Cold Remedy: Am Law 100 Firms Load Up on Pharma M&A
Pharmaceutical M&A got a late-year shot in the arm, with nearly $10 billion in deals being announced involving major industry players like AstraZeneca and Bayer as 2013 came to a close. A bevy of Am Law 100 firms have picked up key advisory roles on the transactions.
Covington & Burling, which represented Salix Pharmaceuticals last month on the company's $2.6 billion bid for gastrointestinal drug maker Santarus, is now advising AstraZeneca in connection with its agreement to pay up to $4.1 billion to Bristol-Myers Squibb for a stake in an alliance to jointly develop diabetes drugs.
Catherine Dargan, cochair of Covington’s M&A practice and a member of its management committee, is leading a team from the firm advising AstraZeneca on the matter. Covington advised the London-based pharmaceutical giant last year on its nearly $1.3 billion acquisition of Ardea Biosciences and took the lead for AstraZeneca’s biologics research arm, MedImmune, in October on its $440 million purchase of privately held biotechnology company Spirogen. Covington corporate and life sciences transactions partners Stephen Infante and Amy Toro took the lead for MedImmune on that deal, and both are also part of the team advising AstraZeneca on the agreement announced last week with Bristol-Myers.
Other Covington lawyers working on the Bristol-Myers deal include corporate and life sciences of counsel Edward Dixon, IP and life sciences partner Lucinda Osborne, antitrust vice chair James Dean Jr., antitrust partner Miranda Cole, regulatory partners Michael Labson and Grant Castle, labor and employment partners Christopher Walter and Robert Newman, corporate special counsel Scott Roades and associates Larry Bartenev, Robin Blaney, Sarah Griffiths, Magdalina Gugucheva, Christopher Hartsfield, Bud Jerke, James Toy and James Wawrzyniak Jr.
Davis Polk & Wardwell tax partners Neil Barr and Jonathan Cooklin are serving as U.S. and U.K. tax counsel to AstraZeneca along with counsel Gregory Hannibal and associates Dominic Foulkes and Isaac MacDonald. Cooklin joined Davis Polk last year from Magic Circle firm Freshfields Bruckhaus Deringer.
AstraZeneca, which had at one point tamped down its dealmaking endeavors to focus on research and development, shuffled its management ranks earlier this year. The company turned to Greenberg Taurig’s U.K. arm Greenberg Traurig Maher in the wake of the shakeup for counsel on its $1.15 billion acquisition over the summer of Pearl Therapeutics, according to our previous reports.
Jeffrey Pott has served as AstraZeneca's general counsel since 2009, while Swedish lawyer Katarina Ageborg is the company's chief compliance officer. Another attorney, Lynn Tetrault, heads the drug maker's human resources and corporate affairs departments.
U.S. Senate records show that AstraZeneca, like many pharmaceuticals companies, maintains an active lobbying presence on Capitol Hill. The company has paid $240,000 and $150,000 through the third quarter of this year to Washington, D.C.’s Williams & Jensen and Tarplin, Downs & Young, respectively, for lobbying work on prescription drug benefits and U.S. Food and Drug Administration issues. (Tarplin Downs is a three-woman health care shop formed in 2006, according to sibling publication Legal Times.)
Bristol-Myers, which Senate records show has paid $190,000 so far this year to lobbying powerhouse Patton Boggs, has turned to Kirkland & Ellis for counsel on the sale of its global diabetes business to AstraZeneca.
Kirkland corporate partners Sean Rodgers and Joshua Zachariah are leading a team advising New York–based Bristol-Myers. Corporate partners David Fox, Daniel Wolf, Patrick Huard and associates Patrick Jacobs and Danielle Quinn also have roles in the matter.
Bristol-Myers has increasingly turned to Kirkland for high-end corporate work, tapping the firm earlier this year for counsel on the company's $482 million pact with Reckitt Benckiser Group for the rights to a portfolio of Latin American medicines, as well as its $7 billion acquisition last year of San Diego–based Amylin Pharmaceuticals. Kirkland also advised Bristol-Myers on its $2.5 billion buy of Inhibitex in 2011, according to our previous reports.
Former Covington of counsel Togo West Jr. is a member of Bristol-Myers’ board of directors, which until earlier this year included former FBI director Louis Freeh, now chairman of Pepper Hamilton. Sandra Leung is Bristol-Myers’ general counsel.
