Endocyte Inc.'s decision two years ago to shelve its own pipeline and look for other opportunities was a difficult call that eventually paid off for investors, its former CEO said Friday at IBJ’s Life Sciences Power Breakfast.
The escalation in per-share price—which far exceeds that of other recent deals involving Indiana public companies—reflects the unique nature of M&A in the pharmaceutical realm.
Executives and directors of the West Lafayette-based biotech hold nearly 9 percent of Endocyte stock, worth about $177 million, based on the deal price of $24 a share.
The Treasury pilot program implements broader powers Congress granted this year to the Committee on Foreign Investment in the U.S., a panel of officials who review foreign takeover of American firms and can recommend that the president block deals that threaten national security.
The West Lafayette biotech firm’s stock traded as low as $1.41 last fall, following multiple setbacks and restructurings. But the stock had soared to $24 Thursday morning after news that it would be acquired by Novartis.
One year ago, Indiana-based Endocyte Inc. bought the rights to a prostate cancer treatment for $12 million, plus future considerations. On Thursday, Novartis AG agreed to pay almost 200 times that amount to acquire Endocyte and the experimental therapy.
The deal represents a huge breakthrough for tiny Endocyte, which has about 90 employees in Indiana but has not yet launched a single product.
After struggling for more than 20 years to develop cancer drugs without success, West Lafayette-based Endocyte Inc. is pausing it own R&D efforts to concentrate on a potential blockbuster drug from a German chemical company.
The West Lafayette-based company has named CFO and COO Mike Sherman as new CEO and president, but did not give a reason for the abrupt change in leadership.
Malicious software used to hack into Anthem Inc.’s computers and steal 78.8 million patient records bears a striking resemblance to malware attributed to Chinese hackers, according to a Virginia-based security firm, ThreatConnect. The chief information officer of ThreatConnect told the Washington Post that the same malicious software was used to target a small U.S. defense […]
Endocyte’s lead drug showed big impact on lung cancer patients, but some analysts think the company should scrap it for a newer drug that is more powerful.
The U.S. Food and Drug Administration approved a new Type 2 diabetes drug from Indianapolis-based drugmaker Eli Lilly and Co. and its German partner, Boehringer Ingelheim, according to the Associated Press. The drug, called Jardiance, is designed to block glucose reabsorption in kidneys and remove excess glucose through urine. Unlike many other diabetes treatments, it does not depend on a patient's insulin levels to be effective. European Union regulators approved the drug, also known as empagliflozin, in May. Lilly is expected to garner $518 million in annual sales from Jardiance by 2019, according to the average of five analyst estimates compiled by Bloomberg earlier this year. Lilly and Boehringer had said FDA didn't approve the drug because of concerns about the Boehringer factory in Germany where it will be made. But a Lilly spokeswoman said Friday those concerns have been resolved.
Indianapolis-based SonarMed Inc., which makes an airway monitoring system used in operating rooms and intensive care units, has raised $2.4 million from institutional investors, according to the BioCrossroads life sciences business development group. The Series A1 funding round was led by Baylor Angel Network, Hyde Park Angels, Visiontech Partners, BioCrossroads’ Indiana Seed Fund II, Spring Mill Ventures, two former Abbott Laboratories executives and the SonarMed management team. SonarMed will use the money to develop a second version of its adult monitoring system as well as a version for children and infants. “Providers are being pressured to find new and better ways to provide higher quality care with a focus on patient safety, and doing so with fewer resources,” said SonarMed CEO Tom Bumgardner. “Consequently, health care systems are increasingly interested in our technology.”
Endocyte Inc. swung to a second-quarter profit of $22.4 million due to a change in accounting after its leading drug candidate failed and its partner, New Jersey-based Merck & Co. Inc., cancelled its development contract. The West Lafayette-based drug development firm earned 52 cents per diluted share compared with a loss of 23 cents per share in the same quarter last year. Revenue shot to $49.2 million from $16.5 million. All of that money comes from collaboration payments from Merck, not all of which were immediately recognized in Endocyte’s accounting. But now that the contract has ended, Endocyte accelerated its accounting recognition of the revenue, producing the spike in revenue and profit. After the failure in May of its drug vintafolide as a treatment for ovarian cancer, Endocyte is continuing to study the drug as a non-small cell lung cancer drug. The company has no products on the market.
