Valeant Pharmaceuticals had agreed to buy Salix Pharmaceuticals for about $10.4 billion dollars in an all cash type deal. Valeant currently has many approved drugs in various areas such as: skin, eyes, and oral type drugs. This addition of Salix Pharmaceuticals will give Valeant access to a gastrointestinal pipeline that should add value in the coming year once the transaction closes by Q2 of 2015. Valeant has been criticized by many in the pharmaceutical industry because of the strong tactical approach it has. Valeant tends to be more of an acquirer than a creator. By that we mean it likes to spend more money on acquiring biotech companies as opposed to supplying a strong Research & Development — R&D to create a pipeline full of new drugs. Valeant was mainly criticized by Allergan (AGN) who refused to be acquired by the company because of its approach to spending money on R&D. Allergan who is the maker of a a very successful cosmetic injection drug Botox believes that R&D is an integral part of future survival for a pharmaceutical company. On the other hand Valeant just wants to continue to grow itself by acquiring companies only. To prevent a future hostile takeover Allergan decided that it should probably sell itself to another entity. Therefore back on Nov 17, 2014 Actavis Plc (ACT) had agreed to acquire Allergan for $66 billion dollars in a cash and stock type deal. This acquisition would allow Valeant to save up to $500 million dollars over a 6 month period. The problem though is that it comes at a great cost because Valeant already has a lot of debt on its balance sheet. With this Acquisition Valeant would have a combined total debt of $31 billion dollars.
Celldex Therapeutics (CLDX)
Shares of Celldex rose around 16% on the news that the company had received a breakthrough designation for its lead cancer vaccine known as Rindopepimut — which will be marketed under the name Rintega if ultimately approved. Rindopepimut is a type of immunotherapy vaccine that is injected into the patients skin and then induces an immune response that creates an EFGRvIII cellular response. This is because the company is targeting a rare type of Glioblastoma that occurs in about 30% of the entire Glioblastoma population. These patients express the EFGRvIII mutation protein so it would make sense that Celldex created an immunotherapy vaccine that targets that specific protein. There have been three phase 2 studies that have been completed to date and all three have shown a significant improvement in both median overall survival and progression-free survival. Not only did Rindopepimut achieve such great efficacy for this rare patient population, but it did so with minimal safety issues. The only adverse effects seen in patients taking Rindopepimut were fatigue and rash which were mild in nature. It is important to get a vaccine like this to patients because there have only been three other drugs approved to treat Glioblastoma in the last 20 years.
Vitae Pharmaceuticals (VTAE)
Shares of Vitae Pharmaceuticals tumbled 30% in after hours trading on 2/26/15 when it had announced that its partner Boehringer Ingleheim placed a partnered drug BI 1181181 on a voluntary clinical hold due to safety concerns.The partnered drug is known as a BACE inhibitor which is an oral type drug that is being used to attempt to reduce amyloid plaque levels in the brains of Alzheimer’s patients. The problem was that patients that were given multiple doses of the drug saw an increase in adverse skin reactions. Despite adverse skin reactions the drug BI 1181181 was able to reduce amyloid plague levels in Alzheimer’s patients by about 95% in a pre-clinical trial setting. That is a pretty big improvement considering that Alzheimer’s disease is still a huge unmet medial need in the pharmaceutical industry. Matter in fact the last FDA approved drug to treat moderate to severe Alzheimer’s disease, known as Namenda, was approved back in October of 2013. Vitae has stated though that the company has an additional phase 1 drug compound should the testing of this partnered drug fail to resolve the safety issues. In addition Vitae hosts a pipeline full of other drugs with a different mechanism of action than BI 1181181 therefore reducing the risk of the company.