M&A fills patent holes, fuels geographic expansion

Three deals now in the works embody three very different trends. Yet another Japanese drugmaker is expanding westward by snapping up a smaller pharma company. A U.S. company is buying a drug-development firm for access to a potential new med. And a potential sale in the Middle East has fallen into limbo as unrest there pushes investors to the sidelines, stalling M&A.

First, there's Kyowa Hakko Kirin, which has agreed to buy Scottish drugmaker ProStrakan for £292 million, or $474.6 million. The deal gives Kyowa Hakko a springboard into Europe and the U.S., and a portfolio of specialty meds, Reuters reports. It follows Takeda Pharmaceuticals' $8.8 billion buyout of oncology drug specialist and Velcade maker Millennium Pharma, as well as Dainippon Sumitomo's purchase of U.S.-based Sepracor (now Sunovion), best known for its Lunesta sleeping pill.

Then there's Forest Pharmaceuticals, which is snapping up Clinical Data, a biotech company developing a new antidepressant for $1.2 billion. In a situation familiar to every Big Pharma company, Forest's blockbuster antidepressant Lexapro, far and away its biggest-selling product, goes off patent next year, and it needs new products to help replace that revenue. The Clinical Data deal includes a contingency payment of $6 per share if the proposed drug, Viibryd, meets sales goals.

Meanwhile, the proposed selloff of Egyptian drugmaker Amoun is now on hold. A U.S. investor group had been shopping the company for around $1 billion, the New York Times reports, and at the time, Amoun seemed a prime prospect for drugmakers eager to expand in emerging markets. But now that Egypt has been overtaken by political unrest, M&A there has ground to a halt.

Still, there's hope for Amoun's sellers--and potential buyers. "Deals are being put on hold, but not necessarily abandoned," Sarah Alexander, CEO of the Emerging Markets Private Equity Association, told the NYT. "There is a wait-and-see attitude, as even pricing is difficult to judge at the moment."

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