In a recent interview with the Star-Ledger, New Jersey-based Celgene (NASDAQ: CELG) Chief Executive Officer Sol J. Barer, Ph.D. provided some insight as to the integration plans for Pharmion products and intellectual capital. Following is a portion of that Q&A.
Q: Celgene already was expanding its presence abroad. What does adding Pharmion do for you internationally?
A: We have a sales force all over Europe right now. We have a very good infrastructure that's very leveragable. We're selling Revlimid, and doing very well right now. With the Pharmion integration, we're adding thalidomide, which is approved in first-line multiple myeloma (in Europe). Revlimid is approved in relapsed or previously treated multiple myeloma. We also have a marketing approval for Vidaza, the first therapy that will show a survivability advantage in patients. Rather than partner, what we do is retain the value for our shareholders by building our own infrastructure - clinical, regulatory - around the world. We'll use distributorships in certain countries or certain regions.
Q: What happens to Pharmion's operations? Will you keep any presence in Colorado?
A: We're going through the integration planning process. We're looking at as many positions and many levels and all the products. We're very impressed with with a lot of people there, at all levels. As you combine two commercial, public entities, you don't need two CFOs, you don't need two CEOs -- thank god. There's clearly going to be overall consolidation. What we're going to try to do is retain as many of the people that are motivated and excited to stay with Celgene.
Q: A year ago, you said you might be looking for bigger quarters around Summit because the company was growing and you disliked satellite offices. What are your plans now?
A: We'll have multiple sites. (Pharmion) has a major clinical site in Kansas City, which we'll keep. We'll probably be adding a building or buildings here on-site. We've gotta live with the fact that there'll be multiple locations with the major company we're becoming. I'm pleased to say the sun never sets on Celgene, to borrow a phrase. It's difficult. We're used to addressing the company all at once, and now that can't happen. If it's 7 o'clock in the morning here, it's 9 at night in Japan but 4 in the morning in California. So when we try to have meetings, we try to move them around.
Q: Even before Pharmion, Celgene seemed to be stepping up its licensing and partnership deals. Will that continue?
A: A lot of these are driven by specific opportunities that often are difficult to predict. There will be a period of time subsequent to the Pharmion acquisition where a lot of integration will go on. While that will not affect the smaller deals, it probably will affect the larger collaborations, which would be a lower priority while we're integrating the new company.
Q: How has your job changed in the past year?
A: One of the big challenges is really, as we grow, to maintain the entrepreneurial spirit, the almost family atmosphere that's characterized Celgene through the years. I think that's been important to our success. I view that as one of my greater challenges.
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Thursday, May 08, 2008
Where Does Pharmion Go From Here?
Monday, March 10, 2008
Pharmion: The Deal is Done!
You know a deal is done when one goes to the Pharmion.com website and the Celgene (NASDAQ: CELG) site pulls up. Last Thursday Pharmion shareholders approved the acquisition and by Friday it was signed, sealed and delivered…$2.9B later or $25 in cash plus 0.8367 shares of Celgene for each share of Pharmion.
Congratulations to both teams for getting the deal done and so quickly. Celgene management will announce financial guidance relative to the acquisition and provide an update on initiation of the global integration strategy on 8 May.
IMHO this deal bodes potentially extremely well for the community if it follows along the continually evolving story of the Myogen-Gilead (NASDAQ: GILD) deal where there has been i) an infusion of cash into the ecosystem and ii) an incredible infusion of talent into the ecosystem. Already start-ups are springing up along the Front Range headed by former Myogen management. Let's hope that we see the same pattern emerge from the folks at Pharmion.
***NOTE*** Take a look at the new Boulder Biotech Company Tree (HERE)!
***NOTE*** Read the new eBook CLSDF 2007 - What's In A Year? (HERE)!
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Friday, February 08, 2008
PRHM Deal Not Good Enough, For Some...
