Certainly the first quarter saw plenty more evidence of a US tide turning toward M&A, though cash was not always the driving force.

Johnson & Johnson (New Brunswick, NJ) agreed in February to buy Scios (Sunnyvale, CA) for $2.4 billion in cash. Scios markets a heart failure treatment, Natrecor, and its pipeline includes kinase inhibitors being developed for rheumatoid arthritis.

NPS Pharmaceuticals (Salt Lake City, Utah) is acquiring Enzon (Bridgewater, NJ) for $615 million in shares. Cash-starved NPS admitted the main motivation for the deal was Enzon's $100 million in cash reserves, plus its $23 million quarterly revenues from its marketing deal with Schering-Plough for the hepatitis C drug Peg-Intron.

Cephalon (West Chester, PA) agreed in February to acquire Australia's SIRTEX, for $161 million in cash. SIRTEX last year obtained US marketing approval for an injected radiotherapeutic for liver cancer.

Protein Design Labs (PDL; Fremont, CA) is to acquire privately owned Eos (S. San Francisco, CA) for $37.5 million in shares. PDL develops therapeutic antibodies, whereas Eos has an anti-cancer antibody in clinical trials.

Epimmune (San Diego, CA) is to merge with the privately owned French firm Anosys after failing to raise up to $6 million of extra cash through a US share issue. Both companies are developing therapeutic vaccines for cancer or infectious disease. The merged company will be partially funded by Franco-German giant Aventis.

OSI Pharmaceuticals (Melville, NY) has agreed to purchase pharmaceutical firm Cell Pathways (Horsham, PA) for about $32 million in shares. Cell Pathways was down to $11 million cash by the end of 2002 and said that without the OSI merger it may not be able to continue operating. OSI develops cancer therapeutics and is interested in Cell Pathways' oncology drugs Aptosyn and CP461, both in clinical trials, and its marketed drug Gelclair for oral mucositis.

As mentioned above, Corvas agreed to be acquired by Dendreon for $73 million in shares, but Corvas shareholders look unlikely to approve the deal. Some are complaining that Corvas is burning cash so fast that the cheapest option is to fold it and distribute its assets to shareholders.

PM