WellPoint Inc. beat expectations with its second-quarter profit and raised its full-year profit forecast. But unlike peers UnitedHealth Group and Aetna, the Indianapolis-based health insurer could not improve its profit over the same quarter last year. Profit fell 8.6 percent, to $731.1 million, from $800.1 million. Excluding investment gains and other special items, WellPoint earned $2.44 per share. On that basis, Wall Street analysts expected $2.26, according to a survey by Thomson Reuters. WellPoint raised its full-year profit forecast 10 cents per share, saying it now expects more than $8.60 per share. Revenue rose 4.4 percent to nearly $18.5 billion. Analysts expected $18.2 billion, according to Thomson Reuters.
More than 100 Indiana firms since January have told federal regulators they plan to offer up ownership stakes or take on debt. That’s approaching a year’s worth of activity in less than six months, based on the state’s performance the past few years. Firms selling equity or debt include numerous health care firms, such as RepuCare, HC1.com, Indigo BioSystems, SonarMed and Wellfount. Indigo CEO Randy Julian boiled his firm’s investment timing down to, “It was time to mash the pedal to the floor and go.” The 47-employee company, which develops software for medical laboratories, secured $8.5 million earlier this month. “I do think if you look around,” Julian said, “the other companies that have raised money have had some component of that story that’s the same.”
Carmel-based Mainstreet has built 14 short-term rehabilitation facilities—usually near hospitals—and has 17 more under construction or in planning stages. That rapid building helped drive the company from $11 million in revenue in 2011 to more than $66 million two years later, making it the fastest-growing private company in the Indianapolis area. “We’re in the right place at the right time. We’ve invested heavily into our systems and our designs and now are really bearing the fruits of a lot of years of labor,” said Mainstreet CEO Zeke Turner. Beginning in 2015, rather than only build facilities that others operate, Mainstreet will begin to operate some facilities that it builds. The first two Mainstreet-operated facilities are scheduled to open in Carmel and Bloomington.
Shares of central Indiana pharmaceutical firm Endocyte Inc. lost 15 percent of their value last week after industry giant Merck & Co. Inc. gave up on developing Endocyte cancer drug vintafolide. On Tuesday evening, West-Lafayette-based Endocyte said it had regained worldwide rights to vintafolide from Merck. The move essentially meant Endocyte lost Merck’s financial backing and sales muscle for the drug. The treatment failed a key study last month, leading to a 62-percent single-day drop in Endocyte's share price on May 2. Endocyte and Merck announced May 19 that they were terminating a clinical trial of the drug, after an analysis showed vintafolide didn’t demonstrate efficacy when treating patients with platinum-resistant ovarian cancer. Endocyte said it will continue to test vintafolide for lung cancer. Shares of Endocyte closed Friday at $6.55 apiece.
The company, once heralded for a promising cancer treatment, is down but not out.
Indiana University plans to turn the former Wishard Memorial Hospital campus into a 26-acre, $200 million research complex that would bridge IU’s School of Medicine with the city’s life sciences firms, including those at the nascent 16 Tech business park. The plans call for classrooms, offices, labs and business-incubation space. The university is trying to lure the newly created Indiana Biosciences Research Institute to the facility. And the School of Medicine wants to set up a drug discovery center, which would house 12 of its faculty. IU’s public health and dentistry schools have eyed the complex as a possible home base, said Jay Hess, dean of the IU med school. The former Wishard will also become the new home of the Indiana University Research and Technology Corp, which tries to commercialize the intellectual property created at IU. The IURTC announced in April that it will sell its Innovation Center on West 10th Street.
