Trophogen, Inc.

November 18, 2015 By Mark Terry , BioSpace.com Breaking News Staff With a probable Pfizer - Allergan merger announcement expected next week, activist investor Dan Loeb threw a wrench into the gears, tossing out the idea of a merger between Amgen and Allergan . Loeb is the founder of Third Point hedge fund and holds a stake in both companies. Speaking at the Robin Hood Investors Conference in New York yesterday, a closed event, several insiders who were there told Bloomberg that Loeb “spent most of the presentation praising Allergan , which he compared to a baby thrown out with the bathwater during a sell-off in healthcare stocks in August and September.” It’s not exactly a new area of speculation. Just last week The Financial Times, quoting inside sources, reported that Amgen , headquartered in Thousand Oaks, Calif., might be in the market to buy a company, potentially in the $10 billion range. That time, focus was on Amgen acquiring Cambridge, Mass.-based Alnylam Pharmaceuticals . Other potential targets cited have been Seattle Genetics, Inc. , Dr. Reddy’s Laboratories Ltd. , and Aspen Pharmacare Ltd. Back in January, there was speculation that Paris-based Sanofi SA was also looking at Alnylam . A year ago, in October 2014, Loeb was urging Amgen to break up into two companies, dubbing them GrowthCo and MatureCo. GrowthCo would focus on research and development of newer, faster-growing drugs, while MatureCo would focus on slower-growth, mature products. Interestingly, there’s quite a bit of speculation that if the Pfizer-Allergan deal did come together, it would only be a year or so before the mega-company split into two, one for mature drugs, the other for the research-and-development-based faster growing drugs. Amgen does have a problem. Primarily it revolves around biosimilar competition and the lost off patent protection. On March 6, the U.S. Food and Drug Administration (FDA) approved the first biosimilar, Novartis AG ’s Zarxio, a biosimilar of Amgen ’s Neupogen. In October, Amgen ’s Neulasta lost its U.S. patent protection, and its European patent ends in 2017. The company’s Epogen lost patent protection in 2014. According to U.S. Securities and Exchange Commission (SEC) filing, Third Point increased its stake in both Amgen and Allergan in the third quarter. As of September 30, Amgen is Third Point ’s second-largest investment and Allergan is it’s third largest. Loeb, as reported by Bloomberg, said a merger between the two would lead to strong growth and have multiple cost synergies. One of the reasons Loeb was calling for a split last year had to do with Amgen ’s acquisition of Onyx Pharmaceuticals, Inc. in 2013. As part of that buy, it acquired Kyprolis . Initially Kyprolis was slow to gain traction in the market, but in this year’s third quarter, the drug showed a 46 percent year-over-year sales increase. This rather undercut Loeb’s argument and gave Amgen a reason to jump back into the merger-and-acquisition market that’s been so active this year. So will an Allergan-Amgen merger happen? It seems unlikely, with the Allergan-Pfizer talks so active recently. If those were to fall apart or if Amgen were to make a competitive bid, it’s possible, although insiders are indicating that the Pfizer merger is completely dependent on Allergan ’s Brent Saunders taking over as chief executive officer. Loeb apparently also said an Allergan-Pfizer deal makes sense, and from a tax point of view it seems completely beneficial to Pfizer , which would be able to shift its tax domicile to low-corporate-tax country Ireland. Investors seemed to like the idea, with Amgen bumping up from $151.55 per share on Friday, Nov. 13, to a current share price of $158.49. Loeb’s comments aren’t necessary the source of the increase, however. Shares traded on Sept. 28 for $132.24, then jumped to $161.88 on Nov. 4. This year’s high was on July 31, when shares traded for $176.59.

