AZ News from The Street 2014

Pfizer back for AstraZeneca? Year-end move seen most likely
Thu, Aug 21, 2014, 11:31AM EDT
By Ben Hirschler

LONDON (Reuters) - Shares in drugmaker AstraZeneca have climbed more than 7 percent this week, fueled by speculation of renewed takeover interest from Pfizer, following an abortive $118 billion (71 billion pounds) takeover attempt in May.

But while British takeover rules mean deal talks could be back on the cards as early as Aug. 26, following the ending of the first of a two-stage cooling-off period, many investors and analysts see the year-end as a more likely time for any return.

"I'm not expecting anything next week," said Dan Mahony, a fund manager at Polar Capital, who increased his stake in AstraZeneca last year. "I know the stock is rallying on anticipation but I suspect if anything is going to happen it is more likely to happen in November or December."

Pfizer Chief Executive Ian Read has made clear he is still considering big deals to revive his firm's pipeline and cut its tax bill - something buying AstraZeneca would allow it to do via a so-called inversion that would shift its tax base to Britain.

However, Read has little leverage right now. Pfizer cannot take the initiative and launch a public bid until Nov. 26 - six months from when it walked away after AstraZeneca rejected its last offer - though AstraZeneca can invite it back from Aug. 26.

British rules also allow Pfizer to make a single offer via a private phone call to AstraZeneca. But this single offer option is rarely used in takeover situations as the bidder has no way to take things further if the target simply says "no".

As a result, Pfizer would need to make a knockout offer at a big premium to its last bid of 55 pounds a share, which many analysts view as unlikely given Read's reluctance to close the gap in May to the 58.85 pounds AstraZeneca indicated it wanted.

CANCER DRUG HOPES

The one factor that could force AstraZeneca CEO Pascal Soriot back to the table this month would be sustained pressure from his shareholders, a number of whom are disgruntled that he let Pfizer's offer slip away.

Yet there has been no high-profile investor rebellion so far - and Soriot has been steadily building up hopes for his company's new cancer drugs, adding respiratory medicines through a deal with Almirall and putting behind him a damaging U.S. investigation into heart drug Brilinta.

AstraZeneca aims to present more convincing evidence for its experimental medicines at a cancer conference in Madrid in late September, and Soriot intends to highlight the potential of the full line-up of new drugs at an investor day on Nov. 18.

The decision to time that investor event just one week before Pfizer has a free hand to renew its approaches suggests AstraZeneca is "very unlikely" to invite Pfizer to make a new offer once the three-month cooling off period ends next week, according to analysts at Jefferies.

Political uncertainty has also played into the British group's hands to some extent, with recent U.S. threats to clamp down on tax inversions provoking fears that such tax-saving deals may in future be blocked.

Following the failure to buy AstraZeneca in May, healthcare bankers says Pfizer has been looking at other targets.

Ireland-based Actavis would represent one good alternative, according to analysts at Leerink, and Berenberg believes Pfizer could even contemplate buying AstraZeneca's larger British rival GlaxoSmithKline.

But neither offers as good a fit as AstraZeneca, whose pipeline of immune system-boosting cancer drugs would complement Pfizer's currently narrow oncology portfolio.

AstraZeneca shares were 2.2 percent high at 43.79 pounds by 1.50 p.m. BST, outperforming a 0.6 percent gain in the European drugs sector.

 

Some serious pulmonary competition heating up:

Roche to buy US biotech firm InterMune for $8.3B


BERLIN (AP) — Swiss pharmaceutical company Roche said Sunday it has reached an $8.3 billion deal to buy InterMune Inc., a California-based developer of treatments for lung diseases.

The companies have reached an agreement under which Roche will acquire InterMune in an all-cash transaction, paying $74.00 per InterMune share, Roche said. That is a premium of 38 percent over InterMune's closing price on Friday.

The acquisition of the biotechnology company, based in Brisbane, California, "will allow Roche to broaden and strengthen its respiratory portfolio globally," the Swiss company said. It added that the transaction is expected to bolster earnings from 2016.

Roche said it plans "a smooth transition of InterMune employees and operations into the Roche organization." The American company hopes to launch its drug pirfenidone in the U.S. later this year.

