Entries Tagged 'M&A' ↓

• Forma Therapeutics  has revealed that it has done a deal with Novartis, agreeing to use its chemistry platform to develop inhibitors for an undisclosed protein-protein interaction target in oncology.
• The license and option pact is worth up to $200 million in upfront fees and milestones.
• Forma only recently dropped its stealth approach to announce that it had raised $25 million to pursue new compounds that could target pathways disclosed by the Cancer Genome Atlas Project.
• Its three founding scientists have played a key role in the field at the Broad Institute.
• Reinhard Ambros, head of the Novartis Venture Funds (NVF) says: “Protein-protein interactions represent important target opportunities in the field of oncology drug discovery, but have been highly elusive to date. Novartis is very excited to be collaborating with Forma to access their biology and chemistry expertise and powerful discovery tools to unlock this challenging target class.”

This press release has more details. 

Deal Analysis:

1. The very high P/E of most biotech deals makes it difficult for a non-pharma investor to even give it a serious consideration. So in that sense, the investor pool is limited.
2. Forma Therapeutics has done a great job in securing the deal and the associated funding. As rhe capital markets dry-up, there won’t be many takers for biotech investments. And in that sense, this $25-$200 million is probably worth 5x the amount in bullish times.
3. Lets hope Forma Therapeutics uses the funding wisely and R&D that can be resold  for rapid revenue generation. Investors will not wait for 4-5 years to see results. Getting the funding is the first step… delivering on it is a bigger step. Tangible results are needed in 12-18 months. Lets see how it goes.

In a bid to break out of its pain therapy niche, Endo Pharmaceuticals agreed to pay up to $637 million to acquire Indevus Pharmaceuticals. Indevus shareholders get $370 million of that now and up to $267 million more if a series of discovery and commercial milestones are hit.According to Endo, the combined company will market nine therapies, including its pain therapies as well as Indevus’ Pagoclone for anxiety disorders and Trospim for overactive bladder. And Endo says it has identified some $40 million in cost savings.

Much of the upside of the deal will rest on the fate of Nebido, Indevus’ experimental therapy for hypogonadism. New data on the therapy will be sent to the FDA in the first half of 2009 as researchers seek an approval. Endo will pay $2 a share based on Nebido’s approval and performance.

This page has more details:

http://www.forbes.com/feeds/ap/2009/01/05/ap5881458.html