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.
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Friday, February 15, 2008
Pharmion: Market Exclusisivity
News continues to pour out of Pharmion (NASDAQ: PHRM) of late and believe it or not today’s tidbit is not related to the Celgene (NASDAQ: CELG) acquisition, rather it is focused on the MGCD0103 product for the treatment of acute Myelogenous Leukemia with development and commercialization partner MethylGene (TSX: MYG). This week proved very encouraging for MGCD01013 as Orphan Drug Designation was granted by both the FDA and their EU counterpart, the European Medicines Agency (EMEA).
In order to qualify for orphan status in the EU the therapeutic must treat life-threatening or serious conditions that are rare and affect no more than 5 in 10,000 people, to qualify in the US the product should treat conditions affecting fewer than 200,000 people. When a product qualifies for orphan status the designation provides for a host of development incentives yet perhaps most important of all, due to the economics of development, is the granting of up to a 10 year marketing exclusivity right in the EU and up to 7 years of exclusivity in the US.
MGCD0103 is a histone deacetylase inhibitor (HDAC inhibitor) The compound is currently in one Phase I trial with Taxotere® for solid tumors, two Phase I/II trials with Vidaza® for hematological malignancies and with Gemzar® for pancreatic cancer, and five Phase II clinical trials in hematological malignancies.
HDAC inhibitors are a class of drugs that interfere with the function of histone deacetylase. HDAC inhibitors are being studied as a treatment for cancer and neurodegenerative diseases. Regulation of gene expression is mediated by several mechanisms such as DNA methylation, ATP-dependent chromatin remodeling, and post-translational modifications of histones, which include the dynamic acetylation and deacetylation of epsilon-amino groups of lysine residues present in the tail of core histones. The enzymes responsible for reversible acetylation/-deacetylation processes are histone acetyltransferases and histone deacetylases. HDACs are part of transcriptional corepressor complexes. Mammalian HDACs can be divided into three classes according to sequence homology. Class I consists of the yeast Rpd3-like proteins, Class II consists of the yeast Hda1-like proteins, Class III comprises the yeast Sir2-like proteins. Inhibitors of histone deacetylase inhibitors induce hyperacetylation of histones that modulate chromatin structure and gene expression. These inhibitors also induce growth arrest, cell differentiation, and apoptosis of tumor cells.
Acute myeloid leukemia (AML), also known as acute myelogenous leukemia, is a cancer of the myeloid line of white blood cells, characterized by the rapid proliferation of abnormal cells which accumulate in the bone marrow and interfere with the production of normal blood cells. AML is the most common acute leukemia affecting adults, and its incidence increases with age. Although AML is a relatively rare disease, accounting for approximately 1.2% of cancer deaths in the US its incidence is expected to increase as the population ages.
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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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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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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
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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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Tuesday, October 16, 2007
Pharmion: Phase I Trial for MGCD0103
Pharmion (Nasdaq: PHRM) and MethylGene (TSX: MYG) announced initiation of a Phase I trial for MGCD0103, a isotype-selective histone deacetylase inhibitor in combination with Taxotere from Sanofi Aventis (NYSE: SNY) in patients with solid tumors. Taxotere is an approved chemotherapy agent marketed for use in breast, lung, prostate, gastric and head and neck cancer. Key objectives for this trial include evaluate the safety of administering these two agents together; determine the maximum tolerated dose of MGCD0103 when combined with the two fixed doses of Taxotere; define optimal doing; assess safety of the combination: quantify tumor responses and measure pharmacodynamic and pharmacokinetic characteristics. The trial may enroll up to 50 patients at cancer centers in North America and take 12 to 18 months to complete.
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!
Thursday, November 16, 2006
Pharmion: Bucks the Trend
After a fury of CO life science companies that have recently been acquired (e.g. Myogen/Gilead, RxKinetix/Endo and Sirna/Merck), Pharmion, Inc. (NASDAQ: PHRM) has reversed this local trend and gone out and purchased Cabrellis (privately held, San Diego, CA) for $55M with an additional $45M pending. Two additional payments of $12.5M are expected upon approval of amrubicin. Upon amrubicin's approval for a second indication in the US or EU an additional payment of $10 million will be made for each additional market.
Amrubicin (CALSED™) has been approved in Japan since 2002, for the treatment of SCLC and non-small cell lung cancer (NSCLC). Pharmion intends to initiate a Phase 3 registrational study in relapsed/refractory SCLC in the second half of 2007. Using data from these studies and supporting Japanese data, Pharmion expects to submit a NDA and a Marketing Authorization Application (MAA) in the EU for the treatment of relapsed/refractory SCLC during 2009.
The transaction adheres to the Pharmion model of late stage licensing and acquisitions; it may yield near term revenue (as early as 2010), complements the platform while expanding into solid tumor therapies and will also explore amrubicin in combination with their two epigenetic inhibitors.