Fried, Frank, Harris, Shriver & Jacobson corporate partner Philip Richter is serving as counsel to Goldman Sachs, financial adviser to Bristol-Myers on the AstraZeneca deal. The transaction's terms call for AstraZeneca to pay $2.7 billion upfront to Bristol-Myers, with the ultimate value of the deal postential rising to $4.1 billion once certain regulatory and royalty benchmarks are met.
Kirkland's high-flying transactional practice has been busy in recent weeks snagging lead roles on a handful of other pharmaceutical and medical industry deals.
Fox and Wolf, who joined Kirkland in a high-profile lateral move from Skadden, Arps, Slate, Meagher & Flom in May 2009, advised Israeli medical technology company Given Imaging this month on its $860 million sale to Irish medical devices manufacturer Covidien. The deal will bolster Covidien's gastrointestinal diagnostics business.
Other Kirkland lawyers advising Given Imaging include M&A partner Yi Claire Sheng, tax partner Scott Price, antitrust partner Mark Kovner and associate Daniel Tavakoli. Ido Warshavski serves as Given Imaging’s general counsel. Covidien, whose general counsel is John Masterson, turned to leading Israeli firm Meitar Liquornik Geva Leshem Tal for outside counsel on the deal, which is expected to close by March.
Kirkland M&A partners Srinivas Kaushik in New York and Pierre-Luc Arsenault in Hong Kong took the lead earlier this month for private equity firm Bain Capital on its acquisition of a stake in India’s Emcure Pharmaceuticals being sold by private equity rival The Blackstone Group. (Berjis Desai, managing partner of leading Indian firm J. Sagar Associates, is a member of Emcure’s board.)
Crealta Pharmaceuticals, a portfolio company of longtime Chicago-based Kirkland private equity client GTCR, also turned to the firm for counsel on its $120.4 million acquisition of assets from Savient Pharmaceuticals, which filed for bankruptcy in October. (Crealta’s general counsel is former Kirkland partner Edward Donovan.)
Skadden, which has been advising Savient in Chapter 11 proceedings, advised the Lake Forest, Ill.–based company on its sale of assets to Crealta through M&A partner Graham Robinson and corporate restructuring cohead Kenneth Ziman. (Robinson joined Skadden last year from Wilmer Cutler Pickering Hale and Dorr.)
Other Skadden lawyers advising Savient include restructuring partner David Turetsky and Anthony Clark, employee benefits partner Erica Schohn, banking partner Steven Messina, tax partner Katherine Bristor and associates Ebba Gebisa, Laura Knoll, Jennifer Kamocsay and Raquelle Kaye.
Skadden also teamed with top Norwegian firm Wikborg Rein & Co. last week to advise Oslo-based cancer drug maker Algeta on its $2.9 billion sale to German drug giant Bayer. The two companies have spent the past four years jointly developing prostate cancer treatment drug Xofigo, which was approved by the FDA earlier this year. (Former Mintz, Levin, Cohn, Ferris, Glovsky and Popeo associate Jeffrey Albers was named the head of Algeta’s U.S. unit last year.)
Sullivan & Cromwell M&A partner Matthew Hurd and associate Zachary Jacobs are advising Bayer on the deal. The company, a longtime S&C client, raised its bid for Algeta this month and the target company's board has unanimously recommended that shareholders approve the offer. The deal should be finalized by the first quarter of 2014.
Elsewhere, S&C and Dechert advised CVS Caremark, the largest supplier of prescription drugs in the U.S., earlier this month on the creation of a generic drug sourcing joint venture with pharmaceutical distributor Cardinal Health, which was counseled on the agreement by Wachtell, Lipton, Rosen & Katz. The deal, which seeks to create the country's largest generic drug supplier, comes on the heels of S&C’s role advising CVS Caremark on its $2.1 billion buy of Apria Healthcare Group’s Coram infusion therapy business, according to our previous reports.
For its part, Skadden has also been busy this month on the pharmaceutical and health care transactional front. The firm counseled longtime client Valeant Pharmaceuticals on its $236 million acquisition of Solta Medical—advised by Fenwick & West—to move into the skin rejuvenation and body contouring business. (Valeant’s general counsel is Robert Chai-Onn.)
