management and others became public through reverse mergers. However, those companies happened to merge into strategic assets. NitroMed may be in the biotech industry, but Archemix is using it essentially as a shell - a strategy with a much more checkered record of success (to put it mildly). Nevertheless, Archemix has an impressive patent portfolio and a major collaboration with GlaxoSmithKline. This could just be a reverse merger that works and really become the backdoor IPO of the year. We'll check back next year. Smartest Acquirer: Johnson & Johnson It might have been pocket change for J&J, but it still drove a hard bargain when it snapped up Omrix Biopharmaceuticals for a lousy 18 percent premium to its then-current stock price . . . and a 31 percent discount to where it had been trading earlier in the year. Omrix, with its surgical sealants already partnered to J&J, was a no-brainer fit. But J&J knows a sale when it sees it. Smartest Acquiree: Sirtris Perhaps history will show that GlaxoSmithKline got a bargain when it agreed to pay $720 million for a company with one compound in Phase II. The 84 percent premium to Sirtris' stock price at the time, coming when the stock market was still relatively strong, showed how much big pharma loves a product platform. Most Sirtris shareholders loved trading in those shares. Best Place to be in 2009: Right Here Let's remember that biotech as an industry held up comparatively well in 2008, and going into 2009 there are great opportunities for consolidation that can make the whole industry stronger. It certainly will be a challenging year where the difference between success and failure is defined as much by cash in the bank as results in the clinic. But the companies that meet those challenges are going to be ready to thrive for the long term. n ? ? Copyright ? 2009 Thomson BioWorld, All Rights Reserved. |