Deals: Roche Goes Shopping - Pharmaceutical Executive

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Deals: Roche Goes Shopping
BioVeris purchase locks in a key diagnostic technology. PLUS: Eisai buys Morphotek, IMS gets more outcomes-research muscle, and other top deals.

Pharmaceutical Executive

Back in 2003, Roche resolved a long-standing lawsuit with Igen International by acquiring the company. As part of the deal, Roche acquired a perpetual license to use the Igen technology that gave rise to the lawsuit—electrochemiluminescence (ECL)—in certain applications. Igen's ECL patents, meanwhile, were assigned to a new publicly held spin-off company focusing on biosecurity testing, clinical point-of-care products, and vaccines. In March, Roche announced that it was acquiring the spin-off, Maryland-based BioVeris, for $21.50 per share, or a total of about $600 million.

The deal gives Roche the ability to expand its use of ECL in additional market segments, such as life science research, life science development, patient self-testing, veterinary testing, drug discovery, drug development, and clinical trials, opening up new possibilities for its immunochemistry business.

Part of the BioVeris business will continue to be independent of Roche: Some assets related to vaccine research and the development of instruments intended for point-of-care use will be sold to two new entities established by Igen founder (and BioVeris CEO) Samuel J. Wohlstadter.

Lehman Brothers is serving as financial adviser to BioVeris. Houlihan Lokey Howard & Zukin is serving as financial adviser to the special committee of independent directors of BioVeris's board and provided a fairness opinion regarding the asset sale to Wohlstadter. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel for BioVeris, Davis Polk & Wardwell and Foley & Lardner LLP for Roche.

Two more recent Roche deals: On the pharma side, Roche has announced that it is acquiring Therapeutic Human Polyclonals (THP), a privately held company based in California and Germany, which has developed transgenic rabbits that produce human antibodies. Roche is paying $56.5 million and plans to integrate THP into the Roche Pharma Center of Excellence for Protein Research at Penzberg, Germany. And on the diagnostics side, it is acquiring CuraGen's sequencing-technology unit, 454 Life Sciences, for $140 million plus up to $14.9 million from outstanding stock options and warrants. The deal gives Roche ownership of sequencing technology it has been marketing as a licensee since 2005.

Continuing its aggressive push into oncology, Eisai Corporation North America has agreed to acquire Morphotek for $325 million. The move follows the company's recent acquisition of four oncology compounds from Ligand, and its groundbreaking on a new $90 million oncology R&D center in Research Triangle Park.

Launched in 2000 and based in Exton, PA, Morphotek develops monoclonal antibodies for oncology and inflammatory and infectious diseases through a proprietary human-antibody technology called Human Morphodoma. Investors include Burrill & Company, CB Health Ventures, Flagship Ventures, Forward Ventures, Hunt BioVentures, Investor Growth Capital, MDS Capital Corp., Morgenthaler Ventures, Rock Maple Ventures, and S.R. One.

Eisai's financial advisers in the transaction are Mitsubishi UFJ Securities and Montgomery & Co., and its legal firm is Sullivan & Cromwell. Lehman Brothers is acting as financial adviser and Cozen O'Conner as legal counsel to Morphotek.

IMS Health is expanding its capabilities in health economics and outcomes research (HEOR) by acquiring ValueMedics Research of Falls Church, VA. Terms of the deal were not disclosed, but ValueMedics cofounder Jonothan C. Tierce will head IMS's HEOR practice in the Americas.

"Today, healthcare stakeholders—including governments, payers, providers and patients—require deeper insights into the value of medicines," said Gilles Pajot, IMS's chief operating officer, in a company release. "The acquisition of ValueMedics further strengthens our ability to demonstrate the efficacy, effectiveness, and efficiency of drugs and their potential impact in real-world clinical practice."

In Brief Sanofi-Aventis will pay Oxford BioMedica up to $690 million for marketing rights to TroVax, Oxford's cancer immunotherapy. // AmerisourceBergen will pay approximately $25 million in cash to acquire Xcenda LLC, which specializes in pharmaceutical brand services, applied health outcomes, and biopharma strategies. // Amicus Therapeutics, which focuses on genetic diseases like Fabry disease, has filed for an $86.25 million IPO. // Aerovance, a specialty respiratory company spun off of Bayer in 2004, has closed the $32 million second tranche of its $60 million Series C financing. It has molecules in development for uncontrolled asthma, cystic fibrosis, chronic obstructive pulmonary disease, and uncontrolled eczema. // Lundbeck has formed a research collaboration with BrainCells, Inc. (BCI). BCI will use proprietary technology to screen compounds for neurogenesis, the process of producing new brain cells out of stem cells. // Mumbai-based Glenmark Pharmaceuticals has purchased a majority stake in Medicamenta, which has sales and marketing operations in the Czech Republic and Slovakia. // British biotech VASTox has acquired a pair of discovery specialists: DanioLabs and Dextra Laboratories.

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