A highly touted partnership between St. Vincent Health, Community Health Network and the Suburban Health Organization is coming to an end—just 18 months after it began. The Accountable Care Consortium was envisioned as a vehicle through which the hospitals would eventually funnel all of their roughly $2.5 billion in annual contracts with health insurers and employers. Those contracts would have been based on the ability of St. Vincent, Community and the suburban hospitals to keep patients healthy and in need of less care, especially expensive hospitalizations and surgeries. The concept is known in health care circles as “population health management.” The consortium signed up 12 employers as customers—half of which were among the hospitals that formed the consortium. Those hospitals included the 22 operated by St. Vincent, eight operated by Community and six that are part of the Suburban Health Organization. But the hospitals found that changes in the marketplace were happening at a faster pace than they anticipated—making it difficult to coordinate responses fast enough.
Endocyte Inc. stock plunged more than 60 percent Friday after the drug it’s developing with Merck & Co. backing failed to help patients in an ovarian cancer trial. The news could be particularly bad for the West Lafayette-based company, which has no other marketed products. According to Bloomberg News, the Phase 3 study was stopped after an analysis showed that vintafolide didn’t demonstrate efficiency when treating patients with platinum-resistant ovarian cancer, the companies said in a statement Friday. Just over a month ago, Endocyte was being mentioned as a possible premium takeover target after it reported that vintafolide slowed progression of lung cancer and won European backing to treat ovarian cancer. Endocyte said it will continue to test vintafolide for lung cancer, with late-stage data possible toward the end of the year. Endocyte has 70 employees in West Lafayette and 25 in Indianapolis. An Endocyte spokeswoman declined to say whether Endocyte expects to trim its work force as a result of the setback with vintafolide.
Health information technology firm hc1.com promised to nearly triple its Indiana work force over the next five years, adding 175 jobs by 2019. Hc1.com currently employs 93 people, mostly in Indiana. The company makes software that helps medical labs, radiologists and other medical offices manage patient records, bills and other data critical to managing their operations. Hc1.com will invest $2.5 million to lease and renovate 9,466 square feet to expand its existing 16,626-square-foot headquarters in Northwest Technology Park at 96th Street and Zionsville Road. The firm has quietly raised more than $14 million from investors. CEO Brad Bostic told IBJ last year that hc1.com was on track to double its $10 million in annual sales. The Indiana Economic Development Corp. offered hc1.com Inc. up to $3 million in tax credits and up to $100,000 in training grants based on the company’s job-creation plans. The credits are performance-based, meaning the company only receives them once Hoosiers are hired. Boone County is contributing $50,000.
A group of prominent corporate executives has created a new organization to find ways to reduce obesity among central Indiana children. Jump IN for Healthy Kids has a budget of $1.5 million and hired Indianapolis attorney Ron Gifford to spearhead the effort. Jump IN was founded by 17 local executives, including Eli Lilly and Co. CEO John Lechleiter, Roche Diagnostics Corp. CEO Jack Phillips, Anthem Indiana President Rob Hillman, Indiana Pacers President Jim Morris, IUPUI Chancellor Charles Bantz, Indianapolis Star Publisher Karen Crotchfelt, Lilly Endowment CEO Clay Robbins, United Way of Central Indiana CEO Ann Murtlow, YMCA of Greater Indianapolis CEO Eric Ellsworth, and the CEOs of the major hospital systems in Indianapolis. The group hopes to identify successful efforts to improve diet, activity and healthy choices among children and their families—both around Indianapolis and around the country—and then work to replicate or adapt those efforts to reach more people in the metro area. Jump IN hopes to work with schools, churches, employers, medical providers, grocery stores, neighborhood associations and individual families.
WellPoint Inc.’s first-quarter medical enrollment rose 1.3 million from the prior three-month period as WellPoint benefited from new customers through the Obamacare exchanges. According to Bloomberg News, WellPoint has the highest share of enrollments of insurers through Obamacare, with 400,000 on government exchanges through Feb. 14. Those customers also are younger than anticipated, making the company’s prediction of “double-digit” rate increases next year less likely. WellPoint said it now expects 600,000 enrollments through the public exchanges this year. WellPoint's profit swooned in the first quarter, but less than analysts expected. It earned $701 million, down 21 percent from a year earlier. Excluding investment gains and one-time charges, those profits translated into earnings per share of $2.30, down from $2.94 a year ago. But Wall Street analysts expected profit to dip as low as $2.13 per share, according to a survey by Thomson Reuters. For all of 2014, WellPoint now expects to earn more than $8.40 per share, up from a forecast of more than $8.20 it issued in March, and a forecast of $8 it issued in January.
