Shares of Endocyte Inc. more than doubled in value Monday morning after the company unveiled an up to $1 billion deal with Merck & Co. Inc. to bring an ovarian cancer drug to market. West Lafayette-based Endocyte’s stock had fallen 60 percent in the past 12 months. New Jersey-based Merck will pay Endocyte $120 million upfront with as much as $880 million in future payments possible based on regulatory approvals and sales of the drug EC145, also known as vitafolide. The agreement gives Merck worldwide commercial rights to EC145, in exchange for double-digit royalty payments to Endocyte. The two companies will split sales revenue and marketing costs in the United States. Endocyte already has begun studying EC145 as a potential lung cancer treatment, and intends to study it in still more applications. Merck also gained the rights to the drug for those other types of cancer. Chris Raymond, an analyst at Robert W. Baird & Co., called the agreement “an amazing deal” for Endocyte.
Shareholders of Eli Lilly and Co. failed once gain to remove the drugmaker’s tough poison-pill provision against unwanted buyers. The proposal garnered 62.4 percent of the shares voted at Monday’s annual meeting of shareholders, according to preliminary voting results. To pass, the proposal needed support from the owners of 80 percent of Lilly’s shares. That means Lilly’s corporate bylaws still contain an 80-percent approval threshold for hostile takeover bids, even though the company’s board has recommended removing the policy in each of the past three years. The proposal that failed Monday would have required just a bare majority of shareholder votes to approve key moves commonly used in hostile takeovers. In the past two years, the same proposal received 74 percent and 73 percent of all shares, respectively. The supermajority vote requirement dates from the 1980s, the heyday of “corporate raiders” making unsolicited bids to buy public companies. Lilly’s board, which has been fiercely independent during multiple waves of consolidation in the pharmaceutical industry, finally began to support removing the high threshold in 2010. That decision followed three straight years in which a majority of Lilly shareholders expressed support for removing the supermajority voting requirements.
Roche Diagnostics Corp.’s North American sales rose 7 percent in the first quarter, to 615 million Swiss francs, or about $670 million in U.S. dollars, assuming constant exchange rates across the world. The Swiss company’s North American headquarters is in Indianapolis, along with a significant diabetes manufacturing operation. Diabetes sales in North America shrank in the quarter 5 percent, to 119 million Swiss francs, or $130 million. Roche’s sales of lab and testing equipment, and the equipment and chemicals that go with it, all saw double-digit growth in the quarter. Worldwide, Roche’s diagnostic sales grew 4 percent, in constant currencies, to $2.4 billion Swiss francs, or $2.6 billion.
Bloomington-based medical-device maker Cook Group acquired General BioTechnology LLC, an Indianapolis biotech company with about 20 employees. Terms of the deal were not announced. Cook will rename the company Cook General BioTechnology LLC. General BioTechnology was founded in 1997 by former Indiana University School of Medicine researchers. It operates an umbilical-cord blood and tissue bank for families called The Genesis Bank and a reproductive tissue bank called Genome Resources.
Biomet Inc.’s sales rose 5 percent in the three months ended Feb. 29, to nearly $709 million, compared with the same period a year ago. The growth was driven by increased volumes in North America and the Pacific Rim. The Warsaw-based orthopedic-implant maker’s financial results are always closely watched as an early signal for the rest of the industry, which will report first-quarter results later this month. Biomet’s sales of knee implants rose 4 percent and sales of its hip implants rose 6 percent, compared with the same quarter last year. The company’s operating income rose 14 percent, to $108.1 million, primarily due to lower amortization expenses recorded from the company’s 2007 buyout by private equity firms. Biomet has a whopping $5.3 billion in debt, which required interest payments in the quarter of $117 million. That expense and tax payments led Biomet to a loss for the quarter of $16.5 million, up from $11.6 million a year ago.