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Wilson Sonsini Goodrich & Rosati just bagged a deal that demonstrates big pharma’s growing appetite for early-stage biotech ventures. Lawyers from the firm represented the startup Angiosyn Inc. in all aspects of its $527 million sale to Pfizer Inc. Wilson handled intellectual property, structuring of the acquisition and securities issues for Angiosyn, which is developing a drug that prevents vision trouble by controlling blood vessel growth. Wilson got the business through its long-time relationship with Alta Partners, the venture capital firm that funded Angiosyn. Wilson partner Vern Norviel’s personal connection with David Mack, director at Alta Partners and CEO of Angiosyn, helped seal the deal. Mack previously was head of cancer biology at Affymetrix Inc., where Norviel also once worked as general counsel. The pair weathered the company’s IP wars together. Wilson lawyers point out that Pfizer’s interest in a drug which has yet to be tested on animals suggests big pharma’s increased interest in earlier-stage drugs as the pipeline for new therapies is less full than it used to be. Pfizer and Angiosyn initially discussed a partnering agreement, but the deal morphed into an acquisition of the entire company. “This is not unique, but interesting for many companies that have one drug or a limited portfolio and are looking to free up assets,” said Wilson partner Ian Edvalson. Selling off the company makes good sense for a venture formed around a single therapy, Edvalson said. As big drug companies continue to look to earlier-stage ventures, he expects more partnership and licensing talks to end in buys. He added that Pfizer’s partnership with Eyetech Pharmaceuticals Inc. made it a natural fit for Angiosyn. “They had a lot of experience, and Angiosyn felt very comfortable,” said Edvalson. As part of the agreement, Angiosyn stockholders would receive an up-front payment and other compensation — plus royalties from future sales. Wilson partner Ivan Humphreys worked on the deal, as did associates John Chase, Amanda Keith, Ilan Lovinsky, Lowell Segal and Maya Skubatch. Pfizer’s team included in-house lawyers Seth Jacobs, Larry Miller and Kira Schwartz . –Marie-Anne Hogarth NAPSTER PIPES UP Napster, the sanitized incarnation of the formerly illegal online music exchange, has had a heavy news week. Since Monday, it’s announced its intention to sell films online, plus plans to begin a German music service, and a new financing deal that will reap more than $52 million in funding from private investors. “From the perspective of a lawyer, it’s been an exciting time to be involved in the business,” said Karen Dreyfus, a partner in O’Melveny & Myers‘ Menlo Park office who represented Napster in the financing deal. “Just a few years ago, people didn’t think online music distribution was going to be a successful business model.” Evidently that’s changed since a small group of investors had enough faith in Napster to make an investment after just a few weeks of consideration. Dreyfus said Napster’s decision last September to sell its software division and focus solely on distribution services is largely responsible for the investors’ faith. “It’s sort of emblematic of a new beginning for the company,” she said. “This is the first time they’ve raised money since they’ve been purely a music company.” The funding deal was structured as a private investment in public equity, Dreyfus said, to provide substantial cash on short order. “This PIPE transaction came together rather quickly, so we only spent a couple of weeks on it. And that’s one of the reasons that companies use these PIPE transactions,” Dreyfus said. The PIPE structure allows institutional investors to receive equity in a company that they can then sell as public stock. “They really became popular two years ago when the public offering market was not very strong,” Dreyfus said. Even though the market has improved since then, PIPEs have remained popular as an efficient method of raising quick cash. Dreyfus worked with O’Melveny associates Ayelette Robinson and Gene Levoff on the deal. The investors, whose names have not been disclosed, were represented by Hahn & Hessen in New York. –Justin Scheck

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