In the world of dealmaking, Exelixis scored a drug development and commercialization partnership with its long-time partner Bristol-Myers Squibb. The deal means an immediate cash infusion of $195 million for South San Francisco-based Exelixis and covers two of Exelixis’ small molecule drug candidates for cancer and their associated development programs. They include XL 184, a small molecule inhibitor of MET, VEGFR2, and RET, which is currently in late-stage testing for medullary thyroid cancer. The other one is XL281, a small molecule inhibitor of RAF kinase, in early-stage testing for the treatment of solid tumor malignancies. The upfront payment was one of the largest ever received by a biotech company. Genzyme’s $1.9-billion deal in July with Isis Pharmaceuticals for the cholesterol drug candidate mipomersen garnered a $325-million upfront payment.

 

But the deal was a bright spot in an otherwise dim week for dealmaking. Private financings deals slowed to a trickle during the second week of December for the venture community with only one private U.S. life sciences company, Healionics, managing to raise capital from angel investors. The public markets are not faring any better with only one financing of note: Momenta Pharmaceuticals’ registered direct offering for $25.2 million. 

 

Finally, some pharmaceutical companies have decided to go the biotech route indirectly by developing their own versions of follow on biotech drugs. Three days after Merck made the announcement that it would start a new unit, Merck BioVentures, to pursue copy-cat biologics, Lilly CEO John Lechleiter told investors at the company’s annual outlook meeting that Lilly is also looking at developing generic biologics, but added that it doesn’t have anything in development. Although Lilly will post a net loss this year as a result of the ImClone acquisition, which will also depress income in 2009, it will continue to look for more deals with smaller companies.

Global Venture Financings
Company	Location	AmountRaised $M	Focus
Healionics	Redmon,Wa	2.6	Medtech
Vaperma	Quebec City, Quebec	5.5	Alternative energy
Interface Biologics	Canada	5	Medical devices
Diagnoplex	Switzerland	8.3	Cancer diagnostics
TOTAL RAISED US		2.6
TOTAL RAISED EX-US		18.8
PUBLIC FINANCINGS (US)		40
M&A (US)
Acquiree	Acquirer		Focus
Dow Pharmaceutical Sciences	Valeant Pharmaceuticals	285	Dermatology
PML Microbiologicals, Inc	bioMerieux, Inc (France)	n/a	In vitro diagnostics
Asset Acquisitions
Medtronic, Inc	Given Imaging (Israel)	20	GERD diagnostic
Nucleonics Inc	Alnylam	n/a	RNAi patent assets
Pharmacopeia, Inc	Quantros	n/a	MEDMARX reporting system for adverse events
Company	Company		Focus
Exelixis, Inc	Bristol-Myers Squibb Co	865	Cancer drug development
Ascent Therapeutics	Novartis AG Option Fund	200	License option for GPCR-targeted drugs
Astra Zeneca (UK)	1.6	Extension of previous partnership in obesity	Palatin Technologies
Alliances (US)
Salix Pharmaceuticals	Napo Pharmaceuticals	5	License for GI compound