The drug is designed to treat a terminal lung disease called idiopathic pulmonary fibrosis, or IPF, which causes inflammation and scarring of the lung that makes it hard for patients to breathe. InterMune began selling it in Europe under the name Esbriet in 2011 and it is also available in Canada and some other countries.

 

Roche's InterMune Acquisition Underscores How It And Pfizer Are On Different M&A Paths
Forbes
8/24/2014, 9:26PM

Roche has just announced the acquisition of the U.S. biotech company InterMune for $8.3 billion. The driver for Roche was to gain access to InterMune’s drug, pirfenidone (trade name, Esbriet), which is already approved in Canada and Europe for idiopathic pulmonary fibrosis (IPF). IPF is a deadly lung-scarring disease which affects 50,000 – 70,000 people in the U.S. and 80,000 to 110,000 in Europe. While still under review by U.S. regulatory authorities, Roche’s acquisition signals its belief that pirfenidone will also gain U.S. approval. How big a product can pirfenidone be? Consensus forecasts compiled by Thomson Reuters Pharma peg annual sales at greater than $1 billion in 2019 – a nice addition to Roche’s stable of pulmonary compounds including Xolair (asthma) and Pulmozyme (cystic fibrosis).

Roche’s move is just the latest of a series of similar acquisitions over the past few months as it has spent about $2.5 billion for the purchases of Seragon Pharmaceuticals, Santaris, and Genia. The InterMune acquisition is the largest since 2009 when Roche spent $46.8 billion to acquire the remaining 44% of Genentech. But over the past few years, Roche’s M&A strategy has focused on “bolt-on” acquisitions. As Roche CEO, Severin Schwan, said in the press release announcing the merger:

“We are very pleased that we reached this agreement with InterMune. Our offer provides significant value to InterMune’s shareholders and this acquisition will complement Roche’s strengths in pulmonary therapy. We look forward to welcoming InterMune employees into the Roche Group and to making a difference for patients with idiopathic pulmonary fibrosis, a devastating disease.”

The press release goes on to say that Roche plans a smooth transition of InterMune employees and operations into the Roche organization. It is pretty clear from these statements and its behaviors that Roche looks at these recent acquisitions as a growth strategy focused on building new expertise into the organization and not necessarily obtaining a major asset like pirfenidone and then dismantling the acquired company.

While Roche was making this move, rumors have again surfaced that Pfizer will make another run at acquiring AstraZeneca. Back in May, Pfizer offered a whopping $118 billion to buy AstraZeneca, but this offer was rejected. This behavior was not unique in Pfizer’s history, as it had made previous similar acquisitions for Warner-Lambert ($112 billion in 2000), Pharmacia ($60 billion in 2004) and Wyeth ($68 billion in 2009). Pfizer’s AstraZeneca interests are two-fold: the AstraZeneca portfolio/pipeline fills some holes that Pfizer has particularly in cancer immunotherapy and pulmonary disease; and, more importantly, a Pfizer acquisition of AstraZeneca could allow Pfizer to carry out an “inversion” where it could become a U.K. based company and thereby result in avoiding a great deal of U.S. corporate taxes.

The Pfizer major acquisition strategy appears to have become a core of its growth plan. From a business standpoint, the AstraZeneca acquisition also makes great business sense. However, the difference in the M&A strategies between Roche and Pfizer is pretty stark, particularly if you are in the R&D division. One company is seeking “bolt-ons” to enhance its portfolio and capabilities. The other seeks to make huge take-overs and then gain “synergies” by slashing costs, closing sites, and eliminating thousands of jobs.

My guess is that Roche employees are heading to work on Monday feeling pretty good about their company’s latest move. Conversely, the Pfizer folks are again wondering if another major acquisition is imminent and whether they will again be threatened with the loss of their jobs. Differing philosophies can also lead to differences in employee engagement.