The news this morning couldn’t have been worse for Endocyte Inc. But if it had to come, the timing couldn’t have been better–because it allowed Endocyte to raise a pile of cash to spend on the other drugs in its pipeline.
Endocyte Inc.’s stock fell more than 60 percent in early trading Friday after the drug it’s developing with Merck & Co.’s backing failed to help patients in a trial for ovarian cancer.
Another public stock offering by the West Lafayette-based drugmaker swells its war chest for cancer drug development to $225 million.
FAST BioMedical has been awarded a $1 million grant from the National Institutes of Health to conduct a clinical trial of the diagnostic tool it is developing to measure plasma volume and kidney function in hospitalized patients. The grant, part of the federal Small Business Innovation Research program, adds to more than $16 million FAST has raised. The Indianapolis-based company said in January that it wants to raise as much as $25 million in the next two years to bring its product to market. “We believe that a quantitative measurement of a patient’s plasma and blood volume status and kidney function will have a demonstrable impact on outcomes in an area of medicine that has seen only modest advances in previous decades,” Dr. Bruce Molitoris, FAST’s medical director, said in a prepared statement. “Currently, physicians don’t have either a direct or timely way to assess these key parameters clinically.”
West Lafayette-based Endocyte Inc. could fetch a takeover bid at one of the industry’s highest premiums on record, according to Bloomberg News. Endocyte’s drug vintafolide has proved effective against both ovarian and lung cancers during clinical trials, raising the prospects for the company’s entire technology for developing targeted drugs for cancer and inflammatory diseases. Endocyte may command about $50 per share in a sale, up from its closing price of $21.96 on Friday, according to the average of four estimates compiled by Bloomberg. The estimates ranged from $35 per share to $65 per share. That would be the second-highest takeover premium on record among similar U.S. deals in the industry. According to a report by the Royal Bank of Canada, that could spark a takeover bid from Merck & Co. Inc., which has already paid for vintafolide’s late-stage development and will sell it as an ovarian cancer treatment in Europe. But Endocyte retains rights to the underlying technology and other drugs developed from it. AstraZeneca plc or Roche Holding AG also could be interested, according to a report from Cowen Group Inc. If vintafolide is approved for ovarian and lung cancer in the U.S. and Europe, it could bring in as much as $2 billion in revenue, according to Edward Tenthoff, a New York-based analyst at Piper Jaffray Cos. Endocyte is now developing another cancer drug that targets cells in the same way as vintafolide, though with a potentially more potent chemotherapy drug. “If you have other ones that might be better, that might be problematic for Merck,” said Robert Hazlett, a pharmaceutical analyst at Roth Capital Partners LLC. “It may need to seriously consider Endocyte.”
Indianapolis-based Dow AgroSciences LLC is likely to become a stand-alone public company in the next three years, according to some Wall Street analysts—if in a year or two Dow Agro’s profits are on course to double from current levels. Of course, the parent company of Dow Agro, Michigan-based Dow Chemical Co., could sell Indianapolis-based Dow Agro to another agricultural company, as it tried to do back in 2009. Analysts said Dow Chemical didn’t like the offers it received at the time, which was in the darkest days of the global recession. One reason for selling Dow Agro to another company is that its fast-growing seed business has yet to achieve the scale needed to support the massive R&D investments Dow has made in that area in recent years. Dow Agro’s $7 billion in annual revenue would rank it as the fifth-largest public company in Indiana, behind only WellPoint Inc., Eli Lilly and Co., Cummins Inc. and Steel Dynamics Inc. The company has annual cash flow of about $1 billion, and thinks a raft of new products can double those profits in five to seven years. Dow Agro employs about 1,800 people here, and its most recent hiring expansion touted annual wages from $65,000 to $95,000.
Now that Indiana-based Endocyte Inc.’s experimental cancer treatment is proving successful, the company may command a takeover bid at one of the industry’s highest premiums on record.
