Ranbaxy's Singh Brothers to Pay Daiichi Sankyo US $ 529 Million, An API Mega-Merger, Valeant Wannabe Endo Faces a Meltdown

Ranbaxy’s Singh brothers to pay Daiichi Sankyo US $ 529 million, an API mega-merger, Valeant wannabe Endo faces a meltdown & more

This week, Phispers brings you news of an impending mega-merger in the field of APIs, a trade body’s claim that Brexit won’t be good for patients in the UK and Medivation’s change of heart regarding a sell-off.

Court finds Ranbaxy’s Singh brothers concealed and misrepresented information

A Singapore court has ordered Malvinder and Shivinder Singh – former owners of Indian drug maker Ranbaxy – to pay US $ 529 million (GBP 367 million) to Japan’s Daiichi Sankyo and settle arbitration.

The award pertains to the accusation by Daiichi that the Singh brothers had concealed and misrepresented information regarding US Food and Drug Administration (FDA) and Department of Justice (DoJ) investigations when Daiichi bought 35 percent stake in Ranbaxy from them in 2008.

Daiichi sold its entire stake in Ranbaxy in 2015, when Sun Pharma acquired Ranbaxy for US $ 4 billion. In 2013, Ranbaxy was fined US $ 500 million in the FDA and DoJ investigation for knowingly selling substandard drugs as a result of manufacturing and regulatory failings.

In another blow to Ranbaxy (now Sun Pharma), the Indian drug regulator is following up on the action taken by state regulators on observations made by the Indian central drug authority during the June-July 2013 period. A reminder was sent to the state drug regulator in June 2015 as there has been no action from the local authority.

AMRI and Euticals sign definitive agreement for an API mega-merger

On May 5, Albany Molecular Research Inc. (AMRI) signed a definitive agreement to acquire all outstanding shares of Italy-headquartered Prime European Therapeuticals (or Euticals, as it is popularly known).

The transaction has been valued at around US $ 358 million and consists of shares of AMRI common stock, cash, and a seller note. Privately-held Euticals specializes in custom synthesis and the manufacture of APIs.

It operates API facilities in Italy, Germany, US and France. “Euticals’ expertise with niche and high barrier to entry technologies and products, including certain tetracyclines, monobactams, sterile and fermented APIs and controlled substances, will be a tremendous asset to us,” William S. Marth, AMRI's president and chief executive officer, said.

AMRI generated approximately $402 million of revenue in the twelve months ended December 31, 2015 however declared a first-quarter loss of $10.1 million this week. AMRI’s proposed acquisition of Euticals will increase revenue by around $245 million.

Endo feels the pain as Valeant’s new CEO makes headlines

As Valeant Pharmaceuticals' new CEO Joseph Papa takes charge, Irish-domiciled specialty pharma company Endo, which is known to mimic Valeant, is feeling the pain. As with Valeant, Endo is under pressure to lower prices, especially for its pain products.

Mimicking what Valeant did in March, this week Endo slashed full-year revenue guidance it had recently put out. The US $ 500 million cut in guidance was much larger than what anyone had expected.

Endo is run by Valeant's former COO, Rajiv De Silva and has, like Valeant, tended to buy older drugs, used inversions to lower tax rates, and built up debt with a series of acquisitions.

Meanwhile, Papa told CNBC that he is “not in it for money”. Valeant is learnt to pay Papa US $ 67.4 million in cash, options and restricted stock this year. “To me this is all about if I can play a small role in improving Valeant...,” he said.

Brexit could put patients at risk in the United Kingdom

Britain's pharmaceuticals trade body – the Association of the British Pharmaceutical Industry (ABPI) – has voiced concerns about Brexit. It has said if the country was to exit the European Union, it would put British patients at the back of the line for new medicines.

ABPI chief executive Mike Thompson said his members were “overwhelmingly supportive of remaining in the EU”, especially given the concerns over disruption to the pan-European drug approval system provided by the European Medicines Agency (EMA).

“If we left the EU, this would mean that the licensing of new medicines would have to be handled by a UK agency as well as a European agency,” Thompson said. According to him, ABPI members have confirmed that applications for a UK license would come “after the European license, due to the smaller patient population in the UK.”

Medivation succumbs to sale pressure, starts exploring options

US cancer drug maker Medivation Inc. is reportedly now open to a sale, after France’s Sanofi SA made a US $ 9.3 billion offer to buy the company on April 28. Among the other companies that have signed a non-disclosure agreement with Medivation are Pfizer and Amgen. The agreement allows them to obtain confidential information about Medivation.

Earlier, Sanofi had complained that Medivation was refusing to engage in negotiations. Last week, Medivation had said Sanofi's US $ 52.50 per share cash offer “substantially undervalues the company.”

Sanofi is said to be willing to raise its offer as long as Medivation engages in negotiations. Sanofi has also threatened to go directly to shareholders to oust Medivation’s board if it does not engage in negotiations.

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