Just when you think the $2.9B Celgene (NASDAQ: CELG) acquisition of Pharmion (NASDAQ: PHRM) is all but a done deal enter one Steven A. Cohen of S|A|C Capital Advisors, a private asset management firm who with its sub CR Intrinsic Investments, hold in aggregate approximately 3 million shares of Pharmion and thus near 10% of the company. Cohen believes that the approaching $3B offer from Celgene may be significantly undervaluing the deal.
How you ask? Cohen is considering the market space of Pharmion’s Vidaza® asset, used for treating the bone marrow disease Myelodysplastic Syndrome (MDS), a first in class compound generating approximately $200M per year and growing. There just so happens to be another player in the MDS space who goes by the name of MGI Pharma with their Dacogen® product. Now from my quick web search it appears as though FDA approval for Daccogen® in MDS was approved in May of 2006.
So then it would appear that there is some MDS Dacogen® survival data anticipated and Cohen’s bet is that if the yet to be reported data fails (inferior) to match the already reported Vidaza® survival data then the Pharmion asset would be poised to capture in excess of half of the MDS market. And this is exactly why Cohen wrote a letter (I thought the letter may be posted to the SEC site, it is listed as a Exhibit B in the SC13 filed on Wednesday but no such luck!) to Pharmion management stating that the current Celgene offer may be undervaluing their assets by as much as $8 to $28 per share, bring an expectation of a sale price in the $80 to $100 range and thereby yielding S|A|C Capital an additional $24M to $60M, now that’s no rounding error! It will be interesting to stay tuned and see how the drama unfolds…
***NOTE*** Read the new eBook CLSDF 2007 - What's In A Year? (HERE)!
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Tuesday, February 05, 2008
Array Q’ly Report: Well Positioned!
Array Biopharma (NASDAQ: ARRY) is an incredibly well positioned tour de force biopharmaceutical company with a strong balance sheet, a vast portfolio of six wholly owned compounds, and a variety of pharma partnered development efforts with AstraZeneca (NYSE: AZN), Celgene (NASDAQ: CELG), InterMune (NASDAQ: ITMN) and Roche (Swiss: RO.SW). President and CEO Robert Conway and team have done a masterful job navigating the turbulent financing waters with a quarterly burn of approximately $20M per quarter with a current cash position of approximately $140M.
The conference call this morning kicked off bright and early at 7:00am. The next value inflection point shall come via the completion of a Phase II study of ARRY-797, a pan-cytokine inhibitor, in acute inflammatory pain, at some point in February. Here is a provided summary of recent accomplishments within the ARRY wholly owned assets for the quarter.
Proprietary Research Programs
- Completed enrollment of a Phase II trial with ARRY-797, a novel inhibitor of TNF, IL-1 and IL-6 as well as PGE2, to treat patients with post-operative dental pain.
- Completed a Phase Ib multiple ascending dose trial with the MEK inhibitor, ARRY-162, added to methotrexate in patients with stable rheumatoid arthritis.
- Initiated a Phase II trial with ARRY-162 added to methotrexate in 200 patients with active rheumatoid arthritis.
- Presented Phase I data on ARRY-543, an ErbB-2 and EGFR inhibitor, at the 2007 International Conference on Molecular Targets and Cancer Therapeutics and at the San Antonio Breast Cancer Symposium. ARRY-543 produced stable disease in refractory patients with advanced solid tumors and was well-tolerated.
- Began enrolling patients in a Phase I expansion trial at the maximum tolerated dose for ARRY-543; half of the patients will have trastuzumab-resistant ErbB2-positive metastatic breast cancer and half of the patients will have other ErbB-family-driven cancers.
- Completed patient enrollment in a Phase I dose escalation trial of ARRY-520, a small molecule kinesin spindle protein inhibitor, and started the expansion phase to further evaluate safety, tolerability and preliminary efficacy at the max tolerated dose.
- Completed the first site initiation for a Phase I clinical trial of ARRY-380, an oral, selective ErbB-2 inhibitor for cancer, and anticipate dosing patients this quarter.
