The financial markets continued to struggle as both Bank of America and Citigroup announced large fourth quarter losses in mid January, destroying the small gains the market had made. The possibility of nationalizing banks grew more likely. Biotech dealmaking continued its robust pace since the beginning of the year. But public markets remained difficult for biotech companies unless their name was Amgen. The biotech giant raised $2 billion in a two-part sale of an oversubscribed debt issue.

 

“We were pleased that it was oversubscribed and showed investors are confident in the progress made by the company in restructuring and overcoming some headwinds,” said Amgen Treasurer Pam Watnick.

 

Besides this debt offering, though, public financing remained woefully below last year’s levels when approximately $25 million in PIPE offerings and $80 million in secondary offerings were being completed on a weekly basis.

 

Global venture financing held steady, although it was below last week’s robust level. Partnering and M&A activity was also robust. Sequenom’s first offer to buy EXACT Sciences was promptly rejected by its board of directors. Sequenom came back a day later with a hostile takeover bid, offering essentially the same amount. The acquisition of EXACT Sciences, a pioneer in noninvasive stool-based DNA screening technologies for colorectal cancer, would provide Sequenom with an expanded noninvasive diagnostics offering in oncology, and position Sequenom with one of the most comprehensive noninvasive cancer diagnostic portfolios.

 

The largest deal was Abbott Laboratories’ $1.4-billion acquisition of Advanced Medical Optics for $22 per share in cash, for a total transaction value of approximately $2.8 billion, inclusive of estimated net debt at the time of closing. Based in Santa Ana, California, Advanced Medical Optics is a global leader in ophthalmic care, with three divisions: cataract surgery, LASIK laser vision correction, and eye care products.

 

Startup FORMA Therapeutics, of Cambridge, Massachusetts, came out of stealth mode just last week, raising $25 million to pursue new compounds that could target pathways disclosed by the Cancer Genome Atlas Project. FORMA entered into a license and option agreement with Novartis in which FORMA will use its chemistry platform to develop inhibitors for an undisclosed protein-protein interaction target in the field of oncology. The license and option pact is worth up to $200 million in upfront fees and milestones.

 

Wyeth Pharmaceuticals, a division of Wyeth, and Santaris Pharma entered into a worldwide strategic alliance to discover, develop, and commercialize new medicines based on Santaris Pharma’s Locked Nucleic Acid drug platform, which allows specific targeting and regulation of microRNAs and messenger RNAs as a means to affect gene expression mediated by the targeted RNAs. Besides and upfront payment of $7 million in cash and $10 million in an equity investment, Santaris stands to receive up to $83 million in milestone payments for each of ten potential targets.

 

The partnering deal with the largest potential payout was the Bristol-Myers Squibb and ZymoGenetics global collaboration for PEG-Interferon lambda, currently in Phase 1B development for the treatment of hepatitis C, and its related development program. The deal includes an upfront payment of $85 million to ZymoGenetics and an additional license fee of $20 million in 2009. ZymoGenetics could receive additional payments of up to $430 million based on pre-defined development and regulatory milestones for PEG-Interferon lambda in Hepatitis C, up to $287 million in development and regulatory milestones for other potential indications, and up to $285 million based on pre-defined sales-based milestones.