British consumer goods company Reckitt Benckiser agreed to buy SSL International, the maker of Durex condoms and Scholls footcare products for $3.8 billion in cash, a 33 percent premium to SSL’s closing price the day before the announcement. It was the only major deal, albeit one on the fringes of life sciences, during a slow week.

 

This is not the first time Reckitt has had its eyes on the complementary products in SSL’s portfolio, having courted the company back in 2003 when its shares were trading at a third of their present value.

 

“The acquisition of SSL will provide a step change to Reckitt Benckiser's global health and personal care business, which has been a key driver of Reckitt Benckiser's net revenue growth and profit progression,” said Bart Becht, CEO of Reckitt Benckiser, in a statement.

 

Investor speculation over the possibility of a counter offer from a big pharmaceutical company, most likely Johnson & Johnson or GlaxoSmithKline, quickly drove SSL’s shares above the offer price. Pharma companies have been looking at the over-the-counter sector as a growth driver, especially in emerging markets.

 

Sanofi-Aventis acquired consumer products company Chattem for $1.9 billion just over a year ago as part of its diversification strategy.

 

Reckitt Benckiser expects the SSL acquisition to enhance its businesses in China and Japan, boosting its health and personal care unit to account for about $4 billion in net revenues per year, about one third of its total net revenues.

 

The company will fund the acquisition with cash on hand and a new $1.9 billion credit facility from HSBC. Shares of Reckitt rose 3.4 percent on news of the deal.

 

Private equity firm Ramius sent a letter to the board of directors of Cypress Bioscience offering to acquire the outstanding shares of the company it does not already own for $4 per share in cash, a 60 percent premium over its closing price just before the offer. Ramius, one of Cypress’ biggest shareholder, owns 9.9 percent of Cypress and expressed disappointment over the management of the company.

 

Cypress’ shares have dropped 82 percent in the past five years at the same time that the Nasdaq Composite Index has gained 6 percent.

 

“The Cypress Board needs to realize that a management team that continues to destroy shareholder value by making increasingly risky investments with shareholder money is not a management team to follow blindly,” says Jeffrey Smith, Ramius partner and managing director, in the letter. “The correct conclusion at this juncture is to stop, hire a reputable banker, and maximize value for all shareholders.”

 

Ramius also stated in the letter that it would be willing to consider an acquisition structure that would allow management to continue the development of BL-1020, recently acquired from BiolineRx if they are able to fund the required financing for the phase 2b trial themselves or from a third party financing source, so that shareholders will have an opportunity to retain future upside potential from its development without funding the risk.

 

Drugmaker Eli Lilly completed its acquisition of Alnara Pharmaceuticals, first announced on July 2, and disclosed financial details of the deal. Lilly acquired the private developer of metabolic disease therapeutics for $180 million upfront and up to $200 million in additional payments contingent upon potential future regulatory and commercial milestones.

 

Alnara's lead product liprotamase, a non-porcine pancreatic enzyme replacement therapy, is under review by the U.S. Food and Drug Administration for the treatment of exocrine pancreatic insufficiency caused by cystic fibrosis, chronic pancreatitis, pancreatectomy and other conditions.

 

Pharmaceutical Merck agreed to buy bankrupt Hawaii Biotech’s dengue fever vaccine research unit, expanding its growing lineup of vaccines that includes ones for hepatitis A and hepatitis B; measles, mumps and rubella; human papillomavirus; and influenza.

Hawaii Biotech’s dengue fever vaccine is about to enter early stage human clinical trials.

 

Emeryville, California-based cardiometabolic diagnostics company Tethys Bioscience has raised $33 million, comprising $23 million of venture financing and a $10 million working capital loan. New investors Greenspring Associates and Paul Capital Investments, as well as current investors, participated in the financing while the working capital loan was provided by Oxford Finance Corporation and Silicon Valley Bank. The additional $23 million brings the total raised in the company’s series D round to $48 million.

 

The money will support expanded commercialization of the Tethys PreDx Diabetes Risk Score, a multimarker blood test that enables accurate identification of patients who have a high risk of developing type 2 diabetes within five years. Tethys’ test was first sold in 2009 and more than 15,000 PreDx tests have been ordered since then by doctors for patients suspected to be at risk for the disease. 

 

Of the more than 57 million Americans who are categorized as being at high risk for diabetes based on conventional testing, most will never develop diabetes. PreDx DRS facilitates identification of the 10-20 percent of individuals at the highest, near-term risk, for whom intervention may be most beneficial.

 

The Tethys PreDx platform includes products in development to determine risk for first-time heart attack, osteoporotic fracture and other cardiometabolic diseases with the goal of improving health outcomes and reducing the devastating economic impact that debilitating, preventable diseases have on individuals and society.

 

Cambridge, Massachusetts-based Euthymics Bioscience, a clinical-stage company developing next-generation antidepressants, completed a $24 million series A financing commitment led by Novartis Venture Funds and Venture Investors, with participation by Hambrecht & Quist Capital Management, GBS Venture Partners, and the State of Wisconsin Investment Board. The financing will be available in milestone-conditioned tranches.