 

Cholesterol control news:

Regeneron and Sanofi to Present Results from Four Phase 3 Alirocumab Trials in Hot Line Session at ESC Congress 2014

Regeneron Pharmaceuticals, Inc. 8 hours ago

TARRYTOWN, N.Y. and PARIS, Aug. 25, 2014 /PRNewswire

Regeneron Pharmaceuticals, Inc. (REGN) and Sanofi (EURONEXT: SAN and NYSE: SNY) today announced that details from four pivotal trials in the alirocumab ODYSSEY clinical program will be presented on Sunday, August 31, during a Hot Line session at ESC Congress 2014 in Barcelona, Spain, the world's largest cardiology meeting. The data will also be highlighted in the official ESC press conference on August 31, at 09:00 CET / 03:00 ET.
Alirocumab is an investigational monoclonal antibody targeting PCSK9 (proprotein convertase subtilisin/kexin type 9). Top-line results from nine ODYSSEY Phase 3 trials were announced in late July 2014. The four trials that will be presented at ESC Congress 2014 include:
• ODYSSEY LONG-TERM – The 2,341-patient, double-blind trial is evaluating the long-term safety and efficacy of alirocumab versus placebo in combination with maximally tolerated lipid-lowering therapy, including statins, in patients with hypercholesterolemia who are at high cardiovascular (CV) risk.
• ODYSSEY COMBO II – The 720-patient, double-blind trial is evaluating the long-term safety and efficacy of alirocumab versus ezetimibe in combination with a maximally tolerated statin dose in high CV risk patients with hypercholesterolemia.
• ODYSSEY FH I and FH II – These trials involve a total of 738 patients with an inherited form of high cholesterol known as heterozygous familial hypercholesterolemia (HeFH) and compare alirocumab to placebo in combination with maximally tolerated lipid-lowering therapy, including statins.

 

3:55 pm ET
Aug 28, 2014
AstraZeneca Pops on Possibility of Another Pfizer Bid
By Maureen Farrell and Liz Hoffman

Some AstraZeneca shareholders seem to hope so. The company’s London-listed shares in the U.K. closed at a three-and-a-half month high Thursday after gaining 9.5% in the past week.

The rise in AstraZeneca’s stock comes days before Pfizer may be able to make a run at AstraZeneca, which spurned its last $120 billion takeover offer back in mid-May.

Under U.K. takeover rules, Pfizer can come back to bid for AstraZeneca six months after Pfizer dropped its offer on May 28, 2014. Yet, a suitor may return 90 days later with one private approach or the target, in this case AstraZeneca, can extend an invitation. Next Tuesday is 90 days after Pfizer walked away.

As of May, Pfizer was still balking at the £58.50-a-share price that AstraZeneca set as the floor for negotiations. Pfizer had bid £55 a share.

Pfizer has made no indications since then that it is willing to go higher. Pfizer CEO Ian Read said on the company’s second-quarter earnings call that he has received positive feedback from shareholders over its decision not to raise its offer.

Still at least one analyst has said that Pfizer needs to make a big acquisition to counteract its declining sales and pricing power in the U.S.

AstraZeneca’s shares closed at £44.79 Thursday. That’s far below below the price AstraZeneca was pushing for and even Pfizer’s final offer. But it marks a sharp premium to where they traded before news of Pfizer’s bid broke last spring.

Any deal between the two companies is expected to be structured as a so-called inversion deal, in which Pfizer would reincorporate in the U.K. to take advantage of that nation’s lower tax rate, among other perks.

Since Pfizer made its initial offer, the drama around inversion deals has heated up, with many in Congress calling for an end to these deals. The Obama administration has weighed how it could diminish the economic benefits of these deals.

 

Why AstraZeneca (AZN) Stock Is Higher Today
BY Amanda Schiavo
08/29/14 - 10:37 AM EDT

NEW YORK (TheStreet) -- Shares of AstraZeneca PLC (AZN_) are higher by 1.98% to $75.71 in mid-morning trading on Friday, as speculation stirs suggesting Pfizer Inc. (PFE_) might resume takeover discussions, the Wall Street Journal reports.

The pharmaceutical company rejected the $120 billion bid Pfizer made back in May.

Additionally, shares of AstraZeneca may be getting a boost after the company moved its immune-oncology medicine MEDI-4736 into a mid-stage study of colorectal cancer, Reuters reports.

