A Medical Device Daily Staff Report
Genzyme (Cambridge, Massachusetts) reported completing the transaction to buy back from Wyeth (Madison, New Jersey) the sales and marketing rights to Synvisc (hylan G-F 20) in the U.S. and five European countries (Germany, Poland, Greece, Portugal and the Czech Republic).
Genzyme will now record all Synvisc end-user revenue in the U.S. and the five European countries.
As part of the closing, Genzyme paid Wyeth $99 million in cash for the marketing rights to Synvisc in the U.S. and the five European countries. It will pay an additional $22 million to Wyeth during 1Q05 upon the final transition of the franchise.
In the future, Genzyme also will make a series of milestone payments to Wyeth based on the volume of Synvisc sales. The additional payments could extend out to June 2012, or total a maximum of $294 million, whichever comes first.
Synvisc is a leading viscosupplementation product for the treatment of pain due to osteoarthritis of the knee in the U.S. and Canada, and one of the top products in this category in Europe.
Ann Merrifield, president of Genzyme Biosurgery, the unit of Genzyme that manufactures Synvisc, said, “This is a strategic franchise for Genzyme and one of our key areas of growth and investment. Wyeth has positioned Synvisc well in the market and we now look forward to building on this success and realizing the full value of the product moving forward.“
Because it is delivered locally, Synvisc avoids some of the associated side effects of traditional non-steroidal anti-inflammatory drugs and COX-2 agents. It also is the only viscosupplement on the U.S. market that can provide up to six months of osteoarthritis knee pain relief with just three injections per treatment regimen, according to Genzyme. It has been used to treat more than 3 million patients.
Genzyme reported hiring Wyeth's 95-person, Synvisc- dedicated U.S. sales force and its 10 district sales managers. Genzyme also has a 36-person U.S. sales team that is dedicated to Synvisc and to Carticel (autologous cultured chondrocytes), a cell therapy product used to repair injuries to articular knee cartilage that have not responded adequately to prior treatment.
Synvisc relieves the pain of knee osteoarthritis that affects about 14 million people in the U.S. alone. It is the leader in the U.S. viscosupplementation market, with an estimated 65% share.
In the European Union and Canada, Synvisc also is approved for use in the hip, the second-largest indication for osteoarthritis, and Genzyme is currently treating patients in a U.S. clinical trial for the hip indication. Additional clinical trials for Synvisc in osteoarthritis of the shoulder and ankle also are under way in Europe.
Genzyme said it is “actively investing“ in the product and in osteoarthritis, “pursuing next generation formulations of Synvisc, and expanding clinical indications and geographical reach.“
In addition to the five European countries included in this transaction, Synvisc is already sold and distributed directly by Genzyme in the UK, France, Canada and Australia. Wyeth will continue to market and distribute Synvisc in Turkey under a new agreement with Genzyme. In all, Synvisc has an established base in more than 60 countries, with significant growth opportunities ahead.
In clinical trials, the most commonly reported adverse events were transient local pain, swelling, and/or effusion in the injected knee. In some cases, these symptoms have been extensive. Synvisc is contraindicated in patients with known hypersensitivity to hyaluronan products or patients with infections in or around the knee.
Genzyme said it plans to issue specific guidance related to Synvisc in its fourth-quarter earnings press release on Feb. 17.
Genzyme's product portfolio is focused on rare genetic disorders, renal disease, osteoarthritis, cancer and immune-mediated diseases, and includes an industry-leading array of diagnostic products and services and sophisticated biomaterials.
In another deal completion, The Cooper Companies (Lake Forest, California) reported the close of its merger with Ocular Sciences (Concord, California), the cash-and-stock transaction first unveiled last July (Medical Device Daily, July 30, 2004) and reportedly worth $1.2 billion.
Cooper paid about $600 million in cash and issued about 10.7 million shares of its common stock to Ocular Sciences' stockholders and option holders.
The closing came following the report of the Federal Trade Commission's termination, earlier in the week, of its merger review under the Hart-Scott-Rodino Act. Stockholders of each company approved the transaction on Nov. 16, 2004.
Ocular common shares represent the right to receive the merger consideration of 0.3879 of a share of Cooper common stock and $22 in cash.
“This acquisition is an ideal strategic fit for Cooper,“ said A. Thomas Bender, that company's CEO. “Ocular brings geographic and product line balance and manufacturing technology to our CooperVision business unit. We expect to nearly double our revenue base and enhance our cash flow and profitability.“
John Fruth, Ocular Sciences' founder and chairman, said, “Combining Cooper and Ocular Sciences is a strategic opportunity that immediately creates a company with significant scale and presence in all major markets around the world. The combined companies will offer our customers a wider choice of contact lens products for their patients.“ Fruth will join Cooper's board.
Cooper bills its CooperVision unit as the world's fourth-largest contact lens manufacturer. Ocular Sciences, the world's fifth-largest company in that sector, supplies primarily spherical and daily disposable contact lenses. With the completion of the merger, Cooper said that CooperVision “becomes the world's third-largest contact lens company.“
Cooper estimated 1Q05 revenue of between $149 million and $153 million and earnings per share of between 52 cents and 55 cents a share. CooperVision expects 1Q05 revenue of between $122 million and $125 million, and CooperSurgical expects revenue of between $26 million and $27 million for the same period.
The Cooper Companies manufacture specialty healthcare products through CooperVision and CooperSurgical. CooperSurgical makes diagnostic products, surgical instruments and accessories to the women's healthcare market.