Exhibit 3 **Pharmaceutical Appetites: Dealmaking Scorecard**
Big Pharma	Major Biotech Acquisitions	Verdict/Integration
J&J	J&J acquired 3-D Pharmaceuticals in January 2003 for $130 million; followed shortly by the Scios acquisition in February 2003 for $2.4 billion. In 2005 bought two private companies, TransForm (March 2005, $230 million) and Peninsula (April 2005, $245 million).	Scios’ Natrecor has proved a bust for J&J; the company was intended to remain semi-autonomous within the J&J family, though largely dismantled along with the relics of Alza (March 2001, $13.1 billion). No TransForm product has emerged from J&J; an NDA for Peninsula’s doripenem antibiotic has been filed with the FDA; the rest of that company was spun off into Cerexa, which was acquired by Forest Labs for $494 million only a year later, in December 2006.
Pfizer	Pfizer bought Esperion in December 2003, for $1.25 billion, largely for that company’s lead Apo-a-1 hypercholesterolemia drug. Two acquisitions in 2005: private platform play Idun ($280 million in February) and its anti-infectives partner Vicuron ($1.9 billion in June). Bought two private companies in 2006, the CNS focused Rinat ($500 million in April) and vaccine technology play PowderMed ($225 million in October).	Pfizer’s progress with Esperion’s pipeline was largely obscured by its hopes for torcetrapib, which failed in 2006. Apo-a-1 remained in Phase II trials, though Pfizer’s cutbacks in Michigan (home to the Esperion HQ) lend credence to the scuttlebutt that the rest of Esperion will be spun out some time this year. PowderMed, the company’s first foray into the vaccine space, may lead to further deals there. Its Rinat acquisition—which broke private deal price records—was centered around that firm’s lead Alzheimer’s project, which remains preclinical.
GSK	GSK bought ID Biomedical in September 2005 for $1.4 billion; in December 2006 it acquired privately held Domantis for $454 million.	GSK’s ID Biomedical acquisition boosted its vaccines capabilities and was of little surprise to observers. The takeout of Domantis moves GSK into uncharted territory; the biotech will merge with GSK’s biopharmaceutical research division and continue operations at its Cambridge, UK, headquarters.
Novartis	Novartis bought the remaining 58% of Chiron that it didn’t already own in September 2005, for $5.1 billion. In June 2006 it acquired the anti-infectives play NeuTec for $568 million.	Novartis culled the vast majority of Chiron’s seemingly underperforming senior management shortly after the close of the acquisition and the renaming of the outfit Novartis Vaccines and Diagnostics. Privately held NeuTec comprised only 23 employees—which Novartis agreed to keep on for two years. Mycograb, the company’s lead product, was held up by EU regulators in November 2006 over concerns about the drug’s safety and manufacturing quality.
Roche	Roche bought the Glycoprotein technology play GlycArt for $182 million in July 2005.	Roche has not announced any progress in applying GlycArt’s glycosylation technology to its own pipeline of monoclonal antibodies. The Swiss firm has generally avoided acquisitions, though it suggested at the January 2007 JP Morgan conference that it might consider adding another “hub,” akin to its Chugai and Genentech affiliates. The bar for such a transaction is high, however, as management indicated such a move would come in place of increased dividends or share repurchases.
AZ	AstraZeneca bought private UK biotech KuDOS in December 2005 for $210 million, and spent more than $1 billion in May 2006 to buy Cambridge Antibody. The pharma has done two acquisitions thus far in 2007, bringing in anti-infective play Arrow Therapeutics for $150 million in February, and MedImmune in April. (See Sidebar.)	AstraZeneca’s dealmaking activity has picked up significantly in recent years, capped by the blockbuster MedImmune deal. Its two big moves—MedImmune and Cambridge Antibody Technology—are largely a reflection of its need to play catch-up in large molecules. Nobody can say the company hasn’t been decisive in that regard, though results are not yet visible.