The medicine is designed to fight tumors and will be tested in 48 patients with the advanced disease.

Separately, TheStreet Ratings team rates ASTRAZENECA PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ASTRAZENECA PLC (AZN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels.
Compared to its closing price of one year ago, AZN's share price has jumped by 46.55%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AZN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
Net operating cash flow has increased to $2,079.00 million or 29.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.19%.
The gross profit margin for ASTRAZENECA PLC is currently very high, coming in at 91.52%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.57% trails the industry average

 

Teva begins to end Symbicort's exclusivity, the patents expire first in Europe.


UK court backs Teva rival to AstraZeneca lung drug
Reuters
3 hours ago

TEL AVIV, Sept 3 (Reuters) - Teva Pharmaceutical Industries said Britain's High Court had handed down a positive judgment regarding its case against a patent for AstraZeneca's Symbicort lung drug.

Israel-based Teva said it had already launched its dry powder inhaler, DuoResp Spiromax, in Britain on Monday - before the court ruling - but that the judgment dispelled any risks associated with the launch.

The inhaler has already been launched in Germany, Denmark and Portugal and the British court ruling will facilitate its sale in other European markets, the company said on Wednesday.

A spokesman added the inhaler would be a "significant" product for the company, but did not give any numbers.

Symbicort is AstraZeneca's third-biggest selling drug, with worldwide sales of just under $1.9 billion in the first half of 2014.

While Teva's product uses the same active ingredients as Symbicort, formoterol and budesonide, the inhalers differ in design.

 

It looks like everyone who said that the difficulty in validating a new delivery device would protect Symbicort for years to come, despite the patents no longer being in force, were being overly optimistic. Teva has already gotten that task done in Europe. They will still need to get the FDA to approve it in order to market their knockoff in the US, but I'm sure that they are working on that right now. $2 billion a year world wide is an awful lot of incentive to get the job done. Advair is also under assault similarly.

 

I hope they get it out in the United States next week! Frenchie, what do you think about that you French Fuck??

 

Follow up story on Symbicort and Teva in the UK:



Teva Wins Patent Litigation vs. AstraZeneca in UK
By Zacks Equity Research 18 hours ago


Teva Pharmaceutical Industries Ltd. (TEVA) received a favorable ruling from the UK High Court in a patent infringement case related to its generic version of AstraZeneca’s (AZN) Symbicort (fixed dose combination of formoterol/budesonide).

The Court ruled that the patent (EP 1,085,877) protecting AstraZeneca’s Symbicort for the SMART (Single inhaler Maintenance And Reliever Therapy) indication was invalid.

Teva said that the UK High Court also rejected AstraZeneca’s patent amendment request for Symbicort. The Court’s verdict in favor of Teva has paved the way for the company to launch its own formoterol/budesonide combination product, DuoResp Spiromax, in the UK.

We note that Teva won multiple patent litigation cases against AstraZeneca in the past. Teva had previously revoked two other patents covering AstraZaneca’s fixed dose combination of formoterol/budesonide − EP 0,613,371 (asthma) and EP 1,014,993 (chronic obstructive pulmonary disease) before the European Patent Office and the Norwegian court.

Reslizumab Meets Primary Endpoint

Meanwhile, Teva’s asthma candidate, reslizumab, has met the primary endpoint in two phase III studies. Reslizumab showed a statistically significant reduction in the frequency of clinical asthma exacerbations in patients with inadequately controlled moderate-to-severe asthma and elevated levels of blood eosinophils. The company intends to file for reslizumab’s approval in the first half of 2015, starting with the U.S., followed by the EU and other regions.

Our Take

Given Teva’s dependence on its generics business for growth and the rising competition in the generics market, we are concerned about the company’s top-line performance. However, the latest court ruling in favor of Teva’s generic version of AstraZeneca's Symbicort should boost the company’s performance in the EU.

 

Teva isn't really a pharmaceutical company, its a legal firm, just like most generics, they're just good at it.

 

Same as AZ, and AZ is good at it too. It's just that AZ claims it is an R&D org., Teva comes right out as a generics firm. That's AZ's future if there is one.

