While listening to last week's presentation by BMS on their pipeline, one slide in particular caught my attention:
Now, it wasn't the fact that BMS were second in their table of Total Shareholder Return (TSR) that was interesting to me, but that Abbott were first, and by a long way, according to the chart above. Of course, shareholder return is only one measure of performance and says nothing at all about putting customers and patients first, but that is another story/blog.
Recently, Abbott has been in the news with the acquisition of Solvay, a generics company, which added $3B to their revenues and last night it was announced that the company are also acquiring Facet Biotech, which was being pursued by Biogen Idec. The Biogen deal clearly fell apart after the company declined to raise their offer beyond $17.50/share. Abbott offered $27/share and thus a white knight was found. Interestingly, the Facet CEO, Faheem Hasnain, is a former employee of Biogen Idec.
The acquisition is a hot one, so to speak, and many of us in the industry have been speculating in vain on who the partner might be, so you would think that going on CNBC's Pharma's Market with Mike Huckman would be a nice coup for a small company. I thought it was odd though, to see that they seem a little publicity shy, as this tweet shows the company's rather gauche immaturity:
What do Abbott get from acquiring Facet?
Well, first we need to think about where Abbott is coming from. Most companies with either build on existing platforms and franchises or add new products in areas where they want to expand. Abbott is probably best known for it's immunology franchise, with adalimumab (Humira), its TNF inhibitor for rheumatoid arthritis and psoriasis.
Several companies, including Abbott and BMS, have embarked on a race to develop the next generation of Hepatitic C drugs and vaccines. Infectious diseases are not something that are going away fast, so this is seen as an attractive market segment by many.
Looking at the Facet acquisition, the pipeline is thus interesting because they have also been developing monoclonal antibodies but in different diseases including immunology and cancer. The lead compound is daclizumab, which is in phase II development for multiple sclerosis in partnership with… Biogen Idec. Facet own the exclusive rights to the asthma indication though.
There are also several anticancer antibodies such as volocizumab (solid tumours) and elotuzumab (multiple myeloma) in Facet's R&D. Oncology is an area where Abbott has been relatively weak, although they have some interesting compounds in development for liquid and solid malignancies. In 2009, a joint venture with TAP was concluded, adding Lupron, one of the best selling drugs for hormone-sensitive prostate cancer to the portfolio of currently marketed products.
Abbott may well see topline growth from it's cancer franchise in the future… if the pipeline products from their own labs or Facet's deliver. If those from Facet fail, Biogen Idec will be breathing a sigh of relief that their offer was turned down.
Such is life on the Pharma roller coaster.