Roberto Bellini (right), CEO of Bellus Health, and his father Francesco, the company’s chairman and former CEO of BioChem Pharma, in their offices in Laval, Que., on April 18.Christinne Muschi/The Globe and Mail
Bellus Health Inc. shareholders have voted in favour of GSK PLC’s US$2-billion takeover of the Laval, Que.-based cough-treatment developer.
The US$14.75-a-share deal, which received 99.99-per-cent support Friday, goes to the Quebec Superior Court next week for approval and is expected to close this month. It is the latest in a series of US$1-billion-plus takeovers of Canadian life-sciences companies, including Clementia Pharmaceuticals Inc., Trillium Therapeutics Inc. and Baylis Medical Co. Inc.’s cardiovascular-device business.
This week Novartis AG said it would buy Seattle kidney-disease-drug developer Chinook Therapeutics Inc., which was founded in Vancouver and has operations there, for US$3.5-billion.
The deal is the culmination of a two-decade quest by Montreal’s Bellini family to repeat the blockbuster success of HIV/AIDS drug developer BioChem Pharma Inc., which Bellus chairman Francesco Bellini led and sold to Shire Pharmaceuticals PLC for $5.9-billion in 2001.
Dr. Bellini bought a stake in Bellus’s predecessor, Neurochem Inc., a year later and became chief executive officer, convinced its lead drug candidate could slow the onset of Alzheimer’s disease. But the U.S. Food and Drug Administration in 2007 determined the drug’s effect on patients was inconclusive, sending Neurochem stock into a tailspin. In 2010, the company changed its name to Bellus and Dr. Bellini handed the reins to his son, Roberto.
Bellus’s next drug, which targeted a kidney ailment, failed effectiveness trials in 2016. The stock crashed again. Bellus had few prospects, nine employees, $8-million cash and a market capitalization of $15-million.
But the younger Mr. Bellini pressed on, licensing global rights to a molecule from a local research institute that had potential as a cough suppressant. Bellus generated positive efficacy results in rodents and showed the drug, called camlipixant, was safe in humans. It also raised money to continue research and development.
The stock plummeted again in mid-2020, after camlixipant was shown to have no noteworthy impact on less-frequent coughers. But management was encouraged by results showing more seriously affected patients experienced valuable cough reduction.
It also did not cause a strange side effect seen in a rival drug from Merck that left many patients with reduced sense of taste. Bellus published promising data for chronic sufferers in late 2021 and is set to release results of larger-scale efficacy trials next year.
Meanwhile, Bellus was in talks with potential acquirers. In its deal circular, Bellus revealed it had contacted several global pharmaceutical companies about a potential transaction in 2019, entering into confidentiality agreements with several over the next three years. It began talks with GSK last fall, leading to an initial offer of US$12.50 in March. After negotiations, GSK upped its offer to US$14.50 in early April.
Bellus countered with US$16. GSK’s chief commercial officer, Luke Miels, told Mr. Bellini the counteroffer was unacceptable and the British giant would walk if Bellus didn’t take the US$14.50. Mr. Bellini countered it would not accept the offer but “invited [GSK] to submit an improved proposal prior to terminating discussions,” the circular reads. A day later, on April 7, GSK upped the offer by 25 US cents. The deal was announced 11 days later.
The Bellini family stand to make US$105-million selling their stock, and the CEO stands to pocket a further US$27-million-plus from his vested stock options.