DEALTALK-UPDATE 1-Savient's gout drug nod may trigger bid war
Thomson Reuters
(Adds Graphic on gout drugs)
* Abbott, Pfizer, Amgen seen as most likely suitors
* Takeover premium could be as high as 100 pct
* Aletrnative TNF-alpha inhibitors coming up to patent
expiry
(For more Reuters DEALTALKs; [DEALTALK/])
By Esha Dey
BANGALORE, Sept 21 (Reuters) - Savient Pharma
investors may be looking at windfall gains as regulatory
approval for the firm's gout drug could spark a bidding war
valuing Savient at up to double its current stock price.
Krystexxa, an infused drug for treating gout in patients
who do not improve with other therapies, is the first approved
treatment in a difficult-to-treat patient group, and would fit
well with the rheumatology franchise of a large pharmaceutical
and biotech firm.
Besides, the greater market penetration afforded by the
financial muscle of a large drugmaker may just turn the drug --
already expected to bring in about $500 million in peak U.S.
sales -- into a blockbuster product.
Abbott Laboratories , Pfizer and Amgen
are seen as the most likely acquirers given their
existing rheumatology franchises, while Bristol-Myers Squibb
, Roche and Johnson & Johnson are also
potential bidders.
"It's not often an approved biological asset for a disease
with unmet medical need is up for sale," JPMorgan analyst Cory
Kasimov said.
The drug has orphan status, guaranteeing it 7-year
marketing exclusivity. Potential patent protection could also
shield it from generic competition into 2026.
Gout is a a painful type of arthritis caused by a build-up
of uric acid that leads to swollen joints. About 5 million
Americans suffer from the disease.
DEAL LOGIC
The rheumatology portfolio of the bigger players is made up
mostly of a class of arthritis drugs called TNF-alpha
inhibitors that are expected to go off-patent as soon as 2012.
Sales could drop 80 percent due to competition from cheap
bio-similars.
TNF-alpha inhibitors work by blocking receptors to an
inflammation-causing protein that is stimulated by the presence
of high levels of uric acid in the blood, while Krystexxa,
expected to be marketed at a significant premium to TNF-alpha
drugs, works by lowering the levels of uric acid.
Japan's Takeda Pharmaceutical's Uloric, approved
early last year, is another next-generation gout drug, but is
indicated for the standard form of the disease, while Krystexxa
-- earlier known as Puricase -- is for severe gout sufferers.
Biotech acquisitions with rich premiums have started to
ramp up this year as the patent cliff looms.
2010 acquisitions have included OSI Pharmaceuticals
, bought by Japan's Astellas Pharma for a 55
percent premium, and ZymoGenetics being picked up by
Bristol-Myers for an 84 percent premium.
Apart from the outright buys, AstraZeneca also
bought the rights to Rigel Pharmaceuticals'
next-generation rheumatoid arthritis drug for up to $1.2
billion.
For GRAPHIC on arthritis, gout drugs;
graphics.thomsonreuters.com
For GRAPHIC on biotech deals in 2009/10;
graphics.thomsonreuters.com |