Symbicort is and has always been an obvious combination, and the legal team at AZ has sucked billions out of the American healthcare industry despite it.

 

Damn you people are long winded.

 

AstraZeneca's self-styled 'blockbuster' benralizumab tanks in severe COPD study
FierceBiotech | September 8, 2014

AstraZeneca was forced to concede a clinical defeat on Monday, noting that one of its top respiratory drugs in the clinic failed a study for severe chronic obstructive pulmonary disease. But while investigators also flagged a higher rate of adverse events for benralizumab than the placebo arm, the pharma giant shows no signs of backing away from a treatment it's billed as a potential $2 billion per year product.

 

Saying a failed product is still worth $2 billion a year to placate investors is just silly. The current product and future product line estimates are inflated.

 

Doesn't sound like much of a product line.

 

They will try, as always, to "market" their way out of the poor results with catchy ads and a catchy name if they can ever get past the regulators.

 

As expected and predicted, AZ's pipeline is starting to dissolve away into obscurity. Pascal the French Fool, turned down $119 BILLION from Pfizer. The shareholders were royally screwed by this idiot. Now another "blockbuster" proves to be a joke. I believe this loser was a Medi drug.

Come one Frenchie, cut a deal with Pfizer while we can!!

 

Maybe AZ should start selling placebos? They seem to be so much better than the actual drugs in our pipeline!

 

FDA faces pressure to green-light generic versions of AZ's pricey Nexium
September 8, 2014 | By Arlene Weintraub

Back in 2008, Indian generics maker Ranbaxy made a deal with AstraZeneca ($AZN) to launch its Nexium copycat in May of this year. So why are Americans still unable to buy cheap versions of the blockbuster heartburn pill, which brought in more than $2 billion in U.S. sales last year?

The FDA is under increasing pressure to answer that question, most recently from Connecticut's attorney general George Jespen. Last week, Jespen wrote the FDA urging the agency to either approve Ranbaxy's generic Nexium or to waive a mandatory 180-day waiting period that, under the provisions of the Hatch-Waxman Act, is preventing other generic drugmakers from jumping into the market.

Jespen's request was part of his response to a "citizen petition" filed in May by a law firm representing an unnamed generics manufacturer. Problem is, the FDA has banned Ranbaxy from shipping products from some of its plants, including the one expected to make generic Nexium. So, the agency hasn't approved Ranbaxy's application for the drug, leaving other companies that want to sell their versions in an indefinite holding pattern.
The Biotech Primer: An insider's guide to the science driving the biotech and pharma industries

The delay irks Jespen, whose letter to the FDA said his state's health care plans have spent nearly $75 million on Nexium since 2012.

"The manifest result of this inaction is higher prices and a dead-stop bottleneck preventing more than a half-dozen generic drug manufacturers lined up behind Ranbaxy from entering the market," Jespen said in a press release.

Jespen added that the delay is further compounded by the fact that Ranbaxy and AstraZeneca are working together to manufacture and market branded Nexium--a provision that was part of their 2008 patent settlement. "Ranbaxy and AstraZeneca should be competing--instead, they are working together to defeat competition and harm consumers," Jespen said.

Drug industry critics have long contended that so-called pay-for-delay patent settlements harm consumers and the American health care system by pushing up drug expenses. And there's little doubt that Nexium is one of the biggest drivers of increased spending on prescription drugs: In April, Express Scripts' annual Drug Trend Report revealed that overall drug spending jumped 5% in 2013 and that Nexium was the priciest of what it called "traditional" drugs, costing the pharmacy benefits provider $23.76 per member per year.

Ranbaxy's manufacturing woes have only added to the hand-wringing over America's rising financial burden for brand-name drugs. The FDA banned products from the Ranbaxy plants because of fears that the company faked data on their drugs. In addition to delaying generic Nexium, the ban prevented Ranbaxy from introducing a cheap version of Roche's ($RHHBY) antiviral Valcyte, which lost its patent protection last year. In June, Ranbaxy finally won approval to market generic Diovan, Novartis' ($NVS) heart drug that lost its patent protection in 2012 but, thanks to Ranbaxy's delayed launch, still brought in $1.7 billion in sales for the Swiss drug giant last year.