Merck & Co.	Merck bought the HDAC technology play Aton in February 2004 for $145 million. In 2006 the firm bought two more platform companies: yeast-based biologics firm GlycoFi (with whom it had an existing partnership) for $400 million in May and RNAi play Sirna Therapeutics for $1.1 billion in October.	Merck’s three acquisitions have significantly boosted its large-molecule capabilities. Though expensive, Sirna puts Merck at the forefront of RNAi therapeutics and like Aton, it should fit in well with its Rosetta Inpharmatics technology.
Abbott	Abbott bought cardiovascular drug specialist Kos for $3.7 billion in November 2006.	Abbott’s acquisition of Kos has shored up its cardiovascular drugs business, in particular bringing in the pharmaceutical-grade vitamin Niaspan, a move that seems prescient given Niaspan’s HDL-raising results and Pfizer’s problems with torcetrapib. Abbott has already announced layoffs in its combined Kos/legacy sales force as part of a cost cutting drive.
Lilly	Lilly bought Applied Molecular Evolution for $400 million in November 2003. More recently, it bought Cialis-partner Icos Corp. for $2.2 billion in October 2006 and the privately held insomnia drug specialist Hypnion for $315 million in March 2007.	Lilly’s dissatisfaction with the cost of its Cialis joint venture with Icos led to its acquisition of the biotech partner in 2006. There has been no word on Lilly’s plans to integrate Hypnion, whose Phase II insomnia drug could be first-in-class. The WSJ reported that Lilly was in on the bidding for MedImmune, suggesting the pharma—which has been relatively quiet on the business development front—is in the market for pipeline filler and technologies.
Amgen	Amgen bought the roughly 79% of Tularik it did not already own through previous deals in March 2004 for $1.3 billion. It added Abgenix in December 2005 for $2.2 billion, and Avidia, a private biologics firm, for $290 million plus $90 million earn-outs in September 2006.	The Tularik deal was an important part of Amgen’s entry into small molecules, but it’s tricky to see, in Amgen’s current pipeline, what value came from the deal. One Phase II PPAR modulator from Tularik was out-licensed in January 2007. Buying Abgenix was about getting full rights to panitumumab (Vectibix); given disappointing trial data for that drug, it looks like Amgen overpaid.
S-P	Schering-Plough bought Organon BioSciences, the health care division of Dutch conglomerate Akso Nobel, in March 2007 for $14.4 billion.	The quietly rebounding Schering-Plough’s decision to spend big on Organon will be deemed a success if Organon’s handful of Phase III drugs hold up under regulatory scrutiny. Asenapine, its schizophrenia/bipolar drug in pivotal trials, was recently returned to Organon by partner Pfizer. Schering-Plough also lands Organon’s biologics manufacturing capabilities and animal health business.
Bayer	Bayer Healthcare’s White Knight bid for Schering AG in March 2006 scuppered a hostile takeover by Merck KGAA. The deal, ultimately costing Bayer $20.4 billion, is the largest in our sample and creates the specialty drug firm Bayer Schering Pharma.	By moving in on Schering, Bayer has succeeded in making itself relevant again on a global scale. Integration is ongoing, with cost cutting in the US and Europe going through in early 2007. A specialty force to be reckoned with.
Solvay	Solvay bought privately held French biopharma Fournier in March 2005 for $2.1 billion.	Buying Fournier provided Solvay with the earnings boost it needed to bridge the gap before its own late-stage candidates—including Phase III schizophrenia candidate bifeprunox—reach the market. Solvay got a good price—little over half what Fournier’s family owners had initially put the business up for. But in exchange it promised to maintain most of Fournier’s France-based management and sites.
Genentech	Genentech bought out Xolair partner Tanox for $905 million in November 2006, though the deal has not yet closed as of press time.	Genentech, loathe to acquire anyone, made its first acquisition in its 30-year history when it bought out Tanox to gain more control of Xolair.
Merck KGAA	Merck KGAA bought Serono SA though the acquisition of the Bertarelli family’s controlling stake in the Swiss biotech in September 2006, in a deal valued at $12.9 billion.	Merck’s surprise deal with the Bertarellis has made it more of a global player, though the company has yet to elucidate its R&D and business development strategies going forward. Serono’s US and EU headquarters in Boston and Geneva have been kept as a base for the new firm, Merck-Serono Biopharmaceuticals.
SOURCE: Windhover’s Strategic Transactions Database

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