Industry Watch: With M&A Marriage Easier Than Divorce—Abbott, Alere Headed at Last for the Altar
Abbott Laboratories and Alere have good reason to expect their long-planned merger to be completed by the third quarter as announced, following an agreement that revises key pieces of the deal.
The revised deal cuts the price Abbott will pay for the diagnostics developer from $5.8 billion to $5.3 billion—by lowering the per-share price of Alere stock from $56 to $51.
“We believe shareholders would have approved anything at $50+ so we expect majority shareholder approval will not be a problem,” Canaccord Genuity diagnostics analyst Mark Massaro said in a note to investors. “We are positive, relieved, and modestly surprised by the news.”
The settlement was less surprising, Reuters columnist Robert Cyran observed, given the difficulty of walking away from a mergers and acquisitions agreement based on a “material adverse change” (MAC) in circumstances since the deal was reached.
That difficulty, according to Cyran, stems from a 2001 court case in which the Delaware Court of Chancery defined a MAC as “unknown events that substantially threaten the overall earnings potential of the target in a durationally significant manner.”
Abbott contended late last year that a MAC had occurred which warranted ending the acquisition deal. Abbott sued Alere in December in Delaware Chancery Court, citing a “substantial” 42% loss in Alere’s value due to a series of developments since the companies announced their plans to merge on February 1, 2016. Among developments cited by Abbott were:
Multiple U.S. Justice Department subpoenas served on Alere
A Centers for Medicare & Medicaid Services decision to revoke the billing privileges of Alere’s Arriva Medical division
The permanent removal from the market of Alere’s INRatio® and INRatio2® PT/INR Monitoring System
Alere’s five-month delay in filing its 10K annual report, coupled with restatement of its 2013–2015 financials
Abbott’s lawsuit was just the latest in a legal back-and-forth between the companies. In August, Alere sued Abbott, seeking to force completion of the deal by pursuing clearance in accordance with federal antitrust law. In amending their acquisition agreement, Abbott and Alere agreed to dismiss the lawsuits each filed against the other.
Discovery & Development: DNA Tags Let Combinatorial Chemistry Mix It Up
Combinatorial chemistry is molecular pugilism, a sport that one follows in hopes of seeing lots of “hits.” All too often, however, the contenders (small drug-like molecules) fail to lay a glove on the champion (a hard-to-drug protein). In such cases, bouts remain hit-free and seem to last forever.
Fortunately, drug discovery bouts needn’t occur sequentially. Instead, they may take place simultaneously in tiny boxing rings known as a microwell. When many microwells are arrayed in high-throughput screens, they can give many, many contenders their shot at the title in a more reasonable amount of time.
Even so, hits have remained few and far between, lessening enthusiasm for combinatorial approaches. There is another combinatorial approach, however, that is generating excitement. It is less of a tournament and more of a free-for-all.
It is called DNA-encoded library (DEL) technology. It enables much larger contests—all at once and all at the same place. Think of it as a drug discovery Donneybrook. It is less chaotic than it sounds.
Each small molecule is attached to a DNA tag, a sort of barcode. The DNA tag not only uniquely identifies each contender, it facilitates the identification of low-profile performers. After these molecules are isolated, the DNA tag enables signal amplification via the polymerase chain reaction. Promising drug candidates, though rare, can be characterized by NGS.
Even better, libraries of tagged candidates can be kept together in mixtures, teeming multitudes of millions or billions, rather than in separate compartments that require robotic management.
DEL technology has started to catch on only recently, even though it was envisioned about 25 years ago, in a paper co-authored by Sydney Brenner and Richard Lerner, then at The Scripps Research Institute (TSRI). Curiously, in the ongoing flurry of partnership activity centered around DEL technology companies—which include Ensemble Therapeutics, HitGen, Nuevolution, Philochem, Vipergen, and X-Chem—one collaboration emphasizes how development in this space has come full circle.
HitGen recently partnered with TSRI and its affiliate, the California Institute for Biomedical Research (Calibr), to identify new drug candidates. “We are excited to collaborate with TSRI-Calibr for these discovery efforts,” said Jin Li, Ph.D., HitGen’s chairman and CEO. “And we acknowledge the fundamental contributions of Brenner and Lerner in initiating DNA-encoded chemistry technology.”
Genomics & Proteomics: Partnership Looks to Improve Genetic Disease Diagnostics
Inherited diseases represent some of the more difficult disorders to diagnose as well as treat. Now, researchers may be getting the much-needed advances in inherited disease diagnostics.
Congenica and Edico Genome recently announced a partnership to offer their complementary platform technologies as an all-in-one, genome data-analysis solution. This new endeavor is set to accelerate clinical labs’ and hospitals’ progression from DNA sequencing to diagnosis for inherited diseases, which currently can take months or years.
The new offering combines Congenica’s SapientiaTM software platform, which allows hospitals and labs to analyze and interpret the genome while creating comprehensive diagnostic reports to support clinical decision making, with Edico Genome’s DRAGENTM, a field-programmable gate array (FPGA)-centric platform that implements genome pipeline algorithms to analyze a whole genome in only 20 minutes on-site or under 10 minutes in a single cloud instance.
