| Spinoff: PPDI announced in October 2009 its plans to spin off its compound partnering business from its core contract research organization (CRO), business. The spinoff will result in two well capitalized, highly focused, independent public companies. The CRO business will continue to operate under the PPDI name and will be focused solely on its drug discovery and development service businesses and will no longer be coupled with the earnings dilution from the company’s compound partnering business. The compound partnering business will have the opportunity to focus on developing and commercializing its drug candidates and to access external capital, if needed, without any constraints associated with operating in combination with the CRO business. As a result of these substantial corporate-level benefits, both businesses will be better positioned to create long-term shareholder value.
The compound partnering entity is expected to have six key assets including: (1) rights to royalties and milestones from the collaboration with Alza Corp. on Priligy (first and only approved treatment for premature ejaculation), (2) potential future milestones and royalties associated with sales of Takeda's DPP4 inhibitor Alogliptin and related combination products, (3) the dermatology program acquired through the acquisition of Magen Bioscience in April 2009, (4) statin compound RBx-10558 licensed from Ranbaxy for the treatment of dyslipidemia, and (5) two new compounds expected from a deal currently in late-stage negotiations. PPDI will initially capitalize the compound partnering company with $100 million. This spinoff is expected to be complete by mid 2010.
Acquisition: PPDI completed the acquisition of Excel PharmaStudies in November 2009. Excel is one of the largest CROs in China with more than 300 employees at the time of the acquisition. This acquisition provides PPDI additional capacity and expertise in this rapidly growing market. It also significantly increases its client base in Asia Pacific. The acquisition strengthens PPDI’s ability to offer Phase II–IV clinical, data management, biostatistics, regulatory and quality assurance services under a variety of operating models, ranging from functional to full service. Combining its drug development expertise with its global central laboratory operations in Beijing and Singapore uniquely positions PPDI to deliver a broad set of services to biopharmaceutical companies in China, Japan and throughout the region. Excel will operate as a wholly-owned subsidiary of PPDI.
PPDI signed an agreement in October 2009, to invest $100 million in Celtic Therapeutics Holdings L.P., an investment partnership organized for the purpose of identifying, acquiring and investing in a diversified portfolio of 10 to 15 novel therapeutic product candidates. Celtic will focus on mid-stage drug development candidates that have progressed through human proof-of-concept studies and are targeted to address unmet medical needs, seeking to advance development of these candidates to the next key product milestone, usually the beginning or end of Phase III. The goal of the alliance is to bring the best products to market more quickly to meet the unmet needs of patients. PPDI believes it will benefit Celtic mid to late-stage pipeline across the board.
Agreement: PPDI entered into an agreement with Janssen Pharmaceutica N.V. (a subsidiary of Johnson & Johnson) in November 2009, to develop and commercialize two Phase II-ready therapeutic compounds, one to treat diarrhea-predominant irritable bowel syndrome (IBS-d) and the other to treat complicated skin and skin structure and respiratory infections. PPDI inlicensed the two assets and will advance the compounds through Phase II development. At the completion of Phase II, Janssen will have the option to resume development and commercialization of each compound. In exchange, PPDI will receive up to $330 million in clinical and sales milestones and royalties on sales if the compounds are approved for marketing. If Janssen does not buy back a program, PPDI will have the option to continue developing and commercializing the compound for that program, and Janssen will receive up to $250 million in clinical and sales milestones and royalties on sales if the compounds are approved for marketing.
|
