Thanks Little T, regarding M&A interest in Neuren / a melbourne cup field of big pharma companies swooping in, Moody's and the Wall Street Journal agree with you:
Here’s Why Orphan Drugs Will Remain Attractive M&A Targets: 2015
Amid the mergers-and-acquisitions boom in the pharmaceutical industry,
one trend is increasingly discernable – orphan drugs are a desirable target. In fact,
half of the recent acquisitions among drug makers and biotechs involved an orphan drug, according to Moody’s Investor Service. Of 18 deals announced since August, nine involved an orphan drug, which is used to treat a rare disease.
Why? Drug makers can charge high prices without much push back from payers;
patients often require life-time treatment, which means ongoing sales; there are relatively
high hurdles for creating competitive medicines, and regulators give drug makers
extra time to exclusively market these medicines as a
reward for serving what are often unmet medical needs.
Not surprisingly, these medications are
expected to continue to remain as takeover bait. “It’s definitely picked up this year,” says Michael Levesque, a Moody’s senior vice president who tracks the pharmaceutical industry. Orphan drugs are “ideal products, from a credit standpoint. And while they’re not necessarily the biggest driver [in some deals], I think they’ll still be a really big portion.”
As The Wall Street Journal recently
noted,
global sales of orphan drugs are expected to rise 10.5% annually to about $176 billion in 2020, according to EvaluatePharma, a market research firm. And as Levesque adds, the overall level of
M&A activity in the pharmaceutical industry has been accelerating with no sign of a slowdown.
So far this year, there have been
260 pharmaceutical deals valued at $185.1 billion globally, compared with 622 deals valued at $245.4 billion for all of 2014, according to Dealogic, which tracks M&A activity. Among drug makers and biotechs in the U.S., there have been 94 deals valued at $161.3 billion, so far this year, compared with 194 deals valued at $183.2 billion for all of 2014.
Among those in which orphan drugs were notable: Horizon Pharma bought Hyperion Therapeutics for $1.1 billion and gained a product to treat urea disorder, an inherited ailment that can cause a build-up of ammonia in the body. And Alexion Pharmaceuticals agreed to
pay $8.4 billion to buy
Synageva BioPharma ,
which is developing a drug to treat a rare metabolic disorder.
And Levesque points out there are, potentially, other companies to choose from. Based on FDA data, he counts 403 drugs on the market with orphan status, and some have indications for
more than one ailment, which makes them still more attractive as a takeover target. And he also tallies more than 1,000 treatments being developed that have been granted orphan drug status.
One point worth noting: price increases for orphan drugs are more modest than for many other medications. While drug makers may have the leverage to boost prices significantly, Levesque says companies are more sensitive to the negative publicity that a double-digit price hike can engender. That said, he also believes high prices right out of the gate remain sustainable.
Source:
http://blogs.wsj.com/pharmalot/2015/05/29/heres-why-orphan-drugs-will-remain-attractive-ma-targets/
(20min delay)