Bolt-on Acquisitions and Mergers

[hellodolly]

Cash laying around at some of the biggest BPs are going to make for some interesting bolt-on acquisitions or even outright mergers. Patent expiration's & new technologies are making the race to the elusive finish line very interesting. 

August 19, 2019 From Reuters:WHO IS NEXT IN BIG PHARMAS MERGER SPREE? 


BIOGEN INC:


** Since the halt in its development of a promising Alzheimer's therapy wiped $18 billion off Biogen's stock in March, Wall Street has been calling on the company to beef up its drug development pipeline through acquisitions.

** Possible deals would give the company access to drugs for lucrative therapeutic areas such as Duchenne muscular dystrophy and depression.

** Recent deal was the $877 million buyout of gene therapy developer Nightstar Therapeutics, and as of June 30 the company still had cash reserves of almost $2 billion.


ELI LILLY AND CO :


** Lilly spun off its animal health unit earlier this year, and has reiterated its commitment to making bolt-on acquisitions to diversify its portfolio, as its long-term top-sellers Humalog and Cialis face intensifying competition.

** Company has also been focusing on cancer drug development and its $8 billion buyout of Loxo Oncology helped it delve deeper into the lucrative business.

** The company reported $2.29 billion in cash and cash equivalents as of June 30.


PFIZER INC:


** The world's largest drug maker has repeatedly said it would steer clear of large scale M&A, citing confidence in its own drug pipeline. But in April it said it would look at bolt-on deals worth "a few" billion dollars to complement its pipeline

** The spin-off and merger of its consumer healthcare unit with GlaxoSmithKline Plc, as well as its off-patent branded drugs business has simplified the company's business structure.

** Analysts say that may still leave room for smaller deals like its $10.6 billion buy of Array Biopharma, which boosted its arsenal of oncology drugs and set the stage for the company to become a leader in colon cancer treatments.

** Shares of the company are down 20.6% so far this year.


AMGEN INC :

** A recent U.S. court ruling win on Amgen patents for rheumatoid arthritis drug Enbrel is seen as having left the company free to pursue business development plans, including M&A.

** The drug maker said previously it would look for both big and small deals to push deeper into areas like cancer and metabolic disorders, where it already has a firm footing.

** Analysts have also suggested buying Celgene Corp's psoriasis drug Otezla, which Bristol-Myers Squibb Co is looking to sell in order to allay antitrust concerns.

** Amgen had $5.53 billion in cash and cash equivalents as of June 30. Shares of the company are up nearly 5% this year.


MERCK & CO INC:

** Investors have raised concerns about Merck's increasing dependence on blockbuster cancer drug Keytruda, highlighting the need for the drug maker to engage in M&A.

** The company has said it would focus on bolt-on deals rather than a large, transformative acquisition.

** War chest stood at $6.7 billion in cash and cash equivalents, as of June 30 with shares up nearly 11.3% this year.


GILDEAD SCIENCES INC :


** CEO Daniel O'Day has raised expectations for consolidation since taking the helm in March, prioritizing pipeline diversification and announcing a $5.1 billion investment in Belgo-Dutch biotech Galapagos NV, which pushed deeper into areas such as fibrosis and arthritis.

** California-based Gilead had cash and cash equivalents of $11.24 billion as of June 30. Shares up about 1% this year.

[agedhippie]

The problem is that none of those companies are likely to want Afrezza. Lilly has it's own new insulin, Pfizer is never going near inhaled insulin again. The rest are focused on non-insulin products (Merck and SGLT2), or it's not their area.

[helmut8056]

Edge: So much for Afrezza. What about the rest?

[lennymnkd]

Aged ** Gil hannscomb could not come up with a more ridiculous post ! 

[brotherm1]

Aug 20, 2019 16:58:09 GMT -5 lennymnkd said:

Aged ** Gil hannscomb could not come up with a more ridiculous post ! 

Why is that Lenny?

[lennymnkd]

Come on ! I need to explain .. to make those kind of assumptions what those pharmaceutical have planned for their future business and to pretty much say  emphatically Pfizer would never entertain an inhaled version of insulin dosing / is probably the most ridiculous post I’ve read on proboards since I signed up ..

