[An unusual wrinkle in KG’s offer for ALO is that ALO’s Embeda (#msg-27217152, #msg-28675788) is similar to PTIE’s Remoxy, which KG already owns the rights to.]
More pharma M&A action today, with King Pharmaceuticals announcing that Alpharma rejected a $1.4 billion cash buyout offer King made earlier this month. Alpharma’s decision to walk away from the offer — and the market’s reaction to today’s news — is yet another sign of the strong position held by small drug companies with products on the market.
The bid repesented a 49% premium to where Alpharma’s shares were trading when King made the offer, and a 37% premium to where the stock closed yesterday. But Alpharma went through the roof today when the bid was announced, and early this afternoon it was trading above King’s $33-per-share offer price. [ALO closed at 34.51, +44%.]
Like many larger pharma companies, King has been struggling with patent problems. Last year, the company lost a patent lawsuit over its best-selling blood-pressure drug Altace. Earlier this month, the company said its second-quarter net income tumbled 34%, as Altace faced generic competition, the WSJ notes.
And, like many larger companies, King is looking to buy its way out of trouble. Alpharma recently launched a prescription patch for pain that brought in $37.7 million in its first quarter on the market, and hopes to launch another pain drug early next year. Ken Trbovich, an analyst with RBC Capital Markets, told Bloomberg that other bidders — such as Endo, Cephalon or Johnson & Johnson, all of which already sell pain medicines — could swoop in to bid for Alpharma. “This puts them on the map with a ‘for sale’ sign in their yard, whether they wanted this or not,” he said.‹
GAITHERSBURG, Md., Nov 13 (Reuters) - An experimental painkiller from King Pharmaceuticals Inc (KG) and Pain Therapeutics Inc (PTIE) appears less susceptible to abuse than similar drugs, most members of a U.S. advisory panel said on Thursday.
A majority on the Food and Drug Administration panel said they felt the companies had shown Remoxy was less vulnerable to abuse than painkillers such as Purdue Pharma's Oxycontin. Eight members disagreed.
The FDA will make a final decision on whether to approve Remoxy. The panel's chairman said the members' views were not a formal vote as the agency had not requested one.
Some analysts forecast Remoxy sales to exceed $1 billion annually if the drug wins approval.
The FDA had asked for advice on whether Remoxy was different enough from other narcotic drugs to conclude it would be abused less and how much information about tamper-resistance should be included on prescribing instructions.
Agency officials said the panel appeared to struggle with where to set the threshold to call a drug abuse-resistant, one of the key questions the agency is grappling with internally.
"The message is that there are not a lot of answers to these very difficult questions," Dr. Bob Rappaport, director of the FDA division that reviews painkillers, said after the meeting.
Drug abusers often crush Oxycontin to snort or inject it and get a quick high.
The FDA, which wants to maintain painkiller access for patients who need it while minimizing misuse, has encouraged companies to develop abuse-resistant alternatives. That task "has proven to be more challenging than any of us would have imagined," Rappaport said.
The Remoxy capsules contain a thick gel and were designed to resist crushing, dissolving into a liquid or other forms of misuse.
The drug is not abuse-proof, Pain Therapeutics officials said. But various laboratory tests showed it was more difficult and took longer to extract a smaller amount of oxycodone, the active ingredient, when compared with Oxycontin.
"We believe we met our objective in showing Remoxy resists abuse by the oral route, snorting, injection and smoking," Michael Zamloot, a senior vice president for Pain Therapeutics, told the panel.
Some panel members called for more study to see how drug abusers would actually use it.
"We have no idea what this drug would do in all sorts of people," said Dr. Sidney Wolfe, head of Public Citizen's Health Research Group, a consumer group.
Pain Therapeutics, which has no FDA-approved products on the market now, would receive 15 percent royalties from Remoxy sales if it is cleared. King would handle marketing.
The drug is "a first step in developing an innovative medicine designed to strike a balance between the need for effective pain control and the need to minimize risks" with current options, James Green, a King executive vice president, said in a statement.
The FDA usually follows panel recommendations when deciding whether to approve new drugs. A decision is due by Dec. 10.
King is seeking to expand its pain management franchise by making a hostile bid to buy Alpharma Inc (ALO) for about $1.6 billion. On Friday, an FDA panel will consider Alpharma's experimental painkiller, Embeda, on Friday.‹
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