An article from Investor's Business Daily on recent biotech mergers, including Celgene's recent purchase of Avila Therapeutics, which may also put Celgene in the HCV DAA marketplace. I need a scorecard to keep up!
Gilead, Celgene Join Big Pharma On M&A Front
By MARILYN ALVA, INVESTOR'S BUSINESS DAILY Posted 01/27/2012 02:19 PM ET
The biotech industry is gripped with acquisition fever.
Celgene (CELG) was the latest to catch the fever, announcing Thursday it would buy privately held Avila Therapeutics for $350 million.
The move expands Celgene's market-leading blood cancer arsenal, which includes top-gun Revlimid, by adding Avila's experimental drug therapy known as AVL-292, now in clinical development.
Gene mapping is making drug development more precise, targeting patients with certain genetic markers.
Avila also brings Celgene into the hot hepatitis C treatment arena with drugs called protease inhibitors now in preclinical development.
Biotech firms are racing to bring new hepatitis C drugs to market to replace the current regimen of virus-fighting cocktails, including injectable interferon, which often has crippling side effects.
The Celgene/Avila deal is small potatoes compared with HIV-focused Gilead Sciences' (GILD) recent acquisition of Pharmasset.
Gilead paid $11.2 billion, a huge premium, to get its hands on the company's hepatitis C drugs still in development.
The deal was unusual not only for its size, but also for the type of outfit doing the buying: another biotech firm.
Biotech mergers and acquisitions are not new. But biotech firms usually make smaller buys.
It's the large diversified drug firms that typically pay big money for biotech firms to offset blockbuster drugs losing patent protection and shrinking development pipelines.
Last year, France's Sanofi-Aventis (SNY) paid $20 billion for the remaining interest it had in Genzyme.
In 2009, Swiss drug giant Roche Holding (RHHBY) bought Genentech, the granddaddy of biotechs, for a cool $46.8 billion, giving it reason to declare itself the biggest biotech company in the world.
"Gilead's $11 billion acquisition really opened eyes for the potential of biotech companies to be big acquirers as well," said Steven Silver, biotech equity analyst with S&P Capital IQ.
Gilead, and now Celgene, are among a host of companies buying their way into new treatments for the hepatitis C virus, which affects liver function and afflicts some 170 million people worldwide.
Big Pharma is also on the hepatitis C warpath. In early January, Bristol-Myers Squibb (BMY) said it would pay $2.5 billion for biotech firm Inhibitex (INHX) to expand its war chest of hepatitis C drugs in development.
Its announcement came after Roche agreed to buy biotech outfit Anadys Pharmaceuticals (ANDS) for $250 million to bolster its hepatitis C pipeline.
"The hot theme for mergers and acquisitions right now is hepatitis C," said Silver.
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