[agedhippie]

Aug 20, 2019 17:55:16 GMT -5 lennymnkd said:

Come on ! I need to explain .. to make those kind of assumptions what those pharmaceutical have planned for their future business and to pretty much say  emphatically Pfizer would never entertain an inhaled version of insulin dosing / is probably the most ridiculous post I’ve read on proboards since I signed up ..

The last time Pfizer tried to sell inhaled insulin it ended in complete failure with them taking a $2.8 billion charge. Politically you are not going to get anyone to suggest selling inhaled insulin again any time soon. I am quite comfortable being emphatic about that - institutional memory works like that.

[longliner]

Aug 20, 2019 19:22:23 GMT -5 agedhippie said:

Aug 20, 2019 17:55:16 GMT -5 lennymnkd said:

Come on ! I need to explain .. to make those kind of assumptions what those pharmaceutical have planned for their future business and to pretty much say  emphatically Pfizer would never entertain an inhaled version of insulin dosing / is probably the most ridiculous post I’ve read on proboards since I signed up ..

The last time Pfizer tried to sell inhaled insulin it ended in complete failure with them taking a $2.8 billion charge. Politically you are not going to get anyone to suggest selling inhaled insulin again any time soon. I am quite comfortable being emphatic about that - institutional memory works like that.

Ok big dog, maybe you will explain your vast insight into the other companies listed and why they will bypass this with pediatric approval. Moderators.....come on!

[akemp3000]

When significant changes in management occur, significant changes in corporate direction occur. Sanofi is a good example. It's wrong to speculate that certain things are known about corporate planning when they're not. Pfizer failing with a horrible product like Exhubera in 2006 wouldn't prevent new Pfizer thinking in 2020. Agree that it's unlikely.

[sportsrancho]

Aug 20, 2019 20:18:42 GMT -5 akemp3000 said:

When significant changes in management occur, significant changes in corporate direction occur. Sanofi is a good example. It's wrong to speculate that certain things are known about corporate planning when they're not. Pfizer failing with a horrible product like Exhubera in 2006 wouldn't prevent new Pfizer thinking in 2020. Agree that it's unlikely.

People tend to do the same thing over and over expecting different results. I kind of think companies do that also, not to say they wouldn’t possibly have different results. That’s why Pfizer was my pic for a buy out years ago, although I wouldn’t pick them today.

[lifebreath]

Aug 20, 2019 20:23:52 GMT -5 sportsrancho said:

Aug 20, 2019 20:18:42 GMT -5 akemp3000 said:

When significant changes in management occur, significant changes in corporate direction occur. Sanofi is a good example. It's wrong to speculate that certain things are known about corporate planning when they're not. Pfizer failing with a horrible product like Exhubera in 2006 wouldn't prevent new Pfizer thinking in 2020. Agree that it's unlikely.

People tend to do the same thing over and over expecting different results. I kind of think companies do that also, not to say they wouldn’t possibly have different results. That’s why Pfizer was my pic for a buy out years ago, although I wouldn’t pick them today.

who would you pick? If you were to that is

[sportsrancho]

Afrezza is not selling so none of them are going to be interested. If it was..SNY.
I’d lease Afrezza to Vdex, they believe in it.
And self TS to United therapeutics.

But best case scenario is a buy-in by UT. IMO

[georgethenight2]

Aug 20, 2019 20:37:22 GMT -5 sportsrancho said:

Afrezza is not selling so none of them are going to be interested. If it was..SNY.
I’d lease Afrezza to Vdex, they believe in it.
And self TS to United therapeutics.

But best case scenario is a buy-in by UT. IMO

Last time we recieved $150m up front from SNY and 35% of sales. Plus milestones. With VDEX "leasing" Afrezza, while I dont think we see that same amount of up front cash, with sales hovering around (current yearly projection x international sales) $50m~$60m, how much does VDEX　pay to lease Afrezza? And does VDEX have that kind of ammunition?

