12:00 AM
 | 
Jan 12, 2009
 |  BioCentury  |  Finance

Ebb & Flow

As one of the few remaining independent vaccine businesses, Crucell (Euronext:CRXL; NASDAQ:CRXL) has been touted as a potential acquisition candidate. Late last Wednesday, the Dutch vaccines company essentially flagged up to the marketplace that it is willing to be taken out when it revealed that Wyeth (NYSE:WYE) had started preliminary "friendly discussions" that could lead to a takeover.

The news prompted an immediate gain of $4.43 (28%) to $20.50 on NASDAQ on Wednesday. On Thursday, Crucell advanced €4.92 (42%) to €16.50. Crucell closed the week up €5.635 (49%) at €17.10, while its ADSs gained $7.39 to $23.29.

The company declined to say whether the announcement had prompted inquiries from other vaccine companies.

"As there had obviously been a leak, we were compelled by stock exchange rules to make the announcement, beyond that we cannot comment any further," spokeswoman Oya Yavuz told Ebb & Flow.

Yavuz also would not comment on the $1.35 billion price tag that has been widely reported, which would represent a 31% premium to the company's value prior to the announcement, but is lower than the 64% premium paid for Acambis last year by sanofi-aventis (Euronext:SAN; NYSE:SNY) (see BioCentury, July 28, 2008).

That Wyeth should emerge as the first potential suitor for Crucell is not entirely surprising. Last week, Wyeth Chairman, President and CEO Bernard Poussot told analysts the pharma had about $40 billion in cash and that it planned to use some of the money to make acquisitions to beef up its biologics activities.

Wyeth has previously licensed Crucell's PER.C6 cell line and AdVac recombinant adenoviral vector technology; last year, the companies partnered to develop an undisclosed vaccine.

Interestingly, Crucell was on the cusp of becoming a sustainable and independent vaccines business. The company moved into profitability during 3Q08, when it posted a net profit of €12.3 million on revenues of €82 million. Sales of the company's eight marketed pediatric, travel and flu vaccines were €65.6 million. The company had €103.9 million ($141.3 million) in cash at Sept. 30.

Crucell's biggest selling vaccine, Quinvaxem, is the subject of a number of significant contracts with supranational organizations such as UNICEF. Quinvaxem is a liquid five-in-one vaccine covering diphtheria, tetanus, pertusis, H. influenzae b and hepatitis B.

Wyeth is unlikely to be the only company interested in Crucell. The company has partnerships with other leading vaccines players, including the sanofi pasteur vaccines unit of sanofi-aventis for flu and rabies vaccines, and with Novartis (NYSE:NVS; SWX:NOVN) for Quinvaxem.

GlaxoSmithKline(LSE:GSK; NYSE:GSK), AstraZeneca (LSE:AZN; NYSE:AZN) and Merck(NYSE:MRK) all have R&D relationships with Crucell and are keen to build up their vaccines and/or biologics activities.

Crucell's technologies to manufacture vaccines, recombinant proteins and antibodies are being used by more than 60 companies. The best known of these is PER.C6.

Survival course

Management teams at cash-crunched companies are finding ways to extend their runways, even if only a few quarters at a time. Last week, Wilex (Xetra:WL6) and La Jolla (NASDAQ:LJPC) concluded deals that will probably ensure they have enough funds to see them through 2009 or more.

On Friday, cancer company Wilex picked up five preclinical cancer programs and €10 million ($13.9 million) from UCB (Euronext:UCB), which is concentrating its efforts on CNS and immunology. UCB is essentially paying for Wilex's experience to run preclinical through Phase II oncology trials and is hedging against runaway success by taking a stake in Wilex.

Consequently, the deal provides Wilex with a preclinical pipeline to go with its four clinical programs. Wilex's lead programs are Rencarex, a chimeric monoclonal antibody against carbonic anhydrase IX to treat renal cancer, and Redectane (CA9-SCAN) to diagnose clear cell renal cell carcinoma. Both are in Phase III testing.

Wilex also has Mesupron, a second-generation serine protease inhibitor targeting urokinase-type plasminogen activator, which is in Phase II to treat both breast cancer and pancreatic cancer.

UCB also has promised to provide the German biotech an additional €10 million in two equal tranches if development milestones are achieved over the next 12 months. While the...

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