“Sapientia is already used extensively throughout the NHS in the U.K., as well as by clinical scientists providing reports for the 100,000 Genomes Project,” explained Thomas Weaver, Ph.D., CEO of Congenica. “Without a diagnosis, it is difficult to select the most appropriate treatment plan for a patient or make a prognosis of what the likely outcomes may be.”
Edico’s DRAGEN Bio-IT processor has been assessed as part of University College London’s (UCL) Rapid Pediatric Sequencing Project (RaPs), a pilot aimed at evaluating the use of rapid whole-genome sequencing (WGS) for rare diseases in an intensive care clinical setting.
“Edico shares our vision of transforming healthcare by developing easy-to-use, highly automated genomics analysis solutions. And by combining our complementary technologies, we aim to accelerate the clinician’s ability to use genomics to diagnose a patients’ disease and make this available on a global basis,” Dr. Weaver stated.
Pieter van Rooyen, Ph.D., CEO of Edico Genome, added that “as genomics marches towards the clinic, we recognize clinicians and researchers need easy to use, all-in-one solutions that enable genomic data to be analyzed and shared quickly, easily, accurately and cost effectively. Congenica has firsthand perspective of the needs of the clinical genomics community.”
Bioprocessing: Fujifilm Boosts Production Capacity and Sets Up New Process Development Facilities
Fujifilm said it will increase production capacity by investing about $130 million in the U.S. and U.K. in order to expand the business of its BioCDMO Division.
At Fujifilm Diosynth Biotechnologies Texas (FDBT), a $93 million cGMP production facility has been completed. It was built in part with funding from BARDA (Biomedical Advanced Research and Development Authority), an office of the U.S. Department of Health and Human Services. Fujifilm plans to invest an additional $28 million to outfit the facility with mammalian cell culture bioreactors. This facility will start operation at the beginning of 2018.
In addition, a $9 million investment will be made to expand the process development capabilities at Fujifilm Diosynth Biotechnologies U.K., near to its Billingham, U.K. site. This facility is scheduled to be operational in summer of 2017.
The FDBT facility will be the manufacturing center of excellence for the company’s Saturn monoclonal antibody platform, with an initial cell-culture capacity of 6,000 L (3 x 2,000-L bioreactors). The design of the facility allows for future expansion that can accommodate up to 24,000 L of upstream capacity to meet much needed customers’ clinical and commercial demands.
In the U.K., the investments include the establishment of a dedicated Mammalian Cell Culture Center of Excellence. These laboratories span over 10,000 sq. ft. and are designed to incorporate high-throughput technologies, including fully automated bioreactors and chromatography systems, to enable rapid and efficient monoclonal antibody manufacturing process readiness, said Steve Bradshaw, CEO of Fujifilm Diosynth Biotechnologies, adding that these assets will enable Fujifilm to provide “best in class” facilities, technology, and operational know-how to the industry.
“They are also a key in our continuing commitment to develop future medical countermeasures and pandemic flu response candidates for our long-term partners the CIADM (Center for Innovation in Advanced Development and Manufacturing), BARDA, and other third-party customers,” he pointed out.
Molecular Diagnostics: Thermo Fisher Partners with SpeeDx on FDA Clearance for ‘Superbug’ Diagnostic
Thermo Fisher Scientific will partner with SpeeDx to gain FDA clearance of the Australian developer’s ResistancePlus™ MG molecular diagnostic for Mycoplasma genitalium, that is evolving into an antibiotic-resistant “superbug.” The value of the partnership was not disclosed.
Upon successful validation, SpeeDx will submit ResistancePlus MG to the FDA for use with the Applied Biosystems 7500 Fast Dx Real-Time PCR System, which offers 96-well, 5-color real-time PCR for in vitro diagnostic use.
ResistancePlus MG is a multiplex qPCR test for detection of M. genitalium and five macrolide resistance markers from male and female urine and swab specimens. The test is designed to identify both M. genitalium and mutations in the 23S rRNA gene of the bacteria that have been shown to confer resistance to the antibiotic azithromycin.
ResistancePlus MG is now marketed across Europe, Australia, and New Zealand, having received a CE mark and accreditation by the Australian Therapeutic Goods Administration.
“With their reputation for scientific excellence, we are very pleased to partner with Thermo Fisher to bring this test to the U.S. market,” SpeeDx CEO Colin Denver said in a statement. “Applied Biosystems qPCR instrumentation has a long-standing reputation for quality and a wide install base across the region.”
Recent studies have shown a higher prevalence than gonorrhea for M. genitalium, which can cause symptoms such as urethritis, cervicitis, endometritis, and pelvic inflammatory disease.
SpeeDx also cited studies showing resistance has increased up to 40% in several countries to the macrolide antibiotics, specifically azithromycin, that are the first-line treatment for M. genitalium sexually transmitted infections.
Last year, the European Guideline on M. genitalium infections recommended complementing the molecular detection of M. genitalium with an assay capable of detecting macrolide resistance-associated mutations. However, in the U.S., no FDA-cleared molecular diagnostic test exists for the detection of M. genitalium.