Research and Markets: Merck and AstraZeneca were the most active big pharma companies in forging alliances - Spectrum Quarterly Deal Review -- Fourth Quarter 2005.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c36369) has announced the addition of Spectrum Quarterly Deal Review--Fourth Quarter 2005 to their offering

In This Issue...Aside from biotechnology's continued hot streak on Wall Street, the fourth quarter was a quiet one for the life sciences industry, which raised only $6.4 billion in financings, the lowest quarterly total of 2005. Only four initial public offerings (IPOs) were made in the United States, and both alliance and ownership activity dropped dramatically. Secondary public offerings (SPOs) were the only financial vehicle that increased over the third quarter's totals, and biotech stocks turned in a strong fourth quarter, outperforming the life sciences industry and the U.S. economy as a whole. In this report, we review the fourth quarter's IPOs, SPOs, debt financings, private placement and venture capital activity, ownership changes, and company alliances. The author also examines the most active pharmaceutical and biotech companies of the quarter. In addition, they take an in-depth look at the year-end bidding war for Guidant that drew the attention of the life sciences industry--as well as the business world in general--by highlighting the current and likely continued profitability of drug-eluting stents in the cardiovascular industry.

Business Implications

Activities of Note

Several major corporate events relating to cardiology occurred in the fourth quarter of 2005. They include multibillion-dollar acquisitions by Boston Scientific and St. Jude Medical relating to implantable medical devices and an alliance potentially worth $1 billion between AstraZeneca and AtheroGenics. The alliance is designed to strengthen AstraZeneca's cardiovascular franchise. The biotechnology industry recorded a strong fourth quarter on U.S. markets. The AMEX and NASDAQ biotechnology indices rose 5% and 0.7%, respectively, while the Dow and NASDAQ rose 1.4% and 2.4%, respectively. Pharmaceutical stocks were sluggish; the AMEX pharmaceutical index dropped 0.6%. The life sciences industry raised only $6.4 billion in the fourth quarter, the lowest quarterly financing total of the year. During 2005, life sciences financings averaged $7.1 billion per quarter. A total of ten life sciences IPOs were made during the fourth quarter, only four of which were made in the United States, down from six IPOs the previous quarter. Alliance activity dropped sharply for the third consecutive quarter. In the fourth quarter, life sciences companies entered 199 alliances, down from 296 the previous quarter. In addition to oncology, immunology and infectious diseases remained the key therapeutic foci for alliance formation. Merck and AstraZeneca were the most active big pharma companies in forging alliances; both made deals with biotech partners for potential entry into the severe sepsis arena. The number of ownership changes fell in the fourth quarter, but their value managed to nearly match the third quarter's $15.2 billion. A total of 37 ownership changes were made in the fourth quarter, exactly half the third quarter's total of 74. The largest deal of the fourth quarter was Novartis's $5.1 billion acquisition of Chiron.

Contents are as follows:-

Overview
Major Corporate Events in Cardiology--A Year-End Bidding War over
Drug-Eluting Stents
A Brief Look at Guidant
Why Guidant Was Attractive to Johnson & Johnson
Why Guidant Was Attractive to Boston Scientific
Backed by Abbott, Boston Scientific Prevails
Warning Letter from the FDA and Device Safety Issues
Patent Struggles Continue
Future Acquisition Candidates for Johnson & Johnson
Financings
Initial Public Offerings
Secondary Public Offerings
Debt Financings
Private Placements and Venture Capital
Ownership Changes
Novartis/Chiron
Allergan/Inamed
Amgen/Abgenix
St. Jude Medical/Advanced Neuromodulation Systems
Alliances
AstraZeneca/AtheroGenics
Pfizer/Incyte
AstraZeneca/Protherics
Roche/BioCryst Pharmaceuticals
Novartis/Astex Therapeutics
Most Active Pharmaceutical Companies
Most Active Biotechnology Companies
Drug-Eluting Stents

Table 1. Launch Date for Drug-Eluting Stents
Figure 2. Worldwide Market Share of Drug-Eluting Stents, 2005
Table 2. Major Milestones in the Bidding War for Guidant
Figure 3. Worldwide Sales Comparison: Boston Scientific's Taxus Stent
vs. Cordis/Johnson & Johnson's Cypher Stent Figure 4 Life Sciences
Financings, First Quarter 2004 Through Fourth Quarter 2005
Figure 5. Life Sciences Financings by Transaction Type, Fourth Quarter
2005
Table 3. Biotechnology Component of Financing, Fourth Quarter 2005
Table 4. U.S. Life Sciences Initial Public Offerings, Fourth Quarter
2005
Table 5. Non-U.S. Life Sciences Initial Public Offerings, Fourth
Quarter 2005
Figure 6. Life Sciences Secondary Public Offerings, First Quarter 2004
Through Fourth Quarter 2005
Table 6. Top Ten Life Sciences Secondary Public Offerings, Fourth
Quarter 2005
Figure 7. Life Sciences Debt Financings, First Quarter 2004 Through
Fourth Quarter 2005
Table 7. Top Ten Life Sciences Debt Financings, Fourth Quarter 2005
Figure 8. Life Sciences Private Placement Funding, First Quarter 2004
Through Fourth Quarter 2005
Table 8. Top Ten Life Sciences Private Placements, Fourth Quarter 2005
Figure 9. Life Sciences Venture Capital Funding, First Quarter 2004
Through Fourth Quarter 2005
Table 9. Top Ten Life Sciences Venture Capital Deals, Fourth Quarter
2005
Table 10. Top Ten Life Sciences Ownership Changes, Fourth Quarter 2005
Table 11. Top Ten Life Sciences Alliances, Fourth Quarter 2005
Figure 10. Alliance Participation by Company Type, Fourth Quarter 2005
Figure 11. Alliances by Transaction Type, Fourth Quarter 2005

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Source: Decision Resources, Inc.