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Wednesday, January 30, 2008
CO EU Hedge: Pharmion and Celgene
A very interesting few days for Pharmion (NASDAQ: PHRM) and Celgene (NASDAQ: CELG) and how they are faring in their product approval efforts in Europe.
The European Medicines Agency issued a positive opinion to recommend approval of Pharmion’s Thalidomide® for use in combination with melphalan and prednisone as first line treatment for patients with untreated multiple myeloma, aged 65 years or older or ineligible for high dose chemotherapy. Such an opinion often yields a final marketing approval via the European Commission, typically to occur within the window of a quarter. So let’s hope for smooth sailing over the next 12-weeks or so on Thalidomide®.
On a less positive note for Celgene, a European advisory committee recommended against approving its drug Revlimid® as a treatment for anemia patients (the drug is already approved to treat multiple myeloma). The European Medicines Agency's Committee for Medicinal Products for Human Use recommended against expanding Revlimid's approval to include treating transfusion-dependent anemia patients with blood disorders known as myelodysplastic syndrome.
Recall that the share price of CELG will effect the final terms in the Pharmion acquisition, you can read more about that in a previous post (here).
***Update*** It is the homestretch for the CLSDF Readers Company of the Year Award. FINAL DAY TO CAST YOUR BALLOT! Voting ends on 31 January.
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Monday, January 07, 2008
Source MDx: And the Band Played On...
CLSDF previously highlighted Source MDx, read the post (here)…there is nothing hotter than incorporating validated biomarkers under the umbrella of personalized medicine and that is what continues to transpire at the Source MDx Boulder headquarters. An impressive list of partners and clients of Source MDx include Abbott Labs (NYSE: ABT), Amgen (NASDAQ: AMGN), Celgene (NASDAQ: CELG), Eli Lilly (NYSE: LLY), and Pfizer (NYSE: PFE), to name a few. Now long time partner Pfizer has agreed to a new multi-year collaboration to incorporate the Source MDx platform into the Pfizer cancer and inflammation development programs. So that may be associated with one or more molecules in the Pfizer rheumatoid arthritis, transplantation rejection, osteoarthritis, breast, lung, pancreatic, and colorectal cancers, melanoma and thryroid neoplasm development work. I have not delved into the Q’s or K’s to unearth details, can anyone leave a comment about specifics on these programs at Pfizer?
Particulars on the deal are not plentiful but it appears to be a multi-year collaboration where validated candidate biomarkers will lead to joint commercial opportunities for potential companion diagnostics. So at some point in the future expect to hear about one or more predicative biomarkers in the clinic. Source MDx shall receive 1) an equity investment 2) a technology licensing fee and 3) R&D funding over the term of the agreement. Source MDx shall retain certain commercial rights to diagnostic biomarkers discovered through the agreement and, co-commercialization of any companion diagnostics that are developed as part of the collaboration is likely.
***Update*** Looks like GlobeImmune is in the lead to win CLSDF-Reader's Company of the Year award. Be sure to cast your vote at http://CLSDF.com. Voting ends 31 January!
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Saturday, January 05, 2008
Pharmion & Celgene: Figuring Out the Close
The $2.9B acquisition of Pharmion (NASDAQ: PHRM) by Celgene (NASDAQ: CELG) took another step towards closing the deal as the obligatory waiting period as required by the FTC and the Antitrust Improvements Act of 1976 expired, perhaps now clearing the way for smooth sailing to inking the deal in under 120 days. This is good. What remains to be determined is the stock exchange ratio. Previously I believe I mentioned that when Celgene’s stock price got whacked, falling from over $70 per share to $50 per share, essentially as a result of Millennium Pharmaceuticals (NASDAQ: MLMN) rival multiple myeloma drug Velcade® to Revlimid® reported it quadrupled remission rates, that this plunge could ultimately negatively affect the terms of the acquisition. Well I believe that observation was incorrect…
Essentially the ‘merger agreement’ will payout $25 in cash and shares of Celgene common based upon an exchange ratio that will fall in a range from a low of 0.66 shares to a high of 0.84 shares. How will they derive this ratio? Simple…If the volume weighted average price per share of Celgene common stock for the 15 consecutive trading days ending on (and including) the third trading day immediately prior to the closing date of the merger (the "VWAP Closing Price") is between $56.15 and $72.93, then the exchange ratio will be equal to $47.00 divided by the VWAP Closing Price. If the VWAP Closing Price is less than $56.15, Pharmion stockholders will receive 0.8370 Celgene shares for each share of Pharmion common stock, and if the VWAP Closing Price is greater than $72.93, Pharmion stockholders will receive 0.6445. Got it?
