Print“After thorough and extensive analysis with our financial advisors, Cypress’ board unanimously concluded that this transaction with Ramius and Royalty Pharma provides significant cash value to our stockholders.”
After months of wrangling, Cypress Bioscience finally agreed to be bought by Ramius, one of its majority shareholders. The deal was sealed after Ramius teamed up with Royalty Pharma to offer Cypress shareholders $6.50 per share in cash, valuing the transaction at $255 million. It was one of the few purchases in the traditional innovative drugs space, however as life sciences companies around the world embarked on a $6.7 billion shopping spree during the waning days before Christmas.
Hedge fund Ramius was unhappy with the way management was running Cypress, a specialty pharmaceutical that develops drugs to treat central nervous system disorders. As a shareholder with close to a 10 percent stake in the specialty pharma, it decided to make an unsolicited offer to acquire the company for $4 per share in July, a 60 percent premium to its trading price of $2.50 before the offer. Cypress’ board rejected it quickly, refused to open its books to Ramius, and quickly began evaluating its options. A hostile takeover attempt in September at $4.25 a share was also rejected. Finally on December 9, Ramius offered to acquire the company for $5.50 a share, an offer that would be rescinded if not acted on within 24 hours. That brought Cypress to the negotiating table.
The final purchase price represents a 160 percent premium to Cypress’ unaffected share price on July 16, 2010, the last trading day before public disclosure of Ramius’ first offer.
“For more than two months, Cypress’ Board of Directors undertook a comprehensive evaluation of the Company’s strategic alternatives,” says Daniel Petree, lead independent director of Cypress’ board. “After thorough and extensive analysis with our financial advisors, Cypress’ board unanimously concluded that this transaction with Ramius and Royalty Pharma provides significant cash value to our stockholders and is in the best interests of our stockholders, customers, and employees.” The tender offer is open until December 29, 2010.
Novartis also sweetened its offer for the eye care company Alcon and finally sealed the deal for the remaining shares it did not own. The biopharma had acquired three quarters of the giant eye care company from Nestle, paying $10.5 billion in April 2008 and another $27 billion in January 2010. Minority shareholders, however, refused to tender their shares because Novartis’ offer to them was significantly less that what it agreed to pay Nestle. The new deal, which Alcon’s board has approved, values the outstanding shares at $168 per share. Payment will be made in Novartis shares, and, if necessary, a cash contingent value amount to result in a total value of $168 per share.
After the merger is complete, Alcon will become the second largest division within Novartis with Ciba Vision and select Novartis ophthalmic medicines integrated into Alcon. The combined company will have more than $8.7 billion in sales covering more than 70 percent of the eye care segment.
Fresh off its $3.8 acquisition of SSL in July, which gave it Durex condoms and Scholls footcare, U.K. consumer goods group Reckitt Benckiser announced that it will pay $726 million for India’s Paras Pharmaceuticals, according to Reuters. Private equity-backed Paras makes over-the-counter medications. In October, India’s Business Standard newspaper reported that GlaxoSmithKline, Sanofi-Aventis , Novartis and Johnson & Johnson had all submitted concrete bids to acquire majority stake in Paras.
GlaxoSmithKline also expanded its consumer healthcare division with the purchase of Maxinutrition, Europe’s premier sports nutrition company, for $256 million in cash from its private equity owners. Maxinutrition produces Maximuscle, Maxifuel and Maxitone.
Maxinutrition’s products will complement GSK’s carbohydrates nutrition business, and allow the company to contemplate a range of innovations in the future, CEO Andrew Witty told Reuters in an interview. “You could then imagine a whole series of new products at all levels of the system--you could imagine elite sports products, you could imagine nutrition for the elderly, and you could also imagine daily nutritional supplements for people in Africa,” he told Reuters.
Thermo Fisher Scientific is expanding into the water-analysis business in China with the acquisition of Sunnyvale, California-based Dionex for $2.1 billion. The $118.50 per share offer price represents a premium of 21 percent over its closing value before the announcement. Dionex made the first ion-chromatography system for water analysis. The acquisition will increase Thermo Fisher’s business in China, where there is demand for measuring water quality, according to the companies.
Finally, Japan’s Otsuka Holdings completed its IPO, raising $2.4 billion, the largest initial offering on record for a pharmaceuticals firm. Otsuka is Japan’s second largest drugmaker by sales after Takeda Pharmaceutical.