November 10, 2015 By Mark Terry , BioSpace.com Breaking News Staff After yesterday’s report that Thousand Oaks, Calif.-based Amgen might be considering a big acquisition, today analysts are speculating on possible targets. An unnamed source, presumably a company insider or top investor with inside information, told The Financial Times that Amgen was considering acquisition targets in the $10 billion range. Amgen has mostly avoided large acquisitions since its Onyx Pharmaceuticals, Inc. purchase in 2013 for about $10 billion. In that deal, Amgen also acquired the rights to Kyprolis, a cancer drug, but the drug’s initial sales were slow, causing dissent among investors. In October 2014, activist hedge fund manager Daniel Loeb , of Third Point , urged Amgen to break up into two companies, nicknaming them GrowthCo and MatureCo. GrowthCo would focus on research and development of newer, faster-growing companies, while MatureCo would focus on slower-growth, mature products. Loeb apparently wasn’t the first person to suggest such a move, acknowledging that Geoffrey Porges , an analyst at Sanford C. Bernstein had suggested it earlier. Clearly this was ignored by Amgen . As noted by Hannah Ishmael with BidnessEtc, Amgen announced ambitious revenue targets late last year, promising to up operating margin by 15 points to 52 to 54 percent and deliver $1.5 billion in yearly cost savings by 2018. Also, Kyprolis gained traction in the market, delivering 46 percent year-over-year and 15 percent sequential increase in third-quarter sales to $137 million. It also received expanded approval in early 2015 for treatment of multiple myeloma. It also is expected to receive more approvals, particularly in combination cocktail treatments. So, if Amgen is considering a major acquisition, who’s the likely target? Ishmael cites four companies: Seattle Genetics, Inc. , Alnylam Pharmaceuticals , Dr. Reddy’s Laboratories Ltd. , or Aspen Pharmacare HLD (APNHF) . Seattle Genetics, Inc. markets Adcetris, a drug for two types of lymphoma, and is currently being analyzed in over 30 clinical trials for other lymphomas. The company also has another six similar drugs in clinical-stage development. Alnylam Pharmaceuticals, Inc. focuses on treatments using its ribonucleic acid interference (RNAi) platform. Marko Kozul , an analyst with Leerink Partners , projects the company could hit almost $1 billion in sales by 2020 based on its pipeline of products for rare diseases. There are rumors in January 2015 that Alnylam was an acquisition target of Paris-based Sanofi SA . Dr. Reddy’s Laboratories Ltd. is based in India and is the country’s second-largest drug company. It is active in the generics market, focused on gastrointestinal diseases, cardiovascular diseases, pain management, cancer, dermatology and pediatrics. Aspen Pharmacare HLD is headquartered in KwaZulu-Natal, South Africa, and is the largest drug company in Africa. It too is strong in the generics market and has international reach. The generics business has been very active this year in the mergers and acquisitions market. Israel-based Teva Pharmaceutical Industries Ltd. acquired Allergan plc ’s generic drug business for $40.5 billion in late July. Philadelphia-based Lannett Company, Inc. announced in September that it was buying Kremers Urban Pharmaceuticals Inc. for $1.23 billion. Kremers Urban is the U.S.-based specialty generic pharmaceuticals subsidiary of Belgium-based UCB S.A. In July Jordan-Hikma Pharmaceuticsl (HIK.L) bought Boehringer Ingelheim ’s U.S. generic drugs unit for $2.65 billion. In May, Endo Pharmaceuticals Plc bought Par Pharmaceutical Holdings Inc. for $8.05 billion, making it among the top five generic drug companies in the U.S. Amgen is also facing or has already had to deal with drugs losing patent protection, as well as biosimilar competition. On March 6, the U.S. Food and Drug Administration (FDA) approved the first biosimilar, Novartis AG ’s Zarxio, a biosimilar of Amgen ’s Neupogen. Amgen ’s Neulasta lost its U.S. patent last month, and its European patent ends in 2017. The company’s Epogen lost patent protection in 2014. Much of the patent-cliff problems revolve around Amgen ’s cancer drugs, so it’s possible it will look to acquire a company that will help bolster its oncology market presence.

October 22, 2014 By Mark Terry , BioSpace.com Breaking News Staff Activist hedge fund Third Point called on biotech Amgen to split into two companies in a letter yesterday to company shareholders, as the fund continued to press Amgen , in which it has a significant stake, to increase its value. Third Point , founded by Dan Loeb , holds 450,000 shares of Amgen , according to the hedge fund’s last SEC filing. At a recent Robin Hood Investors Conference Loeb indicated he thought Amgen shares could be worth $249, which is 80 percent higher than they are now. “ Amgen has all the hallmarks of a hidden value situation,” said New York-based Third Point letter. “The company does not receive proper credit from investors for either the cash-generative potential of its mature products or the coming financial impact of its growth assets.” Thousand Oaks, Calif.-based Amgen , founded in 1980, focuses on developing therapies for anemia, arthritis, kidney disease and bone disease. In 2013 the company reported $18.7 billion in revenue and a market capitalization of almost $110 billion. In 2013 Amgen acquired Onyx Pharmaceuticals Inc. for more than $10 billion, which markets the blood cancer compound Kyprolis. Amgen has several brand name drugs including Aranesp, Enbrel, EPOGEN and Neulasta. The Third Point letter offers a complete analysis of what the hedge fund’s analysts feel are undervaluing the company’s stock. It cites: “1) its historical lack of R&D productivity; 2) more than a decade of flat operating margins; and 3) the suspension of its share repurchase program in 2013 following its $9 billion acquisition of Onyx Pharmaceuticals .” The letter then goes on to say, “We believe that Amgen management can directly address all three sources of legitimate investor frustration and, based on our discussions to date with management, we believe that they will. While we applauded Amgen ’s first steps in July to target the company’s inflated cost structure by rationalizing its US facilities footprint and creating centers of R&D excellence in San Francisco and Boston, we believe much more can and should be done.” After providing suggesting such as focusing its R&D efforts, the letter then goes on to drop its more radical option of splitting into two separate companies and/or business units. One of the companies would focus on Amgen ’s mature products and the other company would focus on its research-and-development-intensive growth products. “Internally,” the letter stated, “each business would have different priorities: MatureCo would focus on efficiency and cash flow, while GrowthCo would emphasize product development and innovation.” The biotech company responded with an open mind. “ Amgen maintains an active, engaged dialogue with all shareholders,” Amgen indicated in a press release . “ Amgen has always appreciated the perspectives of all of its shareholders, including Third Point , and welcomes constructive input toward our common goal of enhancing shareholder value. Amgen ’s Board of Directors frequently receives input from shareholders, including ideas like those offered by Third Point .” var switchTo5x=true; stLight.options({publisher: "0341611e-38a4-415d-9e18-75e093ff27e0", doNotHash: false, doNotCopy: false, hashAddressBar: false});