Skadden also represented Endo Health Solutions this month on its $105 million buy of NuPathe, a specialty pharmaceutical firm whose offerings include a new migraine treatment. Morgan, Lewis & Bockius is advising NuPathe on the deal; the company’s general counsel, Michael Marino, once worked at the firm.
Brian Sisko, a former corporate partner at Philadelphia’s Klehr Harrison Harvey Branzburg, is a member of NuPathe’s board, while former Latham & Watkins partner Roger Kimmel serves as chairman of the board at Malvern, Pa.–based Endo Health. Caroline Manogue, a former Skadden associate, is the company’s general counsel.
In November, Skadden advised Endo Health on its $1.6 billion cash-and-stock acquisition of Canadian specialty drug company Paladin Labs in a deal that will create a new holding company based in Ireland designed to take advantage of the country’s lenient tax laws. As it happens, Skadden also snagged a key role this month on another cross-border pharmaceutical deal with similar tax implications.
In that transaction, Skadden and leading Italian firm Gianni, Origoni, Grippo, Cappelli & Partners, Skadden are advising Como, Italy–based rare disease drug developer Gentium on its $1 billion sale last week to Irish drug maker Jazz Pharmaceuticals.
Jazz, itself a potential takeover target due to Ireland’s lower tax rates, is being advised by a team of outside lawyers led by Weil, Gotshal & Manges, Baker & McKenzie, Cooley, Hogan Lovells and Italy’s Gattai, Minoli & Partners. Former Cooley partner Suzanne Hooper serves as Jazz’s general counsel.
Weil M&A partner Keith Flaum, named an Am Law Daily Dealmaker of the Week earlier this year for his work advising Applied Materials on its $9.3 billion acquisition of Tokyo Electron, is leading a team from the firm advising Jazz on its proposed purchase of Gentium.
Flaum, a former Cooley partner, left that firm in a high-profile lateral move for Dewey & Leboeuf in July 2009. As Dewey plunged into bankruptcy last year, Flaum and a group of Silicon Valley deal lawyers decamped for Weil. Two of the partners who joined Flaum in making the move to Weil—M&A experts Jane Ross and James Griffin—are part of the team now advising Jazz. Other Weil lawyers working on the deal include associates Rebecca Grapsas, Ade Heyliger, Megan Pendleton, Mandy Price, Amy Reed and Tyler Tassin. (Richard Climan, who led the group of Dewey defectors to Weil, grabbed a key role last week advising enterprise software giant Oracle on its $1.5 billion acquisition of Responsys.)
Weil, which this month advised San Francisco–based private equity firm Genstar Capital Management on its acquisition of orthopedic implant maker Tecomet, also took the lead for Danbury, Conn.–based ATMI on the company's $185 million sale of its life sciences business to Pall Corp. The in-house legal chiefs at Pall and ATMI are Roya Behnia and Patrick Shima, respectively.
Another pharmaceutical deal announced last week involves the sale of PharMEDium Services LLC, a pharmacy compounding services company owned by venture capital firm Oak Investment Partners, to private equity firm Clayton, Dubilier & Rice. While terms of the transaction were not disclosed, Reuters reported in November that PharMEDium was in discussions to sell itself for close to $1 billion. Debevoise & Plimpton is advising longtime client CDR on the acquisition, while PharMEDium has turned to K&L Gates. Oak Investment’s in-house head of legal affairs is Craig Lang.
Private equity giant KKR, meanwhile, announced in late November that it would invest $200 million in India’s Gland Pharma. The Financial Times reports the investment is one of the largest ever in the country’s export-oriented pharmaceutical sector. Simpson Thacher & Bartlett is advising longtime client KKR on the deal, along with leading Indian firm Amarchand & Mangaldas & Suresh A. Shroff & Co., according to sibling publication The Asian Lawyer. Legally India reports that top Indian firms AZB & Partners and Wadia Ghandy also had roles on the matter.
The end-of-year pharmaceutical sector M&A frenzy may not be over. Shortly before Christmas, Reuters reported that another major private equity player, The Carlyle Group, was in talks to acquire Johnson & Johnson’s blood-testing and diagnostics unit in a deal worth up to $4 billion.
While a transaction had not been formally announced as of Tuesday, it's worth noting that Carlyle turned to longtime outside counsel Latham two years ago to advise on its $3.9 billion buy with private equity rival Hellman & Friedman of contract drug researcher Pharmaceutical Product Development.