Sandoz completes acquisition of Fougera Pharmaceuticals, positioning Sandoz as #1 in generic dermatology globally

USD 1.525 bn acquisition positions Sandoz as US and global #1 in generic dermatology, strengthening global leadership in differentiated generics, -- US dermatology generics is an attractive industry segment, with 2011 sales of USD 2.1 billion and stro

Sandoz has completed its USD 1.525 billion acquisition of specialty US dermatology company Fougera Pharmaceuticals on a cash and debt free basis.

Fougera had net sales of USD 429 million in 2011 in the US alone and, combined with Sandoz's existing generic dermatology franchise, this positions Sandoz as the new #1 in generic dermatology medicines both globally and in the US. Fougera has strong dermatology development and manufacturing expertise, particularly in the area of semi-solid forms such as creams and ointments, as well as a well-known branded business, PharmaDerm.

"We are pleased to combine Fougera's strong portfolio and pipeline of dermatology medicines with Sandoz's existing global leadership positions in biosimilars and generic injectables, ophthalmics and antibiotics," said Sandoz's global head Jeff George. "This will significantly enhance the range of affordable, high-quality medicines that Sandoz can offer to patients and payors in the US and around the world." 

Dermatology generics is an important and rapidly-growing segment of the US market, which IMS estimated at USD 2.1 billion in 2011 sales and which had strong double digit annual growth between 2009 and 2011(1). Dermatology covers a range of often complex diseases from acne to psoriasis to fungal infections to skin cancer.

In addition to building on the two companies' overlapping customer base in the US, Sandoz will leverage both its leading position in the US generics sector and its presence in over 140 countries to expand Fougera's broad dermatology portfolio to new markets around the world.

"We welcome Fougera into Sandoz and Novartis and we look forward to working together to meet the needs of all our stakeholders," said Don DeGolyer, President of Sandoz US. "Sandoz and Fougera share a strong culture based on quality, excellence, and a determination to succeed in the interests of the patients we serve."

Fougera, whose history as a leader in US dermatology goes back more than 160 years to its founding in 1849, will be integrated into Sandoz's US business based in Princeton, New Jersey, but will continue to exist as a separate legal entity. Fougera, based in Melville, New York, will be home to a new center of excellence for generic dermatology development and manufacturing within the global Sandoz network.

Fougera Pharmaceuticals currently employs approximately 700 people across its US sites. It operates two main businesses: Fougera, a leading player in the US dermatology generics sector with 45 products and more than 200 SKUs, and PharmaDerm, a branded specialty pharma business with 17 brands and over 40 SKUs. 

The sellers comprise a consortium of private equity funds led by Nordic Capital Funds V and VI, including DLJ Merchant Banking Partners (a Credit Suisse affiliate) and Avista Capital Partners.

Sandoz completes acquisition of Fougera Pharmaceuticals, positioning Sandoz as #1 in generic dermatology globally

USD 1.525 bn acquisition positions Sandoz as US and global #1 in generic dermatology, strengthening global leadership in differentiated generics -- US dermatology generics is an attractive industry segment, with 2011 sales of USD 2.1 billion and strong double-digit growth in recent years -- Fougera's New York site will become Sandoz's new global dermatology center of excellence

Sandoz has completed its USD 1.525 billion acquisition of specialty US dermatology company Fougera Pharmaceuticals on a cash and debt free basis. 

Fougera had net sales of USD 429 million in 2011 in the US alone and, combined with Sandoz's existing generic dermatology franchise, this positions Sandoz as the new #1 in generic dermatology medicines both globally and in the US. Fougera has strong dermatology development and manufacturing expertise, particularly in the area of semi-solid forms such as creams and ointments, as well as a well-known branded business, PharmaDerm. 

"We are pleased to combine Fougera's strong portfolio and pipeline of dermatology medicines with Sandoz's existing global leadership positions in biosimilars and generic injectables, ophthalmics and antibiotics," said Sandoz's global head Jeff George. "This will significantly enhance the range of affordable, high-quality medicines that Sandoz can offer to patients and payors in the US and around the world." 

Dermatology generics is an important and rapidly-growing segment of the US market, which IMS estimated at USD 2.1 billion in 2011 sales and which had strong double digit annual growth between 2009 and 2011(1). Dermatology covers a range of often complex diseases from acne to psoriasis to fungal infections to skin cancer. 

In addition to building on the two companies' overlapping customer base in the US, Sandoz will leverage both its leading position in the US generics sector and its presence in over 140 countries to expand Fougera's broad dermatology portfolio to new markets around the world. 

"We welcome Fougera into Sandoz and Novartis and we look forward to working together to meet the needs of all our stakeholders," said Don DeGolyer, President of Sandoz US. "Sandoz and Fougera share a strong culture based on quality, excellence, and a determination to succeed in the interests of the patients we serve." 

Fougera, whose history as a leader in US dermatology goes back more than 160 years to its founding in 1849, will be integrated into Sandoz's US business based in Princeton, New Jersey, but will continue to exist as a separate legal entity. Fougera, based in Melville, New York, will be home to a new center of excellence for generic dermatology development and manufacturing within the global Sandoz network. 

Fougera Pharmaceuticals currently employs approximately 700 people across its US sites. It operates two main businesses: Fougera, a leading player in the US dermatology generics sector with 45 products and more than 200 SKUs, and PharmaDerm, a branded specialty pharma business with 17 brands and over 40 SKUs. 

The sellers comprise a consortium of private equity funds led by Nordic Capital Funds V and VI, including DLJ Merchant Banking Partners (a Credit Suisse affiliate) and Avista Capital Partners. 

