Deals: No IPO for Organon - Pharmaceutical Executive


Deals: No IPO for Organon
Akzo Nobel sells its pharma subsidiary to Schering-Plough. Plus, Jazz registers for an IPO, Eli Lilly acquires a sleep

Pharmaceutical Executive

Underwriters for the offering are Morgan Stanley, Lehman Brothers, Credit Suisse, and Natexis Bleichroeder.

Eli Lilly is acquiring Hypnion, a small neuroscience discovery and development company based in Lexington, MA. The move comes just months after Hypnion announced that its compound HY10275 met primary and secondary endpoints in an initial Phase II clinical trial in adults with transient insomnia.

HY10275 has a unique method of action: It is highly selective for histamine H1 and serotonin 5HT2a, two receptors that are known to affect the ability to fall asleep and stay asleep. The method of action may lead to the product being classified as a non-scheduled medication, a key marketing advantage.

Terms of the deal were not disclosed. Lazard Freres served as financial advisors to Hypnion, while Mintz, Levin, Cohn, Ferris, Glovsky & Popeo served as their legal advisors. For Lilly, Lehman Brothers served as financial advisors and Dewey Ballantine served as legal advisors on the deal.

Four years ago, Bedminster, NJ–based Dendrite International won a bidding war for the IMS spin-off Synavant, beating out one of its principal competitors in the CRM and sales force automation space, Cegedim of Paris, France. The move was credited with blocking Cegedim's plans to expand in the United States.

Now, Cegedim has signed a definitive merger agreement with Dendrite, agreeing to pay $16 per outstanding share. The terms of the agreement value Dendrite at approximately $751 million on a fully diluted equity basis, and the deal will create a company with anticipated revenues of more than $1 billion, building on Dendrite's strength in the United States and Asia and Ceredigm's strength in Europe.

Dendrite's stock price had suffered in recent months after the announcement that Pfizer, a major customer, was planning to take part of its sales force automation work in-house.

Cegedim's financial advisors in the deal were Banc of America Securities Limited and Societe Generale Corporate & Investment Banking. Its legal advisors were Hodgson Russ and Lowenstein Sandler. JPMorgan is financial advisor and Dewey Ballantine and Day Pitney are legal advisors to Dendrite.

The Czech generic company Zentiva has signed an agreement to acquire 75 percent of Eczacibasi Generic Pharmaceuticals, a major domestic pharmaceutical supplier in Turkey, from Eczacibasi Ilaç Sanayi ve Ticaret AS, for about $611 million in cash.

This is Zentiva's third acquisition in the past few years. It purchased Slovakofarma, the leading pharmaceutical company in Slovakia, in August 2003 and Sicomed, Romania's largest generic drugmaker, in 2005.

Zentiva is a major player in Eastern Europe. Its largest stockholder is Sanofi-Aventis, which holds 24.9 percent of outstanding shares.

The deal brings Zentiva a sales force of more than 500, manufacturing capacity of 400 million dosage units per year, and entry into the rapidly growing Turkish pharmaceutical market, which is expected to become one of the world's top 10 by 2010.

The purchase will be funded by a new five-year committed loan facility. Zentiva's financial representative in the transaction was UBS Investment Bank.

Building on a central nervous system therapeutic-area alliance started in 2005, Takeda Pharmaceuticals will acquire Paradigm Therapeutics.

Paradigm, based in Cambridge and Singapore, focuses on identifying small-molecule targets within key gene families such as G-protein coupled receptors (GPCRs), ion channels, and proteases. Its pipeline includes targets and late-stage pre-clinical projects in pain, CNS, hormone dependent diseases such as prostate and breast cancer, and metabolic diseases.


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