Two Major Pharma M&A Deals Yield Big-Firm Bonanza

Two Major Pharma M&A Deals Yield Big-Firm Bonanza Waleed Alzuhair/Flickr

UPDATE: 4/9/14, 8:30 a.m. EDT. Information on Irish counsel for Questcor has been added to the second paragraph of this story.

A half-dozen Am Law 100 firms—many of them home to lawyers featured in The American Lawyer’s latest Corporate Scorecard and Dealmaker of the Year report—got the second quarter of 2014 off to a strong start by grabbing roles on two big M&A transactions announced Monday in the pharmaceutical sector.

In the larger of the two deals, Irish specialty drugmaker Mallinckrodt has turned to Wachtell, Lipton, Rosen & Katz and Irish firm Arthur Cox for counsel on its $5.6 billion cash-and-stock acquisition of Anaheim-based Questcor Pharmaceuticals, which is being advised by Latham & Watkins and Irish firm Matheson.

In the day’s second major drug industry deal, Shearman & Sterling is advising India’s Sun Pharmaceutical Industries on its $3.2 billion buy of struggling rival Ranbaxy Laboratories. Including assumed debt, the deal—which would create India’s largest pharmaceutical company and the world’s fifth-largest generic drug maker—is worth roughly $4 billion.

Shearman M&A partners Peter Lyons and Eliza Swann, criminal and enforcement practice cochair Patrick Robbins, litigation deputy practice group leader Richard Schwed, antitrust partner Jessica Delbaum and associates Benjamin Brod, Timothy Haney, Edward Mullen Jr. and Cody Wright are leading the team from the firm advising Mumbai-based Sun Pharma, along with Sanjay Asher, a senior partner with Indian firm Crawford Bayley & Co. in Mumbai.

Sun Pharma has strong ties to Shearman. The firm advised the Mumbai-based pharmaceutical company amid its long-running effort to buy a majority stake in Israel’s Taro Pharmaceutical Industries. (Though Sun Pharma prevailed in that push in 2010, it called off a plan to buy the rest of Taro it doesn’t already own last year.) Shearman also represented Indian billionaire brothers Malvinder and Shivinder Singh—who sold their controlling 64 percent stake in Ranbaxy to Japanese drugmaker Daiichi Sankyo in 2008—on their $1 billion buy of a majority stake in Northgate Capital two years later, according to our previous reports.

Daiichi Sankyo, which owns a controlling stake in Gurgaon-based Ranbaxy, has turned to Davis Polk & Wardwell global M&A cohead David Caplan and Indian firm Amarchand & Mangaldas & Suresh A Shroff & Co. for counsel on the target company’s sale to Sun Pharma, according to sibling publication The Asian Lawyer. The Tokyo-based drug giant will now own a 9 percent stake in the acquirer, well off the value of its initial Ranbaxy investment, according to Reuters. (Davis Polk also had a hand in a third pharmaceutical sector deal announced Monday, with corporate partner John Butler leading a team advising Swiss drug giant Roche Group on its $450 million purchase of Massachusetts-based medical testing equipment maker IQuum.)

Weil, Gotshal & Manges corporate chair Michael Aiello and associates Frank Martire and Michael Ray are representing Evercore in its capacity as Sun Pharma’s financial adviser on the acquisition, which is expected to close by year’s end. Arshad Jamil is Sun Pharma’s general counsel; John Dauer Jr. is the company’s chief patent counsel.

Amarchand & Mangaldas and fellow Indian firm Luthra & Luthra are advising Ranbaxy in connection with the transaction, according to local legal publication Bar & Bench. Ranbaxy, whose in-house legal chief is Amit Rai, has struggled in recent years with an array of U.S. legal troubles, including high-profile patent battles with drug giants such as Pfizer. U.S. Senate records show that Ranbaxy paid Patton Boggs $720,000 in 2013 for federal lobbying work on a range of pharmaceutical and health care industry issues.

In Monday’s other big pharma deal, Wachtell corporate partners Adam Emmerich and Benjamin Roth—both of whom played roles earlier this year advising Mallinckrodt on its $1.3 billion buy of San Diego–based Cadence Pharmaceuticals, which was represented by Latham—are leading a team from the firm counseling the company on its latest purchase. Peter Edwards serves as general counsel for Mallinckrodt, which was formed last year after Wachtell advised the company’s former Dublin-based parent Covidien on the spinoff of its pharma unit.

Other Wachtell lawyers currently working on Mallinckrodt’s bid to buy Questcor include restructuring and finance partner Eric Rosof, tax partner Jodi Schwartz, executive compensation and benefits partners Jeremy Goldstein and Adam Shapiro, antitrust partner Ilene Knable Gotts and associates Richard Barbour II, Franco Castelli, Victor Goldfeld, Andrew Kenny, Caith Kushner, Rohit Nafday, Michael Sabbah, Viktor Sapezhnikov, Neil Snyder and Austin Witt.

Leading the Latham team on Questcor’s behalf are Orange County corporate chair Cary Hyden, M&A partner and Orange County office managing partner R. Scott Shean, former global M&A cochair Paul Tosetti and corporate partner Michael Treska. Shean was named an Am Law Daily Dealmaker of the Week last year for his work advising generic drug maker Actavis on its purchase of Irish rival Warner Chilcott. That deal took advantage of Ireland’s corporate tax laws and lowered Actavis’ tax rate by a reported 17 percent. (Reuters reports that tax considerations could also be a complicating factor in Mallinckrodt’s current deal.)

Rounding out the Latham team working on the matter for Mallinckrodt are tax partners Laurence Stein and Nicholas DeNovio, finance partner Wesley Holmes, employee benefits cochair James Barrall, compliance partners Peter Wald and Michele Johnson, environmental partner Christopher Norton, antitrust partner Michael Egge, antitrust counsel Hector Armengod, IP counsel David Kuiper and associates Charles Anthony, Michelle Carpenter, Benjamin Cohen, Ryan deFord, Patrick English, Aneta Ferguson, Andrew Gray, Jeffrey Holgate, John Raney, Joseph Skrokov, Eric Song and Brett Urig.

Earlier this year, Sidley Austin filed papers indicating that it would be lobbying on behalf of Mallinckrodt to “educate federal agencies and congressional offices” about a radioactive material necessary to produce Technetium-99m in medical imaging products. Mallinckrodt also paid $130,000 to Washington, D.C.’s Tarplin, Downs & Young last year to lobby on a variety of pharmaceutical industry issues, according to Senate filings.

For its part, Questcor—whose primary product is the H.P. Acthar Gel used to manage autoimmune and inflammatory conditions such as multiple sclerosis— paid $140,000 in 2013 to Brownstein Hyatt Farber Schreck for lobbying work related to notifying “federal officials of a pending acquisition.”

Simpson Thacher & Bartlett corporate partner Robert Spatt—named an Am Law Daily Dealmaker of the Week last year for his role on another major cross-border transaction—is advising Centerview Partners in its capacity as financial adviser to Questcor on its proposed sale to Mallinckrodt, which is expected to close in the third quarter of this year.

Questcor’s general counsel and executive vice president for strategic affairs is Michael Mulroy, while attorney Raymond Furey serves as the company’s chief compliance officer. Virgil Thompson, an inactive member of The State Bar of California, is an independent chairman of the board of directors at Questcor.

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