As for TS. I like a buy in, not an outright purchase. This, while possible, eliminates all possible partnerships that can be had in the future. Once Trep-T gets up and the royalities come in, then I believe MC true desire comes alive. Expanding the pipeline! Look what we did with Trep-T on a VERY LIMITED budget, give or take $100m, not including royalities. As SO likes to point out: a fully funded MNKD is a dangerous MNKD(paraphrased).

We have been patient to this point. What is another 6 months to a year?

BTW how is VDEX coming along?

[sportsrancho]

Aug 20, 2019 21:45:23 GMT -5 georgethenight2 said:

Aug 20, 2019 20:37:22 GMT -5 sportsrancho said:

Afrezza is not selling so none of them are going to be interested. If it was..SNY.
I’d lease Afrezza to Vdex, they believe in it.
And self TS to United therapeutics.

But best case scenario is a buy-in by UT. IMO

Last time we recieved $150m up front from SNY and 35% of sales. Plus milestones. With VDEX "leasing" Afrezza, while I dont think we see that same amount of up front cash, with sales hovering around (current yearly projection x international sales) $50m~$60m, how much does VDEX　pay to lease Afrezza? And does VDEX have that kind of ammunition?

As for TS. I like a buy in, not an outright purchase. This, while possible, eliminates all possible partnerships that can be had in the future. Once Trep-T gets up and the royalities come in, then I believe MC true desire comes alive. Expanding the pipeline! Look what we did with Trep-T on a VERY LIMITED budget, give or take $100m, not including royalities. As SO likes to point out: a fully funded MNKD is a dangerous MNKD(paraphrased).

We have been patient to this point. What is another 6 months to a year?

BTW how is VDEX coming along?

I don’t really want to sell anything either. Does a buy-in from United limit other partnerships? Getting 4 drugs partnered would be ideal. 6 months to a year sounds ideal also.
Vdex is doing well and ready to roll:-) Enough funding for leasing,.... that was just in my perfect world scenario.
I’d love to see clinics open up in multiple states quickly, but what’s more important is how many providers are at each clinic. And they are training those providers now.

[georgethenight2]

Aug 20, 2019 22:06:33 GMT -5 sportsrancho said:

Aug 20, 2019 21:45:23 GMT -5 georgethenight2 said:

Last time we recieved $150m up front from SNY and 35% of sales. Plus milestones. With VDEX "leasing" Afrezza, while I dont think we see that same amount of up front cash, with sales hovering around (current yearly projection x international sales) $50m~$60m, how much does VDEX　pay to lease Afrezza? And does VDEX have that kind of ammunition?

As for TS. I like a buy in, not an outright purchase. This, while possible, eliminates all possible partnerships that can be had in the future. Once Trep-T gets up and the royalities come in, then I believe MC true desire comes alive. Expanding the pipeline! Look what we did with Trep-T on a VERY LIMITED budget, give or take $100m, not including royalities. As SO likes to point out: a fully funded MNKD is a dangerous MNKD(paraphrased).

We have been patient to this point. What is another 6 months to a year?

BTW how is VDEX coming along?

I don’t really want to sell anything either. Does a buy-in from United limit other partnerships? Getting 4 drugs partnered would be ideal. 6 months to a year sounds ideal also.
Vdex is doing well and ready to roll:-) Enough funding for leasing,.... that was just in my perfect world scenario.
I’d love to see clinics open up in multiple states quickly, but what’s more important is how many providers are at each clinic. And they are training those providers now.

As you are close to Bill I will assume he has significant funding to "lease" Afrezza. When is the deal getting done?

Investor's savings are two fold if a deal is done. Dedicated saleaforce is let go and all associated costs. Additionally, upfront money.

Unless. Bill only wants rights to territories where said salesforce is not active. Less savings, but still some money upfront, possibly.

Personally, while not a VDEX supportor nor a detractor, if Bill has cash and is willing, why not a direct and straightforward approach? No more Youtube. MC has stated we have had 100+ partners approach us, but NONE of them willing to PAY! Could that possibly be why MC was unwilling to discuss details with VDEX and Bill?

Regardless. Till death do us part.