Global Insight Perspective | |
Significance | Germany's second-largest pharma company, Boehringer Ingelheim, is to acquire U.S. biotech Actimis Pharmaceuticals for up to US$515 million. |
Implications | Boehringer is interested in Actimis's preclinical respiratory compound AP768, and the final price of the staggered takeover will be dependent in part on its success. The acquisition marks Boehringer's first foray into the biotech sector and confirms its intention to develop follow-on products to its blockbuster COPD treatment Spiriva. |
Outlook | The acquisition will see Boehringer investing considerably in consolidation and R&D for several years before any new drugs can be considered ready for marketing. However, the takeover is the starting point of a long-term strategy for Boehringer to diversify its growth options through developing a stable of biotech drugs. |
Private German drug company Boehringer Ingelheim is expected to confirm its acquisition of U.S. biotech Actimis Pharmaceuticals later today, following reports in the German press that a takeover worth up to US$515 million was in the works. The Financial Times Deutschland says that the takeover would be an incremental affair, rather than a one-off purchase, and is linked to the clinical progress of one of Actimis's early-stage drug development programmes. Based in San Diego, California, Actimis Pharmaceuticals is a spin-off company of Boehringer's compatriot Bayer HealthCare; its R&D programme incorporates elements once belonging to Bayer's respiratory-disease therapeutic pipeline.
The compound of greatest interest to Boehringer Ingelheim is reported to be AP768, currently at the preclinical stage of development in one of Actimis's two main respiratory-disease research areas: asthma or chronic obstructive pulmonary disease (COPD). The development of any preclinical compound is fraught with risks, and there remains a high probability that AP768 might not make it through to Phase III clinical trials. However, it seems that Boehringer still intends to acquire the U.S. biotech, although the final takeover price will be partly dependent on the compound's progress and could potentially end up being lower than US$515 million.
Boehringer's portfolio of marketed products is topped by COPD treatment Spiriva (tiotropium bromide), which achieved blockbuster sales of 1.8 billion euro (US$2.8 billion) in 2007 and accounted for 20.7% of the group's total prescription-drug turnover. The company is fiercely protective of the privacy of its R&D pipeline, but Spiriva is known to be involved in several late-stage comparative trials, including two which compare it with rival drug Advair/Seretide (salmeterol), produced by U.K. pharma giant GlaxoSmithKline (GSK).
Outlook and Implications
Despite strong double-digit sales growth, Spiriva is under increasing pressure from Advair/Seretide following clinical trials that revealed the GSK drug offered COPD patients an improved quality of life and a lower risk of dying compared to the Boehringer treatment (see United Kingdom: 28 December 2007: GSK's Advair Shows Survival Benefits over Spiriva for COPD Patients). With U.S. data exclusivity also set to expire in January 2009, Boehringer needs to find new drugs to help cover any potential slowdown in sales of its main drug. The acquisition of Actimis confirms Boehringer's ongoing commitment to R&D within the respiratory-disease area, but also signals a major departure for the German firm in that it is turning to the biotech sector for the first time as a potential source of new, innovative drugs. This puts Boehringer Ingelheim in the same situation as a raft of traditional Big Pharma companies that have recently acquired biotechs, including GSK (see United Kingdom: 23 April 2008: GSK to Pay US$720 mil. for Cellular Metabolism Specialist Sirtris), Daiichi Sankyo (see Japan: 21 May 2008: Daiichi-Sankyo Snaps Up German Biotech U3 Pharma), Pfizer (see United States: 21 February 2008: Pfizer Seeks to Acquire Encysive Pharmaceuticals), and Merck KGaA, which in 2006 forged the biggest biotech takeover of them all (see Germany: 21 September 2006: Second Time Lucky? Expansion at Last as Merck KGaA Snaps Up Serono for US$13.3 bil.).
Spiriva is not the only drug with potential to cause heavy losses at Boehringer Ingelheim. As reported earlier this year, arthritis drug Mobic (meloxicam) continues to bleed sales following its patent expiry, and benign prostatic hyperplasia treatment Flomax (tamsulosin) is also set to lose patent exclusivity in the United States next year. The acquisition of Actimis will not be a quick-fix solution; indeed, Boehringer will need to invest considerably in consolidation and R&D for several years before any new drugs can be considered ready for marketing applications. However, the takeover can be seen the starting point of a long-term strategy that will see Boehringer diversify its growth options through the development of a stable of biotech compounds.