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Vertex beats out Big Pharma to acquire ViroChem for $375M
 
 
  Posted on March 5, 2009 at 2:40 PM
http://www.thedeal.com
 
HepatitisCvirus.pngVertex Pharmaceuticals Inc. (NASDAQ:VRTX) acquired Canadian drugmaker ViroChem Pharma Inc. for about $375 million in cash and stock. And it seems Vertex used a simple negotiating tactic to beat out bigger rivals to buy the maker of some coveted drugs that treat Hepatitis C -- talking one on one.
 
Kurt Graves, Vertex's chief commercial officer and head of strategic development, told Reuters, "From a competitive point of view, every big pharmaceutical company was in there negotiating. But we were able at the last minute to make a move to get the company to talk to us alone for a few days, which enabled us to get the deal over the finish line."
 
Graves said he was able to show ViroChem they had advantage with U.S. regulators regarding a drug treatment that was further along in development than its competitors. The article also says Vertex is looking for more collaboration for the Hepatitis C-related drugs.
 
ViroChem shareholders will receive $100 million in cash and 9.9 million shares of Vertex common stock. - Baz Hiralal
 

Vertex out-foxes big pharma to acquire ViroChem
03.04.09, 01:38 PM EST

http://www.forbes.com
 
* Vertex says out-wits big pharma to buy ViroChem
 
* Price represents good value for money

 
By Toni Clarke
 
BOSTON (Reuters) - Vertex Pharmaceuticals Inc (nasdaq: VRTX - news - people ) was able to leverage the power of its experimental hepatitis C drug, telaprevir, to acquire Canadian drugmaker ViroChem Pharma Inc, despite competition from much richer rivals, according to a top Vertex executive.
 
The Cambridge, Massachusetts-based biotechnology company said late Tuesday it agreed to acquire privately held ViroChem for $100 million in cash and 9.9 million shares of Vertex stock, bringing the value of the deal to roughly $375 million based on Vertex's closing share price.
 
Some analysts said the price was steep and Vertex's shares were up 13 cents at $28.09 in midday trading Wednesday, but Kurt Graves, the company's chief commercial officer and head of strategic development, said the company exercised smart and nimble negotiating tactics to win ViroChem's promising hepatitis C drugs.
 
"From a competitive point of view, every big pharmaceutical company was in there negotiating," he said in an interview. "But we were able at the last minute to make a move to get the company to talk to us alone for a few days, which enabled us to get the deal over the finish line."
 
The acquisition gives Vertex several experimental hepatitis C drugs it plans to test in combination with telaprevir, which is in late-stage development and leads the pack among a slew of experimental drugs known as specifically targeted antiviral therapies for hepatitis C, or STAT-C.
 
ViroChem's lead products are two polymerase inhibitors known as VCH-222 and VCH-759. They are both in the early stages of development.
 
Protease and polymerase inhibitors block proteins the hepatitis C virus needs to replicate. Telaprevir is a protease inhibitor.
 
Several other companies are developing protease and polymerase inhibitors, including Swiss drugmaker Roche Holding (other-otc: RHHBY.PK - news - people ) AG, through its partnerships with InterMune (nasdaq: ITMN - news - people ) Inc and Pharmasset (nasdaq: VRUS - news - people ) Inc.
 
But since telaprevir is further along than any other protease inhibitor, Graves believes Vertex's combination therapy will be first to the market as well. The reason, he said, is that U.S. regulators are more likely to approve a treatment quickly when they are familiar with at least one part of it.
 
It is an argument that gave Vertex an advantage when negotiating with ViroChem, Graves said.
 
Graves considers ViroChem's VCH-222 product as powerful, potentially, as telaprevir, although as analysts cautioned, it is currently in very early development.
 
"As the lead drug, VCH-222 has only been tested in 13 individuals, with transient headache as the most common side effect," said Brian Abrahams, an analyst at Oppenheimer & Co. "Longer-term safety remains the biggest risk in our view."
 
Even so, he said "we believe the potential combination of telaprevir with VCH-222 or VCH-759 could help Vertex maintain its leadership position in the increasingly competitive HCV space."
 
Vertex aims to file for approval of telaprevir in the second half of next year. The company plans to initiate its first combination study in the second half of this year.
 
Graves said Vertex is not averse to doing other deals if the opportunity arises, although the list of interesting candidates is short.
 
"There are still some other things out there that we are interested in looking at," he said, while declining to be specific. "We're definitely not done looking at collaborations in hepatitis C." (Editing by Andre Grenon)
 
 
 
 
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