 

The initial tranche was used to complete the acquisition of DOV Pharmaceutical and allow for the continued development of EB-1010 acquired from DOV, an antidepressant for the estimated two thirds of patients who do not respond adequately to selective serotonin reuptake inhibitors.

 

Finally, two companies are planning to go public, listing on the Nasdaq at the end of July and beginning of August. Biotech Trius Therapeutics put itself back on the IPO calendar after postponing its initial offering in March to adjust the late-stage trial protocol for its lead antibiotic. After reaching an agreement with the U.S. Food and Drug Administration on the design and endpoints of the planned trial, it hopes to raise $78 million during the week of July 26 by offering 6 million shares at a price range of $12 to $14. Citi has replaced Credit Suisse as the lead underwriter.

 

Pharmaceutical company NuPathe plans to price during the week of August 2, hoping to raise $75 million by offering 5 million shares at a price range of $14 to $16. The company hopes to launch its lead drug Zelrix, a migraine treatment that has completed late stage trials, in 2012. Leerink Swann and Lazard Capital Markets are the lead underwriters.

 

DEALS FOR THE WEEK ENDING JULY 23, 2010

Global Venture Financings
Company	Location	Amount Raised (USD M))	Principal Focus
EndoStim	St Louis, MO	6.0	Medical devices
Advaxis	North Brunswick, NJ	7.5	Infectious disease therapeutics
Surface Logix	Brighton, MA	4.0	Metabolic disease therapeutics
Evoke Pharma	San Diego, CA	6.0	Gastrointestinal therapeutics
Cara Therapetuics	Shelton, CT	15.0	Pain therapeutics
Tethys Bioscience	Emeryville, CA	23.0	Diagnostics
Auspex Pharmaceuticals	Vista, CA	12.0	Improved biologics
DiagnosisOne	Nashua, NH	5.0	Healthcare IT
Euthymics Bioscience	Cambridge, MA	24.0	Neurology therapeutics
Integrated Diagnostics	Seattle, WA	10.0	Diagnostics
AxioMed Spine	Garfield Heights, OH	14.5	Medical devices
Pantec Biosolutions	Ruggell, Liechtenstein	19.1	Drug delivery
Biosystems International	Paris, France	2.7	Diagnostics
Chromotek	Munich, Germany	0.5	Tools/Technology
Myconostica	Manchester, UK	N/A	Diagnostics
TOTAL RAISED US	127.0
TOTAL RAISED NON-US	22.3
Grants
Company	Funding/Contracting Agency	Amount Raised (USD M)	Principal Focus
Acorda Therapeutics	NHLBI C-TRIP	1.0	Cardiovascular therapeutics
Integrated DNA Technologies	NIH Phase II SBIR	N/A	Gene silencing technology
Bioo Scientific	NSF SBIR Phase II	0.1	Drug delivery
Phycal	U.S. Department of Energy	24.2	Algael biofuel
Total Grants	25.3
PUBLIC FINANCINGS
Company	Ticker	Amount Raised (USD M)	Financing Type
PharmAthene	PIP	3.9	PIPE--RDO
Syntroleum	SYNM	10.0	PIPE
Novelos Therapeutics	OTC:NVLT	1.5	PIPE--RDO
Tethys Bioscience	Private	10.0	Loan
Mitralign	Private	5.0	Credit facility
United Orthopedic	Private	20.0	Credit facility and loan
TOTAL PUBLIC FINANCINGS-US	50.4
NON-US	0.0
M&A
Acquirer	Target	Deal Value (USD M)	Focus
Reckitt Benckiser (United Kingdom)	SSL (United Kingdom)	3,800.0	OTC health and personal care products
Meridian Bioscience	Bioline (United Kindgom)	23.3	Tools/Technology
Actelion (Switzerland)	Trophos (France)	12.9	Neurology
Allied Medical	Coridon (Australia)	3.0	Infectious
Encorium Group	Progenitor Holdings (Switzerland)	4.1	CRO
Merck	Hawaii Biotech	N/A	Vaccines
Microarrays management	Vanderbilt University	N/A	Microarrays
Fujirebio Diagnostics (Japan)	Innogenetics (Abbott)	112.9	Diagnostics
Alliances
Company/Licensee	Company/Licenser	Deal Value (USD M)	Focus
ELITech Group (France)	Corgenix Medical	2.5	Diagnostics alliance
Arup Laboratories	deCode Genetics (Iceland)	N/A	Diagnostics partnership
Novozymes (Denmark)	Dedini (Brazil)	N/A	Renewable fuels partnership
Roche (Switzerland)	Exiqon (Denmark)	N/A	Diagnostics joint marketing agreement
Edge Therapeutics	SurModics	N/A	Drug delivery collaboration
Royal Philips (Netherlands)	Dako (Denmark)	N/A	Diagnostics partnership
Qualcomm	Medical Platform Asia (Japan)	N/A	Digital health agreement
Lundbeck (Denmark)	J. David Gladstone Institutes	N/A	Neurology drug discovery