Disclaimer These materials contain forward-looking statements that can be identified by terminology such as "create", "planned", "will enhance", "will leverage", or similar expressions, or by express or implied discussions regarding the potential impact of the acquisition of Fougera on Sandoz and Novartis; the potential future sales or earnings of the Novartis Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of the Group regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Novartis or its Sandoz Division will achieve any particular future financial results or future growth rates or that Novartis or Sandoz will be able to realize any potential synergies, strategic benefits or opportunities as a result of the acquisition. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; disruptions from the integration of Fougera making it more difficult to maintain business and operational relationships, and relationships with key employees; unexpected product manufacturing issues; uncertainties involved in the development of new generic pharmaceutical products; unexpected patent litigation outcomes; unexpected inabilities to obtain or maintain exclusivity periods for developed products; competition in general; government, industry, and general public pricing and other political pressures; the impact that the foregoing factors could have on the values attributed to the Group's assets and liabilities as recorded in the Group's consolidated balance sheet; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Novartis is providing the information in these materials as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

Teva Pharmaceutical Industries Broke Out After Court Ruling

Teva Pharmaceutical Industries announced Tuesday morning that the U.S. District Court for the Southern District of New York denied a motion for summary judgment, filed by Sandoz Inc./Momenta Pharmaceuticals Inc., that the patents at issue are invalid for indefiniteness.

Teva Pharmaceutical broke out sharply to the upside around mid-morning Tuesday and finished higher by 1.34 at $53.12 on above average volume. The stock has been climbing for the past week and set a month and a half high.

Financing Activity May Lift Cloud Hanging over Biotech Industry

Although investors are grasping at any positive sign of improvement in the economy to push a market rally forward, the recession is still very much with us. A rally in the beginning of last week fizzled ahead of the holiday weekend as investors remained concerned about the U.S. government's interventions to stimulate the economy. But while biotech leaders from all over the world gathered at the 2009 BIO International Convention in Atlanta, financing activity in the sector raised hope that the cloud hanging over the industry may be lifting a little.

Public markets remain dry, but companies raising venture capital and private equity financings are having quite a bit of success. Small U.S. public companies are tapping the private markets and seem to be especially fond of registered direct offerings, with six of the nine PIPEs completed last week structured in this manner.

Venture capital investment had a strong showing during the week with 15 deals. In one of the largest ever rounds of venture financing, newly formed Clovis Oncology, based in Boulder, Colorado, announced that it had secured $145 million in start-up financing. The company, founded by former executives of Pharmion Corporation, is focused on acquiring, develop and marketing innovative anti-cancer compounds in all stages of clinical development. Investors in Clovis include Domain Associates, New Enterprise Associates (NEA), Versant Ventures, Aberdare Ventures, Abingworth, Frazier Healthcare Ventures, ProQuest Investments and the Company's management team. Pharmion was acquired by Celgene (CELG) in 2008 for $2.9 billion.

Molecular imaging products developer Avid Radiopharmaceuticals completed the first closing of a $34.5 million Series D financing led by Alta Partners, Also participating in the financing were existing investors AllianceBernstein, Safeguard Scientifics, Pfizer Venture Investments, Lilly Ventures, RK Ventures Group, LLC and BioAdvance (Biotechnology Greenhouse of Southeastern Pennsylvania).

Philadelphia-based Avid will use the proceeds to fund the completion of the development and, if approved, to commercialize its Alzheimer’s amyloid imaging compound. The funding will also allow it to continue it mid-stage clinical development of its Parkinson’s disease imaging compound. In conjunction with the progress of its clinical trials, Avid is providing its amyloid imaging compound to measure amyloid burden as a biomarker in Phase II and Phase III trials of experimental drug under development by several major pharmaceutical company collaborators.

Specialty pharma Sagent Pharmaceuticals raised $30 million in a second Series A financing extension with pre-existing and new strategic investors. The round was again led by Vivo Ventures. With more than 200 products in development, Sagent, based in Schaumburg, Illinois, focuses on injectable products, and has filed more than 70 aNDAs to date, according to the company’s CEO Jeffrey Yordon. He expects to have more than 20 products in the market by the end of the year.

The pharmaceutical industry continued its biotech buying spree as Johnson & Johnson (JNJ) said it will acquire Cougar Biotechnology (CGRB) for approximately $1 billion in a cash tender offer to gain access to a late-stage, first-in-class prostate cancer treatment. Cougar is currently conducting two late-stage trials for abiraterone acetate, a first in class compound for the treatment of prostate cancer. The Los Angeles-based biopharmaceutical company has compounds in development for the treatment of prostate cancer, as well as breast cancer and multiple myeloma, will work with Ortho Biotech Oncology Research & Development, a unit of Centocor Research & Development, a Johnson & Johnson company.

Cambridge, Massachusetts biotech Elixir Pharmaceuticals (ELXR) completed a $12 million equity financing and entered into an agreement with Novartis (NVS) granting the pharma an exclusive option to acquire Elixir following the successful completion of a Phase 2a clinical study of Elixir’s lead oral ghrelin antagonist, currently in preclinical, IND-enabling studies. The deal with Novartis could exceed $500 million and also includes Novartis' right to an exclusive worldwide license under pre-agreed conditions.

Elixir is developing small molecule drugs that mimic these longevity responses to treat a range of age-related diseases, including the major metabolic diseases. In addition to its oral ghrelin antagonist program, Elixir has two product candidates which have recently completed Phase 3 clinical trials for the treatment of type 2 diabetes.

Finally, pharmaceutical companies are determined to be major players in the generics market. Novartis is acquiring the specialty generic injectables business of Austria's EBEWE Pharma for $1.2 billion, strengthening its Sandoz generic division's global platform of generic oncology medicines. And Pfizer (PFE) entered into licensing agreements with two pharmaceutical companies based in India, Aurobindo Pharma and Claris Lifesciences, in a move that strengthens its position in generic medications in emerging markets.