April 6, 2017
By Mark Terry, BioSpace.com Breaking News Staff
There has been some speculation that The Medicines Company might be a juicy target for an acquisition this year. Some additions to the company’s board of directors have only increased the speculation.
One of the things that has everyone interested in The Medicines Company is a recent announcement with Alnylam Pharmaceuticals regarding positive final results from its Phase II clinical trial of inclisiran. The drug is a PCSK9 inhibitor to treat high cholesterol. In the trial, the drug showed significant and sustained reductions of LDL-C (cholesterol) and had few side effects.
The only other companies with PCSK9 inhibitors on the market are Amgen (AMGN) with Repatha, and Regeneron Pharmaceuticals and Sanofi ’s Praluent. The drugs are primarily for individuals with very high levels of cholesterol who do not respond to statins. They’re expensive. Repatha’s price tag is about $14,000 per year compared to a typical $60 per month for statins.
Praluent and Repatha have struggled to gain a foothold in the market, largely because of the price. The question is whether The Medicines Company’s drug is better than Repatha or Praluent. The answer is a strong maybe, but there’s a lot of work to be done to prove it.
The further argument is that The Medicines Company would set a far lower price than the other companies, which could lead to a blockbuster.
The company also has products on the market for cardiovascular, infectious disease and surgical care. It also has ABP-700 in development for anesthesia and Carbavance for bacterial infections.
So what’s going on with the board?
Per the Boston Business Journal, it’s related to the recent addition of Paris Panayiotopoulos to The Medicines Company board. Panayiotopoulos was formerly the chief executive officer of Ariad Pharmaceuticals , which was acquired by Takeda Pharmaceutical Company Limited in January. He joins Alex Denner, a former chairman of Ariad.
Denner, founder of investment firm Sarissa Capital, is known as an activist investor, and it was largely his activities that overturned the Ariad board and led to its sale to Takeda. And that wasn’t a one-shot—it’s a pattern, with a history of booting CEOs and forcing mergers in at least five biotech companies.
An unidentified life sciences investor told Don Seiffert, the managing editor of the Boston Business Journal, “Using a typical business development approach to valuing The Medicines Company as a ‘bolt-on acquisition’ you can easily reach a modeled value of between $85 and $115 per share.” That suggests a buyout price of about twice the size of its current market cap of $3.5 billion.
In the interest of having more than rumors, Seiffert contacted Panayiotopoulos directly and asked him. He wouldn’t comment on a possible sale of The Medicines Company, but he said, “I have been very fortunate over the years to lead organizations passionate about tackling the world’s leading causes of death. Most recently at Ariad, we created one of the world’s leading rare cancer companies. Heart disease remains the biggest killer of mankind and, with the investigational treatment incliseran, The Medicines Company could be one of the potential future leaders in this evolving field. Together with other promising pipeline products, this is a key reason for me joining the board.”
That’s not a denial, nor is it and admission. Mostly it’s advertisement for The Medicines Company. At this stage of the game, evidence that The Medicines Company is up for sale are circumstantial at best. Nonetheless, investors are paying attention.
The Medicines Company is currently trading for $50.32.
