West Coast Editor

Mixed news about a month ago from trials with its drug for hereditary angioedema (HAE) failed to reduce the takeover appeal of Kos Pharmaceuticals Inc. for Abbott Laboratories, which plans to buy the specialty pharma firm for $78 per share, a 56 percent premium to Kos' Friday closing price of $50.09.

News of the deal, valued at $3.7 billion net of cash held by Kos, boosted shares nearer to the merger price, and Kos' stock (NASDAQ:KOSP) closed Monday at $77.06, up $26.97, or 53.8 percent.

It's all - or mostly - about lipid management,

"We already have some presence in that market, but this really expands the amount of segments we can target," noted Jonathon Hamilton, spokesman for Abbott Park, Ill.-based Abbott, which gets from Kos the marketed products Niaspan, an extended-release niacin product that raises levels of high-density lipoprotein, and Advicor, a combination of Niaspan and lovastatin for patients with multiple lipid disorders.

A new Niaspan caplet with a range of dosages awaits action by the FDA, and Kos expects to submit Simcor for approval in the first half of next year. Simcor is a fixed-dose combination of Niaspan and simvastatin (the generic version of Zocor, from Whitehouse Station, N.J.-based Merck & Co. Inc.) for treating lipid disorders.

Mark Taylor, analyst with Roth Capital Partners, wrote in a research report last month that Kos' management "in short order has built a substantial pharmaceutical company by attacking right at the soul of Big Pharma: the enormous cardiovascular market." Doctors write 209 million prescriptions per year for dyslipidemia drugs, and the sector is growing at a rate of 12 percent annually.

For the $20 billion lipid management market, Abbott already sells TriCor (fenofibrate), and is working on a next-generation fenofibrate, ABT-335. With London-based AstraZeneca plc, Abbott has a development program to develop a single-pill, fixed-dose combination therapy of either TriCor or ABT-335 with Crestor (rosuvastatin), AstraZeneca's anti-cholesterol pill.

Kos faces competition from Merck in the lipid zone, but gained a leg up in September when Merck delayed seeking approval for a triple-combo drug that combines niacin, Zocor, and a third ingredient to raise high-density lipoprotein.

Also in development at Kos is the asthma treatment Flutiform, in-licensed from SkyePharma plc, of London, in a potential $165 million deal, with $25 million up front, and an inhaled insulin product. (See BioWorld Today, May 9, 2006.)

Not mentioned in Abbott's press release about the buyout is Icatibant, the synthetic peptidomimetic from Kos and Berlin-based Jerini AG, which in September missed its primary endpoints in one Phase III trial, but hit the primary endpoint in another. Analysts predicted the companies will need to conduct another study. (See BioWorld Today, Sept. 25, 2006.)

Earlier the same month, would-be competitors Dyax Corp. and partner Genzyme Corp., both of Cambridge, Mass., heard from the FDA that another, confirmatory Phase III trial also will be needed for their HAE candidate, DX-88, a kallikrein inhibitor, which would delay launch until the second half of 2008. (See BioWorld Today, Sept. 5, 2006.)

"We're certainly aware of Icatibant," Hamilton said, though the lipid-management drugs, along with the asthma and insulin products, made up much of the draw for Abbott. "I don't know that I would break [the drugs' values to Abbott] down into percentages," he added.

The deal will close after shareholder approval and the customary conditions, Hamilton said, declining to provide a time frame. Whether all of Kos' employees will be retained is undecided.

"We're going to put together an integration team and figure out the details," he said.

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