Cooley Closes 2nd Life Sciences Deal In 2 Days (Law360)

By Liz Hoffman

Cooley LLP has closed its second sell-side pharmaceutical deal of the week, representing Presidio Pharmaceuticals Inc. in its $101 million acquisition by BioCryst Pharmaceutical Inc., announced Thursday.

That follows Tuesday's announcement that the California-based firm, whose mergers and acquisitions practice has a strong bent toward life sciences and technology, advised Surpass Medical Ltd. in its acquisition by Stryker Corp. for $135 million.

In Thursday's deal, BioCryst will issue 24.5 million shares, valued at $4.11 apiece at Wednesday's close, for privately held Presidio to team up on treatments for hepatitis C and hereditary angioedema, a rare immune system disorder. Presidio has two experimental hepatitis drugs preparing to enter early-stage trials as soon as next year.

"Presidio brings exciting [hepatitis C] assets to the new company, and a highly experienced scientific team with a proven track record in antiviral drug discovery and development," said BioCryst chief executive Jon Stonehouse, who will stay CEO of the combined company.

"The diversity of our ... portfolio reduces our clinical development risk and defines this new company as a serious competitor in the development of orally administered, safe and effective combination therapies for hepatitis C," he added.

In the near term, BioCryst's flu and gout treatments, both in late-stage development, will provide cash to fund hepatitis and hereditary angioedema research, the company said.

The deal has been approved by both boards and is expected to close in early 2013, pending approval from BioCryst's shareholders. It requires a minimum of $60 million equity financing at close, $25 million of which will come from cash committed by Presidio's existing shareholders, which include venture capital firm Panorama Capital LLC, hedge fund Baker Brothers Investments and a handful of California tech investors.

BioCryst will hold six board seats in the new company, which will launch with a new name and ticker symbol at closing. Presidio will hold three. Kenneth Galbraith, a general partner at Presidio backer Ventures West Capital Ltd., will be the board chair, while BioCryst's Stonehouse will take the CEO slot.

In the earlier deal, Cooley repped Surpass, an Israeli maker of stents and other brain surgery devices, in its all-cash acquisition by Stryker Corp. Stryker will pay $100 million in cash, with a possible $35 million in milestone payments, the companies said.

Surpass is launching late-stage trials later this year for its key product, which directs blood flow away from a brain aneurysm.

Stryker said the deal, which is expected to close before the end of the year, would be neutral to its 2012 earnings per share. The company has been expanding its neurotechonology unit. In 2010, it bought the neurovascular unit of Boston Scientific Corp. for $1.5 billion and followed up last year with the $135 million acquisition of Concentric Medical Inc., which also focuses on stroke care. And more could be ahead; as of June 30, the company was sitting on a $1.4 billion cash pile.

"Overall, we are excited about the opportunity to use the strength of our balance sheet to continue to make targeted acquisitions that we believe will help drive accelerating core revenue growth," Katherine A. Owen, Stryker's vice president of strategy, said in a conference call this week.

Cooley's M&A strength lies in its life sciences and tech team, which has carved out a particular niche representing sellers and target companies. Recent deals include representing Micromet Inc., a cancer researcher, in its $1.2 billion sale to Amgen Inc. in January, and diagnostics lab Genoptix Inc. in its $470 million acquisition by Novartis AG last year.

BioCryst was represented by Wachtell Lipton Rosen & Katz, led by Mark Gordon, Lisa B. Schwartz and Eitan S. Hoenig (corporate), with assistance from Jeremy L. Goldstein (executive compensation) and Deborah L. Paul and associate Michael Sabbah (tax.)

Presidio was represented by Cooley LLP, led by Mark Weeks with assistance from Natasha Leskovsek, Craig Menden and Mark Windfeld-Hansen (business) and Renee Deming (employee benefits).

Surpass Medical was also represented by Weeks, Leskovsek and Windfeld-Hansen, as well as Laura Medina and Scott Talbot (intellectual property), also of Cooley LLP.

Counsel for Stryker was not immediately available. A spokeswoman for the company did not respond to requests for comment.

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Related Contacts
Laura M. Medina Partner Colorado
Scott Talbot Partner Reston
Natasha Leskovsek Of Counsel Washington, DC
Mark Weeks Partner Palo Alto
Renee Deming Retired Partner Palo Alto
Mark Windfeld-Hansen Partner Palo Alto
Related Practices & Industries

Mergers & Acquisitions