Basketball: The Playoff Skinny for Monday and Tuesday

Boys Basketball
Cedar Run District Semifinals
#1 Osbourn 50, #4 Loudoun Valley 26
The Vikes' goal was to hold Osbourn to 30 points and they almost did it, limiting the high-scoring Eagles to just 18 at the half but Osbourn had too much and ended Valley's season
#2 Battlefield 73, #3 Stonewall Jackson 46

Liberty District Quarterfinals
#1 Langley 60, #8 Marshall 39
#4 Fairfax 62, #5 TJ 60
#3

Boys Basketball: Woodgrove's Gilson, Potomac Falls' Mihailovich Named Dulles Players of the Year; PFalls' Hawes and 'Grove's Douglas are Coaches of the Year

Brad Gilson: Dulles District
Division 3 Player of the Year
(Feb. 16, 2011) - Woodgrove High School junior Brad Gilson and Potomac Falls senior Lukas Mihailovich were selected as the Dulles District Division 3 and Division 4 Players of the Year in a vote of the district's boys basketball coaches.

Coach of the Year honors went to Jeff Hawes, who led Potomac Falls to another regular-season title,

Girls Basketball: Loudoun County Sweeps Dulles District D4 Honors as Batts is Player of the Year, Fisher Coach of the Year

Brittany Batts after scoring 39 points on Senior Night last Friday


(Feb. 16, 2011) - Dulles District regular-season district champion Loudoun County High School swept postseason honors for Division 4 as Raider senior Brittany was named Player of the Year and first-year coach Derek Fisher earned Coach of the Year.

In Division 3, it was Dominion High School freshman A.J. Johnson and Woodgrove

Sanofi/Genzyme: The Hard Work Begins

It's official. The months of haggling and well-timed media leaks are finally over. But that doesn't mean there aren't a number of unanswered questions tied to Sanofi's $20.1 billion purchase of Genzyme.

In their conference calls with investors and the press, Messrs. Viehbacher and Termeer played chums, outlining the merits of a Sanofi/Genzyme tie-up in the broadest of terms, while still managing to stay mum on specifics. But even with the complete disclosure on the proposed CVR payments, the question ahead of the deal is still the central question today: why is Genzyme, at $74-a- share, a good deal for Sanofi shareholders?

Put another way: does the scarcity factor associated with Genzyme's big biotech status justify its premium price tag, in the same way that oenophiles will pay $5000 to quaff a rare vintage? (Or is this acquisition destined to be tarred with the same problems AstraZeneca has endured in trying to bolt on MedImmune?)

At the deal's current price, Sanofi claims the Genzyme acquisition will be accretive, and possibly by 2012. As their CFO Jerome Contamine put it to investors on the call announcing the deal, "We can tell, as early as today, that this transaction will be accretive to our business earnings, the earning per share, as early as one year after closing; and that it will be accretive by €0.75 to €1 per share by year 2013." Moreover, Contamine also promised the return on capital will be in excess of Sanofi's average cost of capital by year two.

Problem is, it's very hard to confirm such a statement independently without knowing how Sanofi internally defines its cost of capital. (And surprise, surprise, when analysts pushed Sanofi management on the question, they didn't exactly answer, instead noting that "we adjust our cost of capital to each and every investment.") And the company wasn't exactly forthcoming about the synergies it sees post-close either. In the Q&A with investors, Contamine demurred, eventually saying that based on Sanofi's assumptions it anticipates generating "north of $600 million in synergies." But apparently uncertainties, which include an announced performance program for Genzyme employees mean "the accretion range...is more meaningful because it includes everything."

Why does this matter? For starters, because Viehbacher has been vocal in his criticism of blockbuster M&A and the return it provides shareholders. Add in his own admission at the JP Morgan Healthcare Conference that "with cheap debt, you can make almost any transaction look accretive," and it's hard not to be a wee bit skeptical of how such a fully loaded deal is beneficial to Sanofi shareholders.

That's not to say Viehbacher didn't put on a good show -- or that he failed to sell his logic to some portion of Sanofi's shareholders. Sanofi's shares, which are listed on the Paris exchange, closed up 3.5% on February 16, ending the day at €51.55. But that positive reaction could also be relief that the months long back-and-forth has come to an end, and that Viehbacher did what he said he would do, which was close the deal. There's also the possibility that Sanofi investors were simply glad the deal didn't cost them any more than $74 a share upfront; recall that at times over the past few months industry wags have speculated the final deal price could cross the $75-a-share threshold.

But will said investors be so happy if Cerezyme and Fabrazyme sales fail to rebound to their pre- 2009 -2010 levels? The $1 per share contingent value right tied to the continued resolution of manufacturing issues Sanofi won't have to pay will be cold comfort in that scenario; after all, it leaves considerable room for looming competitors to take advantage of what Viehbacher called Genzyme's "gold-standard" brand.

During his call with investors Viehbacher emphasized the diligence Sanofi has done on this front. "We have been out there in the marketplace all along the year, really making sure that the Genzyme brand was not really suffering too much because of production difficulties," he said.

But it's hard not to see the brand as somewhat tarnished either. Some 6000 Gaucher patients are currently being treated for their disease and Genzyme still commands the lion's share of the market, with 4700 getting its enzyme replacement Cerezyme. But the manufacturing snafus have allowed competitors like Shire's Vpriiv to come on strong, with some 1300 patients now being treated by non-Genzyme alternatives. That proportion could grow, especially since patients haven't really had the full option to jump to Vpriiv because of that medicine's supply constraints.

