ANDS Anadys Pharmaceuticals (MM)

Roche Holdings Ltd. (RHHBY) recently announced that it has entered into a definitive merger agreement with Anadys Pharmaceuticals Inc. (ANDS). By virtue of this agreement, Roche will acquire all the shares of Anadys at $3.70 per share, bringing the total consideration price to $230 million. The transaction is expected to close within this year.

We note that the acquisition of Anadys will augment Roche’s hepatitis C virus (HCV) portfolio, with Anadys’ lead pipeline candidate -- setrobuvir (ANA598). Setrobuvir, which is currently in mid-stage trials, is being studied in combination with Roche’s pegylated interferon (Pegasys) and ribavirin (Copegus).

Anadys is also developing ANA773, an oral, small-molecule inducer of innate immunity, currently in early-stage trials, which might be used for treating HCV as well as other chronic infections and cancer.

We note that Roche has been busy acquiring companies and signing new deals. Last month, the company entered into a worldwide agreement with Evotec AG (EVTCY) for the development and commercialization of the latter’s candidate EVT 302, which is being studied for the treatment of Alzheimer's disease (AD).

Under the agreement, Roche will be responsible for all clinical development, manufacturing and commercialization activities of the candidate. The company plans to initiate proof of concept studies of EVT 302 in 2012.

In July, Roche and Merck & Co. Inc. (MRK) inked a worldwide non-exclusive agreement to market the triple combination therapy, which includes Merck’s Victrelis (boceprevir), peginterferon alfa and ribavirin. The combination drug is targeted at treating HCV. According to the agreement, Roche and Merck will work together worldwide and educate physicians and patients about HCV.

Further, in June, Roche had entered into collaboration with Evotec for the development of oncology drugs. Under the agreement, Evotec will use its PhosphoScout platform to discover protein-phosphorylations, which will help in predicting favorable dosage and efficacy of targeted cancer drugs in patients. Furthermore, Roche will conduct clinical trials and evaluate the development of companion diagnostics for the purpose of patient stratification.

Initially, for three years, Roche and Evotec will conduct multiple biomarker studies for therapeutic antibodies or small molecule inhibitors.

In early June, Roche entered into a licensing agreement with TeaRx Ltd., wherein it granted TeaRx the development and commercialization rights to treatments for patients at risk of thrombosis in Russia and 12 other countries. TeaRx plans to initiate clinical studies with the candidates in 2012. Roche will make an investment in the form of manufacturing the active pharmaceutical ingredient (API) for early-stage studies.

Roche also announced a collaboration with Bristol-Myers Squibb Co. (BMY) in June, for the development of a combination drug involving Roche’s vemurafenib and Bristol-Myers’ ipilimumab to treat patients with BRAF-mutated metastatic melanoma (skin cancer).

According to the agreement, the companies will conduct a phase I/II study to determine the safety and efficacy of the combination drug. On the basis of the trial results, Roche and Bristol-Myers will decide on the further development of the drug.

We currently have a Zacks #3 Rank (short-term Hold rating) on Roche.

 
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