From G. Sachs report:
Millennium agreed to acquire COR Therapeutics for $2 billion in stock or approximately 58 million Millennium shares.
Each COR share will be exchanged for 0.9873 Millennium share, which implies a purchase price of $35, a 77%
premium to yesterday’s closing price of COR shares. The transaction, to be accounted for under the purchase method,
is expected to close by the first quarter of 2002. The merger creates a company with a fully integrated company with a
pipeline of 9 clinical candidates in cardiology, oncology, inflammation, and metabolism.
Key points are as follows:
1. addition of Commercial capabilities and products to millennium
The commercial capabilities of the combined entity will include more than 140 employees in sales and marketing.
COR’s Integrilin, which is approved to treat patients with acute coronary syndromes and patients undergoing coronary
stenting. COR reported worldwide Integrilin sales of $172 million in 2000. Integrilin is being studied in over 20 trials in
other indications. Millennium has developed and commercialized Campath to treat chronic lymphocytic leukemia and
Melastatin to test the risk of metastatic skin cancer.
2. PIPELINE IN FOUR KEY AREAS
The combination of the two companies will result in a pipeline in the areas of cardiology, oncology, inflammation, and metabolism. The combined pipeline includes 3 products on the market, 9 products in clinical development, and numerous preclinical and research phase product candidates.
a. Three marketed products
1) Integrilin is an oral gpIIb/IIIa inhibitor approved to treat acute coronary syndrome including patients who are to be managed medically and those undergoing stenting.
2) Campath is a monoclonal antibody against CD52 marketed to treat chronic lymphocytic leukemia (CLL). In October,
Millennium agreed to sell to its joint venture partner, ILEX Oncology, its equity interest in their Campath JV for $140 million.
3) Melastatin is a test to provide prognostic and therapeutic information in patients with melanoma. Melastatin is available in academic centers. Becton Dickinson is Millennium’s marketing partner.
b. Nine products in clinical development
1) Integrilin is expected to begin Phase III trial termed ADVANCE-MI in stenting to treat acute heart attack.
2) Campath is being investigated in new indications. Phase II trials in multiple sclerosis and transplantation are
ongoing.
3) LDP-341 is a small molecule that inhibits proteasome function and may induce apoptosis or programmed cell death
of cancer cells. The compound is in Phase II studies in solid and liquid cancers as a single agent or in combination
chemotherapy. Data in CLL is expected in early 2003. Data from combination therapy in solid tumors are expected in
mid 2003.
4) LDP-02 is a humanized monoclonal antibody to the alpha-7-beta-4 and is being studied to treat inflammatory bowel
disorders. Phase II results in Crohn’s disease are expected in late 2002 and in ulcerative colitis in early 2003.
5) LDP-977 is an orally active 5-lipoxygenase inhibotr that began Phase II trials in asthma in June 2001. Data is
expected in late 2002.
6) LDP-519 is an oral proteasome inhibitor in Phase I studies to treat stroke.
7) LDP-01 is a humanized monoclonal antibody against Beta-2 integrins, which are adhesion molecules involved in the
recruitment of white cells to inflammatory sites.
8) J591 is a monoclonal antibody to prostate specific membrane antigen (PSMA). It is in Phase I trial to treat prostate cancer. Millennium in- licensed the antibody from BZL Biologics in April 2001.
9) MLN4760 is in Phase I trials to treat obesity. The compound is the first small molecule against a genomic target for metabolic disease from Millennium and the first to enter clinical trials from its agreement with Abbott. MLN4760 inhibits a carboxypeptidase enzyme believed to play a role in diet induced obesity and insulin sensitivity.
c. Numerous preclinical candidates
The combined company has numerous preclinical product candidates in the pipeline. COR has an oral tyrosine PDGF
inhibitor that may be developed for three indications: restenosis and two types of cancer (gliobastoma and acute
myeloid leukemia). Phase I studies are expected to begin in early 2002. Through its alliances with Bayer, Abbott, and
Aventis, Millennium has numerous preclinical drug candidates in the pipeline.
- Bayer alliance: delivered over 140 targets to Bayer including G-protein coupled receptors and ion channels. Six are in lead optimization.
- Abbott alliance: identified 11 highly validated mechanism targets with 5 having chemical lead series. Two compounds are expected to enter the clinic by the end of 2002.
- Aventis alliance: expanded resulting in a joint development pipeline that includes 11 discovery projects bringing the total to approximately 50 projects.
3. LOWERED Integrilin guidance
COR decreased 2001 worldwide end-user sales expectations for Integrilin to $225-230 million from $240-250 million
due to slower growth of the PCI market place, confusing interpretation of competitive data on the class of drugs on
clinical endponts and dosing, and a 20% sales force attrition.
We believe the outlook for Integrilin remains positive. In June 2001, COR announced that the one-year ESPRIT results
demonstrated that Integrilin maintained clinical benefit at one year, which is consistent with earlier data. The ESPRIT
trial is designed to evaluate the effect of Integrilin in stenting. Previously, Integrilin had shown positive results at 48
hours, 30 days, and six months. The new one-year data are a long-term positive for COR and should support
continued penetration of Integrilin versus Johnson & Johnson’s (JNJ) ReoPro and Merck’s Aggrastat in the angioplasty
and unstable angina markets.
The cost of Integrilin in the angioplasty setting is typically less than $500 and for ReoPro is between $1,300 and
$1,800. We expect that with a lower cost and broader label, Integrilin should continue to gain market share. In
addition, we look for continued market expansion. Approximately 50% of interventional patients are treated with a IIb
/IIIa blocker, and of those treated, less than 30% are treated for an optimal time. The patient market share for Integrilin
approximates 51%, versus approximately 10% for Merck and 40% for JNJ. In the unstable angina market, the recent
copromotional agreement with Genentech should begin to increase penetration later this year.
COR Therapeutics also started enrolling patients in a registry called CRUSADE. Over 200 of the targeted 400-600 US
hospitals have been enrolled. The goal is to follow 60,000 patients on treatment and outcomes. We expect CRUSADE
to increase the adoption of ACC/AHA guidelines on treatment of unstable angina patients with platelet IIb/IIIa
blockers, including Integrilin.
4. Financial Outlook
As of September 30, 2001, COR Therapeutics had $633 million in cash. The combined company will have
approximately $2 billion in cash and an estimated $400 million in revenues. The companies have revised 2001
worldwide Integrilin sales to $225-230 million worldwide and expect growth of over 30% over the next several years.
5. Board of directors and management
Millennium expects to add four members of COR’s board of directors to its board of directors including: Vaughn
Kailian, current president and CEO of COR, who will serve as vice chairperson of the Millennium board; Shaun
Coughlin, MD, PhD, Professor of Medicine and Cellular and Molecular Pharmacology and Director, Cardiovascular
Research Institute, University of California at San Francisco; Ernest Mario, former Chairman and CEO of Alza
Corporation; and Ginger Graham, Group Chairman of Guidant Corporation. Mark Levin will continue as Millennium’s
chairperson and chief executive officer.
Key COR management will take on the following roles: Vaughn Kailian, as vice chairperson of Millennium, will become
responsible for commercial operations and the therapeutic area businesses. Charles Homcy, M.D., currently executive
vice president of research and development at COR, will become president of research and development at
Millennium. Kevin Starr, currently Millennium’s executive vice president, business operations and chief financial
officer, will be promoted to the position of chief operating officer effective immediately. Vaughn Kailian, Charles Homcy and Kevin Starr will report to Mark Levin. |
