Pharma Today: Deals, Drug News, and a 'Going Concern' Warning
In another -- but not as large -- deal, Japan's Astellas launched a hostile $3.5 billion bid for U.S. biotech OSI Pharmaceutical (OSIP). Astellas is offering $52 a share, a 40% premium over Friday's close of $37.02. OSI Pharma's top-selling drug is lung cancer treatment Tarceva, which saw sales grow 17% to $1.2 billion in 2009. It also has a pipelines focused on oncology, diabetes and obesity, which Astellas says would support its own growth strategy of becoming a leader in oncology.
And in yet another -- even smaller -- deal, Baxter International (BAX) said it would pay up to $330 million to acquire U.K.-based ApaTech, a privately held orthobiologic products company specializing in synthetic bone repair materials for orthopedic and dental applications. Specifically, Baxter is interested in getting Actifuse, a synthetic bone graft material that's currently marketed in the U.S., Europe and other markets. ApaTech generated sales of approximately $60 million in 2009.
Running Low on Working Capital
While all this wheeling and dealing is going on, Cell Therapeutics (CTIC) shares skidded some 10%, to 60 cents, in morning trading after the company said its auditors had expressed "substantial doubt" about its ability to continue as a going concern. Cell Therapeutics is developing pixantrone, a treatment for non-Hodgkin's lymphoma, but a decision from the U.S. Food and Drug Administration about the drug was postponed last week due to weather.
FDA reviewers have questioned the drug's efficacy and safety. In a 10-K filing with the Securities and Exchange Commission, Cell Therapeutics said that given its current cash equivalents, it doesn't expect to have "sufficient working capital to fund our presently anticipated operations through the third quarter of 2010," and it will need to raise more cash.
On the bright side, Ariad Pharmaceuticals (ARIA) shares jumped over 4% to $2.66 after it said its experimental cancer drug, AP24534, received orphan-drug designation from the FDA and the European Medicines Agency. The investigational drug is for chronic myeloid leukemia and a form of lymphoblastic leukemia. Orphan-drug status is reserved for treatments of conditions that affect less than 200,000 people a year in the U.S. and allows for seven years of marketing exclusivity.
Biodel (BIOD) also got good news from U.S regulators. The FDA accepted for review Biodel's experimental diabetes drug VIAject, sending its shares up over 8%, to $4.32 in morning trading. Biodel said it expects the regulatory action date for its VIAject application to be Oct. 30. According to Biodel, VIAject is a formulation of human insulin designed to be absorbed into the blood faster than simlar currently marketed products. It's designated for Type 1 or Type 2 diabetes.