Abbott leads the biotech wave
It's been a busy few months for biotechnology and pharmaceuticals deals. Since Nov. 24, four mergers in the sector have been announced in what may be the start of a wave of deals between cash-rich and product-hungry drug companies and smaller rivals that can offer drugs or devices but need money.
In the largest of those deals, Abbott Laboratories agreed to pay $2.8 billion in cash and stock for Advanced Medical Optics Inc. on Jan. 12. The Santa Ana, Calif., target, which makes devices for cataract surgery and laser vision correction, used a team led by Brian McCarthy at Skadden, Arps, Slate, Meagher & Flom LLP in Los Angeles for legal advice and Goldman, Sachs & Co.'s Ken Hitchner, Charles Adams and Matt Korenberg for financial advice. AMO also got a fairness opinion from UBS Securities LLC, where Michael Robinson, Robert Steininger and Christina Bresani worked on the deal.
AMO has used Skadden's McCarthy since Botox maker Allergan Inc. spun the company out in 2002. The law firm has worked on several large deals for AMO, including its $450 million purchase of Pfizer Inc.'s surgical ophthalmology business and its $1.2 billion acquisition of Visx Inc. in 2004, as well as its $808 million purchase of IntraLase Corp. in 2007 and a failed $5 billion hostile bid for larger rival Bausch & Lomb Inc. the same year. AMO tapped Goldman on both IntraLase and Bausch & Lomb, with UBS working on the former as well.
Skadden's Chicago office has close ties to Abbott Labs, having represented the company on the $8.13 billion sale of its diagnostics business to General Electric Co. in 2007 and its $1.2 billion purchase of TheraSense Inc. in 2004. But with Skadden on the target side, Abbott tapped Elizabeth Kitslaar of Jones Day in Chicago, who represented Abbott on its $6.9 billion purchase of Knoll Pharmaceuticals AG from BASF AG in 2001. For banking advice, Abbott used Michael Boublik and Clint Gartin of Morgan Stanley, which advised Abbott on the TheraSense deal and on its failed effort to buy Alza Corp. in 1999, a transaction that antitrust regulators killed, among other assignments.
McCarthy isn't the only Skadden lawyer to sign up a biotech deal this month. Eileen Nugent, Ann Beth Stebbins, David Rievman and Peter Cohen in the firm's New York office represented Endo Pharmaceuticals Holdings Inc. on its $637 million agreement to acquire Lexington, Mass., biotech company Indevus Pharmaceuticals Inc. Nugent has worked for Endo since 1997, when three executives of a joint venture between E.I. du Pont de Nemours and Co. and Merck & Co. acquired some of the JV's product lines with backing from private equity shop Kelso & Co. Nugent handled Endo's 2000 acquisition of Algos Pharmaceutical Corp., a deal that enabled the buyer to go public by taking over the target's Nasdaq listing. Current Endo general counsel Caroline Manogue worked on the transaction as a Skadden associate and then went in-house at Endo. For banking advice Endo tapped Peter Crnkovich, Jeremy Gelber and Jessica Chutter at Morgan Stanley, which used Keith Pagnani at Sullivan & Cromwell LLP.
Skadden and UBS represented Indevus on its 2007 purchase of Valera Pharmaceuticals Inc. for $120 million. On the Endo deal, Indevus turned to UBS again and for legal advice tapped Josef Volman at Burns & Levinson LLP in Boston.
On Dec. 1, Johnson & Johnson agreed to pay $1.12 billion for breast implant maker Mentor Corp. J&J went without a banker and used Damien Zoubek and Eric Hilfers at counsel Cravath, Swaine & Moore LLP, with Steve Newborn and John Sipple Jr. at Weil, Gotshal & Manges LLP on antitrust and Jones Day's Jonathan Stevens on tax.
Mentor used Scott Stanton, Steve Rowles and Michael O'Bryan at Morrison & Foerster LLP with Vikram Bhardwaj, Wes Walraven and Ralph Watts at Citigroup Inc. on the banking side. Citi teamed with Goldman to advise Santa Barbara, Calif.-based Mentor on a failed 2005 hostile bid for Medicis Pharmaceutical Corp. Mentor used Martin Korman from Wilson Sonsini Goodrich & Rosati PC and Barton Winokur from Dechert LLP as legal counsel on the bid. Stanton may have gotten the nod because of his relationship with Mentor general counsel Joseph Newcomb, who as the general counsel at Inamed Corp. used Stanton on Inamed's $3.2 billion sale to Allergan.
In a deal announced the Monday before Thanksgiving and closed Dec. 30, King Pharmaceuticals Inc. acquired Alpharma Inc. for $1.4 billion. King used Chang-Do Gong, Morton Pierce and Ivan Presant at Dewey & LeBoeuf LLP with D. Scott Lindsay, Martin Friedman and Charlie Attlan of Credit Suisse Group and Doug Brown and J. Stuart White III of Wachovia Securities providing financial advice.
Alpharma used William Dougherty and Mario Ponce of Simpson Thacher & Bartlett LLP and Paul Donofrio, Matthew Miller and David Glaser of Banc of America Securities LLC. Alpharma general counsel Thomas Spellman was an associate at Simpson before going in-house at Warner-Lambert Co., Johnson & Johnson and then Alpharma. At J&J, he used Cravath and continued to do so at Alpharma, but that firm had previously represented King and so was conflicted out of defending Alpharma against King's bid.