Featured companies: Cerus, LabNow, Reliant Pharmaceuticals
UPDATED: Expanded items on Reliant Pharmaceuticals and Cerus.
GSK acquires Reliant Pharma for $1.65 billion -- And then there were none. Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that filed for an initial offering back in August, has instead decided to sell itself to GlaxoSmithKline for the eye-popping sum of $1.65 billion. The release is here. The acquisition news comes just days after doppelganger Reliant Technologies abandoned its own IPO bid (see our coverage here).
Although that sum is pretty large, it's a mere 18 percent premium over the $1.4 billion market capitalization Reliant Pharma would have fetched had it priced at the top of its expected per-share range at $27. As we noted earlier -- see our previous coverage here and here -- Reliant is kind of a mixed bag insofar as specialty pharma companies go. It yanked an earlier attempt to go public back in 2005, and remains unprofitable despite pulling down $360 million in revenue for the first nine months of this year.
Reliant sells four unrelated cardiovascular drugs, the most significant of which is Lovaza, an omega-3 fatty-acid pill for people with high levels of triglycerides. Although GSK touts it as the only omega-3 supplement "clinically proven" to reduce triglyceride levels in adults with high triglycerides, it's kind of hard to imagine that this really sets it apart from all the other omega-3 supplements you can find on the shelves of your local drugstore or supermarket. (Here at Chez Hamilton, we take the Costco house brand fish-oil supplement, which is plenty high in omega-3s, even if it hasn't been "clinically proven" to reduce triglycerides. For Reliant's song-and-dance as to why Lovaza is superior to fish-oil supplements, click here.) Yet Lovaza is exactly what GSK touts as its reason for dumping a billion-plus bucks of its shareholders' money on this company.
Don't think that Reliant has a secret weapon in its labs, either --because, you know, Reliant doesn't really have labs. Like most specialty pharmas, it's a bottom-feeder, acquiring drugs that no one else wants or can find a good use for. That can be a perfectly good business, and there's no question that Reliant's shareholders have done well in this transaction, but no one should mistake what companies like Reliant do for actual innovation. As for why GSK thinks this company is so valuable -- well, chalk it up to desperation and the madness of crowds.
Cerus spins out venture-backed immunotherapy unit -- Concord, Calif.-based Cerus is spinning off its cancer-vaccine program into a new, and as-yet unnamed, venture-backed company. The release is here.
Cerus will focus its own efforts on its Intercept blood-safety system, which theoretically neutralizes viral and bacterial pathogens in donated blood using a small molecule that binds to DNA or RNA and "cross-links" the molecules, rendering them incapable of replication. Intercept has had tough sledding in the U.S., but is approved in Europe.
Cerus didn't identify backers of the new immunotherapy company, although it said David Cook and Thomas Dubensky have joined it as CEO and chief scientific officer, respectively. Cerus will retain a 16 percent interest in the new company, and is eligible for milestone payments of more than $90 million, plus royalties, should any of the new company's vaccines pay off.
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