DEALS FOR THE WEEK ENDING DECEMBER 17, 2010
| Global Venture Financings | |||
| Company | Location | Amount Raised (USD M) | Principal Focus |
| NovImmune | Plan-Les-Ouates, Switzerland | 20.6 | Inflammatory therapeutics |
| Semprus BioSciences | Cambridge, MA | 18.0 | Antibacterial coatings |
| QuantaLife | Pleasanton, CA | 17.2 | PCR technology |
| Nano-Terra | Cambridge, MA | 17.2 | Nanotechnology |
| Small Bone Innovations | New York, NY | 15.0 | Medical devices |
| Sarasota Medical | Sarasota, FL | 1.1 | Wound care |
| RQx Pharmaceuticals | San Diego, CA | 1.0 | Antibiotics |
| Mobisante | Redmond, WA | N/A | Ultrasound devices |
| Total Raised US | 69.5 | ||
| Total Raised Non-US | 20.6 | ||
| Grants and Contracts | |||
| Company | Funding/Contracting Agency | Amount Raised (USD M) | Principal Focus |
| Grants | |||
| Trophos (France) | European Union for MitoCare project | 7.9 | Cardiovascular |
| Stellar Biotechnologies (Canada) | National Science Foundation | 0.1 | Biomanufacturing |
| Kane Biotech (Canada) | Manitoba TCP | 0.1 | Microbial films |
| Repligen | Muscular Dystrophy Association | 1.4 | Musculoskeletal |
| Affiris (Austria) | Michael J. Fox Foundation | 0.5 | Parkinson's vaccine |
| Discovery Laboratories | NIH Fast Track SBIR Phase I | 0.6 | Respiratory |
| Akonni Biosystems | NSF Phase I | 0.2 | Infectious |
| Contracts | |||
| Lonza (Switzerland) | DoD-to develop PermaDerm | 18.0 | Dermatology |
| Total Grants and Contracts | 28.8 | ||
| PUBLIC FINANCINGS | |||
| Company | Ticker | Amount Raised (USD M) |
Financing Type |
| Otsuka Holdings | Tokyo:4578 | 2,400.0 | IPO |
| Pharming (Netherlands) | Euronext:PHARM | 21.4 | PIPE |
| Evogene (Israel) | TASE:EVGN | 12.0 | PIPE (Bayer CropScience) |
| Genta | OTC:GNTA | 5.0 | PIPE |
| WaferGen Biosystems | OTC:WGBS | 5.0 | PIPE |
| YM Biosciences (Canada) | YMI | 40.0 | Follow on |
| Bioniche Life Sciences (Canada) | TSX:BNC | 14.4 | Follow on |
| Cadence Pharmaceuticals | CADX | 8.0 | Exercise of overallotments |
| WaferGen Biosystems | OTC:WGBS | 2.0 | Loan from Oxford Finance |
| International Stem Cell | OTC:ISCO | 25.0 | CEFF |
| Cardica | CRDC | 10.0 | At-the-market commitment |
| MedShape Solutions | Private | N/A | In-Q-Tel strategic investment |
| Zealand Pharma (Denmark) | CSE:ZEAL | 4.0 | Warrant exercise |
| TOTAL PUBLIC FINANCINGS-US | 55.0 | ||
| NON-US | 2,491.8 | ||
| M&A | |||
| Acquirer | Target | Deal Value (USD M) |
Focus |
| Thermo Fisher Scientific | Dionex | 2,100.0 | Tools/Technology |
| Novartis (Switzerland) | Alcon (Switzerland) | 1,900.0 | Ophthalmic |
| Galderma (L'Oreal and Nestle-Europe) | Q-Med (Sweden) | 970.0 | Aesthetics |
| Reckitt Benckiser (United Kingdom) | Paras Pharmaceuticals (India) | 726.0 | OTC drugs |
| Samsung (South Korea) | Medison (South Korea) | 262.8 | Medical equipment |
| GlaxoSmithKline (United Kingdom) | Maxinitrition (United Kingdom) | 255.0 | Wellness |
| Ramius | Cypress Bioscience | 255.0 | Specialty pharma |
| Prestige Brands | J&J's Dramamine business | 76.0 | Motion sickness |
| H.I.G. Capital | Matrixx Initiatives | 75.2 | OTC healthcare |
| Gen-Probe | GTI Diagnostics | 53.0 | Diagnostics |
| Meda (Sweden) | GlaxoSmithKline OTC products (United Kingdom) | 34.3 | Over-the-counter |
| Syneron Medical (Israel) | Pharos Life (Israel) | 15.8 | Aesthetics |
| Bohia Pharmaceuticals (China) | Shandong Daxin Microbiology Pharmaceutical Industry (China) | 7.2 | Traditional Chinese Medicines |
| Shanghai Fosun Pharmaceuticals (China) | Shenyang Hongqi Pharmaceutical (China) | N/A | Infectious |
| HELM (Germany) | Amarin Technologies (Argentina) | N/A | Drug delivery |
| Alliances | |||
| Company/Licensee | Company/Licenser | Deal Value (USD M) |
Focus |
| MedImmune (AstraZeneca-United Kingdom) | Develogen (Evotec-Germany) | 341.3 | Diabetes drug license and collaboration |
| GlaxoSmithKline (United Kingdom) | Impax Pharmaceuticals | 186.5 | Parkinson's drug license |
| Tesaro | Opko Health | 121.0 | Oncology drug license |
| Mundipharma (United Kingdom) | Infinity Pharmaceuticals | 110.0 | Extension of cancer drug alliance |
| Tanabe Research Labs (Mitsubishi Tanabe Pharma-Japan) | Anaphore | 110.0 | Autoimmune disease partnership |
| Paladin Labs (Canada) | ProStrakan (United Kingdom) | 77.8 | Emerging market marketing license |
| GlaxoSmithKline (United Kingdom) | Unigene Laboratories | 8.0 | Extension of licensing agreement |
| Amgen | BioFocus (Galapagos-Belgium) | 2.6 | Extension of drug discovery collaboration |
| Ninepoint Medical | Massachusetts General Hospital | N/A | License to 188 patents |
| Integrated BioBank of Luxembourg | WaferGen Biosystems | N/A | Personalized medicine alliance |
| Pfizer | DiaGenic (Norway) | N/A | Alzheimer's collaboration |
| Recordati (Italy) | Nymox Pharmaceutical | N/A | Genitourinary therapeutic license |
| H. Lundbeck (Denmark) | Vernalis (United Kingdom) | N/A | Drug discovery collaboration |
| Watson Pharmaceuticals | Preglem (Gedeon Richter-Hungary) | N/A | Genitourinary therapeutic license |
| H. Lundbeck (Denmark) | Zenobia Therapeutics | N/A | CNS therapeutics collaboration |
| Sanofi-Aventis (France) | Merck KGaA (Germany) | N/A | Cancer drugs alliance |
| Bayer CropScience (Germany) | Evogene (Israel) | N/A | Crop trait collaboration |
December 17, 2010
http://www.burrillreport.com/article-ramius%e2%80%99_persistence_pays_off.html
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