Keep in mind, too, that as early as next week US patients could have yet another therapeutic option--and one that's significantly cheaper than Cerezyme. Pfizer/Protalix's taliglucerase could get a positive nod from regulators on February 25; given the medicine is manufactured using a plant-cell based technology that is more cost-effective than the process Genzyme uses to make Cerezyme, it's widely expected that Pfizer and Protalix will market the medicine at a significant discount, potentially more than the 15% price cut Shire is already offering on Vpriiv.

Even with ongoing improvements in its manufacturing, Genzyme has missed (admittedly only slightly) its pre-released revenue guidance for the Gaucher drug. As Chris Raymond, an analyst with Baird, outlined in a note to investors, fourth quarter Cerezyme sales fell short by $2 million, with the final tally for the drug coming in at just $222 million. Calling the information "surprising", Raymond asked "how does one miss a pre-released number?"

Admittedly a small discrepancy, this failure shows the crack team at Genzyme still has work to do to get its flagship rare disease franchise back on track. And given the deal's price tag, that means Sanofi has a lot of its own work to do as well.

Versartis: So Cutting Edge

Early Wednesday, Versartis said it had raised a $21 million B round and, at the same time, spun out its lead molecule, an extended-release version of the type-2 diabetes drug exenatide, into a new company. Dig a little deeper, and you'll find the deal encompasses two cutting-edge trends in biotech financing.

First, Index Ventures, the firm that backed Versartis' Series A in 2009, is also investing in the new company, Diartis. It would love to match what it did with PanGenetics: create companies around single molecules with a leaner, cleaner path to exit. With PanGenetics, Index successfully sold one compound but saw the second fail in 2010. Last year, Index funded Mind-NRG, essentially one person and one asset, with an initial tranche of €1.5 million. This asset-financing vision is one Index has embraced, with other VCs cautiously following, as more traditional venture strategies are buffeted by continuing financial pressures and rare exit opportunities.

Second, the carve-out of Diartis from Versartis creates a second investment for Amunix, the platform company behind each firm's extended-release technology. The technology is the pegylation-like XTEN, which Amunix co-founder Willem "Pim" Stemmer wants to apply to a whole host of proteins. He says the firm is focused on a list of "20 to 30," some already commercial like exenatide, some "fallen angels" that failed in the clinic, and some addressing new targets. The idea is to get them ready for clinic, then either sell them directly or create new, Versartis-like companies around them.

It's a platform-only model, once dismissed as unworkable by investors who didn't see enough value creation to build a viable exit. But it's gaining traction. As this blog first reported last month, yeast-based antibody company Adimab is licensing its technology to newcos that will do the drug-development dirty work. First up is Arsanis, in Vienna, Austria.

We have a lot more on the deal in the next Pink Sheet Daily, including more thoughts from Stemmer -- who's been named a recipient of the 2011 Draper Prize, the nation's most prestigious engineering award -- and Index partner Kevin Johnson -- no, not that Kevin Johnson! -- plus a comparison of the Diartis GLP-1 diabetes molecule to other next-generation diabetes treatments. -- Alex Lash and Chris Morrison

Photo courtesy of flickerer LollyKnit.

Nonprofit: Don't Allow Electronic Billboards in Pgh.

A national group against billboards has come to Pittsburgh to advocate a ban on electronic billboards in the city, about a week before City Planning Commission takes up a measure to regulate the signs.

The nonprofit Scenic America argues electronic billboards are intrusive to landscapes and dangerous to drivers, as well as harmful to property values. Executive Director Mary Tracy says each digital sign also uses the same amount of electricity as about 30 houses.

Tracy says the billboards simply aren’t worth the problems they bring up.

“ You have traffic safety issues, you have environmental issues, you have aesthetic issues, and you have to kind of look at it and say, ‘What are we really gaining here?’” says Tracy.

Tracy says the advertising industry often argues this is a free speech matter, but she says it’s not. She argues that because the signs can be dangerous to drivers and lower property values, they should be open to regulation. Tracy says four states and more than 1,000 municipalities have already forbidden the billboards.

The Scenic America leader says the proliferation of electronic billboards is an example of political lobbying trumping the public interest.

The Planning Commission will look at an ordinance regulating the size, brightness and placement of the billboards next Tuesday.

Scenic America is holding a public meeting on the issue at two o'clock today, at the Conservation Consultants, Inc. Center on 14th Street in the South Side.

No more Bushes

There's been a lot of talk in the last few weeks pushing Jeb Bush as a candidate in 2012 but there's just one problem: a plurality of Americans say they would definitely not vote for another Bush for President in the future.

44% of voters in the country say there's no way they'd support another Bush Presidency. Only 14% say they'd definitely favor one, and 39% say they'd consider it. The Republican base is decently open to the idea of another Bush- only 10% distinctly rule out the possibility. But a majority of Democrats at 73% and most notably a majority of independents at 50% shut the door to another President Bush. Perhaps those feelings will change in the coming years but it's unlikely they'd shift enough by next November to allow Jeb to win an election that soon.

Interestingly though asked who they'd vote for if George W. Bush was allowed to run against Barack Obama for a third term next year, voters only go for Obama by a 48-44 margin. One thing that number shows is a softening of feelings toward the former President. His favorability is now a 41/49 spread, and he's back up to 81% of Republicans with a favorable opinion of him. His approval numbers with them were much lower than that in the closing years of his term but these figures suggest that all is forgiven, at least with the base.

The other thing they show though is the remarkable weakness at this point of the 2012 Republican field. Only Mike Huckabee, who trails by 3, does better in a match up against Obama than George W. Bush. Mitt Romney who trails by 5, Newt Gingrich and Ron Paul who trail by 9, Sarah Palin who trails by 12, and Donald Trump who trails by 14 all do worse than that. Not a good sign when most of your leading lights fare worse than a former President who left office with atrocious poll numbers.

Full results here