< $56.15 – 0.84 shrs + $25.00
= $60.00 – 0.78 shrs + $25.00
> $72.93 – 0.66 shrs + $25.00
***Don’t forget to leave a comment before next Friday to become entered in the CLSDF t-shit giveaway***
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Sunday, November 18, 2007
Celgene Snaps Up Pharmion: $2.9B
OK…it was just a few weeks ago when I highlighted Celgene’s (NASDAQ: CELG) concentrated activity in Colorado bio, take a look (here). The Colorado bioscape has proved to be an incredibly active market for big pharma in the last year, accounting for nearly a whopping $7 billion in transactions! Just to quickly review these deals included:
- Merck (NYSE: MRK) and Sirna, approximately $1.1B
- Endo (NASDQ: ENDP) and RxKintix, approximately $120MM
- Gilead (NASDAQ: GILD) and Myogen, approximately $2.5B
The acquisition is an impressive multiple, paying over 10X Pharmion’s last 12months revenue of $256MM. Such a multiple however, is not that surprising considering Pharmion has cash flow, an impressive four commercialized products, and a rich developmental pipeline, combine this with pharma’s need to enhance pipelines and the deal is easily comprehended.
Congratulations to President and CEO Pat Mahaffy and the rest of the talented team at Pharmion. They have done something uniquely special and rare, from business model design, execution and through exit. Our community looks forward to what the bio-entrepreneurs have planned next and invite them to take a look at the exciting activity transpiring at Fitzsimons BioBusiness Partners.
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Thursday, September 27, 2007
Celgene Makes Ya Go Hmmm…
Just what I think to be an interesting observation…that is how deep New Jersey-based Celgene (NASDAQ: CELG) has penetrated into the Colorado bio-scape. The connection appears to have initiated back in 2001 on a licensing deal with Pharmion (NASDAQ: PHRM) for Thalomid® (BTW…take a listen to Pharmion’s UBS Global Life Sciences Conference presentation from today here). Celgene then most recently struck an alliance deal with Array Biopharma (NASDAQ: ARRY) and yesterday confirmed participation in GlobeImmune’s Series C financing. More big pharma recognizing the value being created here in Colorado!
Monday, September 24, 2007
Array and Celgene Form Strong Alliance!
Array BioPharma, Inc. (NASDAQ: ARRY) and Celgene Corp. (NASDAQ: CELG) announced a worldwide strategic collaboration focused on the discovery, development and commercialization of novel therapeutics in cancer and inflammation. Celgene will make an upfront payment of $40MM to Array, in return Array will grant Celgene an option to select drugs developed under the collaboration that are directed to two of four mutually selected discovery targets. Array will be responsible for all discovery and clinical development through Phase I or Phase IIa. Celgene will then have the option to select drugs resulting from up to two of these four therapeutic programs and will receive exclusive worldwide rights to those drugs, except for Array's limited co-promotional rights in the U.S. Array is also entitled to receive, for each drug, potential milestone and royalty payments of as much as $300MM if certain commercial milestones are reached.
A great deal with a great partner. For those who pay attention to Mad Money Kramer is particularly bullish on the pair.
