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Merck & Co. to buy Antelliq for €2.1B; US FDA rolls back generic labeling plan

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Merck & Co. to buy Antelliq for €2.1B; US FDA rolls back generic labeling plan

Top news

* Merck & Co. Inc. agreed to buy privately held Antelliq Group from funds advised by BC Partners for about 2.1 billion in cash to boost its animal health business. The Kenilworth, N.J.-based drugmaker will also assume 1.15 billion worth of debt held by Antelliq, a maker of devices and technology used to track and monitor animals.

* The U.S. Food and Drug Administration withdrew a proposal that would have allowed generic drug companies to independently revise their product labeling with new safety updates before regulators reviewed or approved such changes, as brand-name manufacturers can already do.

* The European Medicines Agency said its budget for 2019 will be reduced by 1.4% to about €333 million due to Brexit related uncertainty. The agency added that its temporary Amsterdam office will be fully operational Jan. 1, 2019, paving the way for the regulator's final move in March.

On the policy front

* Officials from The U.S. National Institutes of Health issued a warning about foreign researchers failing to disclose conflicts of interest and making inappropriate use of American intellectual property in their home countries, especially China.

The country's premier health research agency also asked its affiliated institutes to re-evaluate projects using private funding for potential conflicts of interests that could compromise the integrity of the studies, The New York Times reported.

* Four U.S. senators from the Democratic Party introduced a bill that would allow the government to block unjustified hikes in drug prices, Reuters reported.

* The U.S. drug-pricing watchdog Institute for Clinical and Economic Review will publish a report analyzing the cost of Sarepta Therapeutics Inc.'s Duchenne muscular dystrophy drug Exondys 51 and its upcoming follow-up golodirsen.

M&A and capital markets

* Astellas Pharma Inc. exercised its option to buy Potenza Therapeutics Inc. for $164.6 million up front under a collaboration deal between the companies. Astellas and privately held Potenza entered a deal in 2015 to develop immuno-oncology therapies — drugs which modify the immune system to fight cancer — including an exclusive option for the Japanese drugmaker to acquire the Cambridge, Mass.-based company.

* Australian Pharmaceutical Industries Ltd. reconfirmed its nonbinding offer to acquire Sigma Healthcare Ltd. at 68.6 Australian cents per share. Rowville, Australia-based Sigma Healthcare is focused on wholesale and distribution of pharmaceutical products.

* Henry Schein Inc.'s board authorized the repurchase of up to $400 million of common shares. The New York-based healthcare distributor said the buyback represents about 3% of about 153 million outstanding shares as of Dec. 12.

* AMAG Pharmaceuticals Inc. will acquire Perosphere Pharmaceuticals, a private biotechnology company, for an up-front payment of $50 million. Waltham, Mass.-based AMAG Pharma will acquire global rights to ciraparantag, Perosphere's antidote for certain anti-blood-clotting drugs, which was granted a fast-track review designation by the U.S. Food and Drug Administration in April 2015 and is protected under a patent through 2034.

Drug and product pipeline

* Clovis Oncology Inc.'s Rubraca for ovarian cancer was among the drugs the European Medicines Agency's Committee for Medicinal Products for Human Use, or CHMP, recommended for approval in December.

* The U.S. FDA granted fast-track designation to Eli Lilly and Co. and Incyte Corp.'s Olumiant for treating lupus. Olumiant, or baricitinib, is being evaluated by Eli Lilly in late-stage studies to treat systemic lupus erythematosus, or lupus, a chronic autoimmune disease that causes inflammation in connective tissues such as cartilage and the lining of blood vessels.

Operational activity

* Guardant Health Inc. partnered with AstraZeneca PLC to develop a diagnostic test to go along with the Cambridge, U.K.-based company's non-small cell lung cancer drug Tagrisso. The blood test, called a companion diagnostic because it corresponds to a specific treatment, is based on Guardant's platform Guardant360, and helps identify non-small cell lung cancer, or NSCLC, patients who might respond well to Tagrisso.

* San Diego-based MabVax Therapeutics Holdings Inc. said it is exploring a sale of its clinical and preclinical assets. The assets hold "substantial value" but "the cost of execution for continuing development in the near term exceeds our current financial resources," said David Hansen, MabVax president and CEO.

* The U.S. Patent and Trademark Appeal Board ruled in favor of Mylan NV in a patent dispute brought by Sanofi over the vial form of the long-acting insulin Lantus. Paris-based Sanofi, which sells Lantus in vials and as a disposable injection pen, charged that Mylan was in violation of the patents for the insulin when the Canonsburg, Pa.-based company filed a new drug application for a generic version.

* Aspen Pharmacare Holdings Ltd. and Mylan entered a deal to distribute certain prescription and over-the-counter products in Australia and New Zealand. The agreement was struck between Canonsburg, Pa.-based Mylan, Aspen unit Aspen Global Inc. and the South African company's Australian subsidiaries, Aspen said in a filing. The deal also includes an option by generics-maker Mylan to buy the portfolio of products for about A$188 million.

* Vectura Group PLC said a U.K. court voted in favor of GlaxoSmithKline PLC in a dispute over an agreement between the two companies. The litigation pertains to certain additional patents under an August 2010 patent license and option agreement with GlaxoSmithKline.

* Seattle-based CTI BioPharma Corp. will begin a restructuring plan that includes a workforce reduction of 50% across the total number of the company's employees. The employee reductions will lead to cost savings of an estimated $20 million over three years.

* Applied Genetic Technologies Corp. and Biogen Inc. terminated a collaboration to develop gene-based therapies for inherited eye disorders following the failure of an early-stage study. As a result, Applied Genetics will regain the full rights to the programs included in the July 2015 partnership which covers the development and commercialization of the company's portfolio of drug candidates intended to treat orphan diseases of the retina, including X-linked retinoschisis, X-linked retinitis pigmentosa and three other discovery programs

* AstraZeneca appointed Tony Mok to serve as a nonexecutive director and a member of its science committee, effective Jan. 1, 2019. Mok is chairman of the Department of Clinical Oncology at the Chinese University of Hong Kong. He is also a nonexecutive director at Hutchison China MediTech Ltd. and a co-founder and the chairman of Sanomics Ltd.

Other features

* With higher development costs and rising pressure on drug pricing, the world's biggest drugmakers are shutting down programs not expected to get approval or yield enough sales, Bloomberg News reported.

* As financial crises hit, Venezuela fails to provide antiretroviral drugs for treating HIV, and patients are turning to leaves from a tree, called guasimo, without any proof of benefit, Reuters reported.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng decreased 1.62% to 26,094.79, while the Nikkei 225 was down 2.02% to 21,374.83.

In Europe as of midday, the FTSE 100 fell 0.80% to 6,822.14, and the Euronext 100 was down 0.97% to 941.36.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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