Week's news analysis

Big Pharma speed up on acquisitions
in rare diseases and cancer

By The Editor - 16 september 2020

If the first half of 2020 has not been a busy time for acquisitions, things have definitely changed in the second half so far, with several announcements happening at the end of August and in September. However, Novartis' CEO Vas Narasimhan told the Swiss newspaper Neue Zuercher Zeitung that "the Covid-19 pandemic has made it more difficult to value takeover candidates". But Big pharma did not share his vision, with M&A speeding up significantly at the end of the summer period.

In 2019, total M&A in the pharmaceutical industry reached $480 billion, versus $330 billion in 2018 and $220 billion in 2017. In 2020, with the Covid-19 pandemic, total deals reached $120 billion at the end of July.

The common point of the latest M&A was that they were more focused on rare diseases and oncology, rather than on mass market treatments like cardiovascular or diabetes.

That was the case with Sanofi, as the French company agreed to buy Principia Biopharma in a deal worth up to $3.4 billion. The San-Francisco based company owns a portfolio of drugs (BTK inhibitors) dedicated to treat autoimmune disorders. Its BTK inhibitor'168 could generate $2 billion in sales if it is approved in 2024.

Same happened with Johnson & Johnson, as the American drug giant bought drugmaker Momenta Pharmaceuticals Inc. for about $6.5 billion. This gave J&J an entry into a potentially big -selling new class of drugs to treat certain autoimmune diseases, as it is already active in rheumatoid arthritis and psoriasis. Momenta's experimental drug, nipocalimab (FcRn antibodies), is indicated in treating a rare type of anemia called warm auto - immune hemolytic anemia. It recently received a rare- pediatric-disease designation from the FDA for the prevention of hemolytic disease of the foetus and newborn. And the compound, also known as M281, is being evaluated in the Phase II/III VIVACITY-MG study in generalised myasthenia gravis.

Rare diseases were not the only field for M&A. End of August, Takeda completed its plan to divest $10 billion to pay down debt it incurred last year from the $58 billion acquisition of Shire PLC. Private equity giant, Blackstone Group Inc. bought its consumer healthcare business for $2.29 billion.

The surprise came from the cancer field, with two deals announced mid-September. Gilead Sciences recorded the most important deal of the year so far (and of its history), offering approximately $21 billion to acquire Immunomedics and to broaden its positions in cancer, and more specially in solid tumors. The agreement includes sacituzumab govitecan-hziy (Trodelvy), a first-in-class Trop-2 directed antibody-drug conjugate (ADC) that was granted accelerated review by the FDA in April for the treatment of metastatic triple-negative breast cancer. Immunomedics plans to submit a supplemental biologics license application to support full approval of the drug in the US by the end of 2020. The company is also on track to file for regulatory approval in Europe in the first half of 2021.

Earlier in September, Gilead Sciences had partnered with Jounce Therapeutics to exclusively license the latter's JTX-1811 programme, an experimental immuno-oncology therapy. JTX-1811 is a monoclonal antibody developed to selectively reduce immunosuppressive tumor-infiltrating T regulatory (TITR) cells. An investigational new drug (IND) application for the therapy is expected to be submitted in the first half of next year. As part of the agreement worth up to $805m, Gilead will make an $85 million upfront payment and a $35 million m equity investment in Jounce upon completion of the transaction. In addition, Jounce is eligible for up to an additional $685 millionm in clinical, regulatory and commercial milestones, as well as sales royalties.

Last but not least, still in the field of ADC, Merck & Co penned a $4.2 billion deal with Seattle Genetics Inc (includind investment, unfront payment and milestone) to develop and sell breast-cancer treatments. The two companies will work on a drug currently in Phase 2 clinical trials (ladiratuzumab vedotin) as a monotherapy in combination with Merck & Co's Keytruda. Seattle Genetics will also grant Merck & Co an exclusive licence to sell its Tukysa drug for treatment of breast cancers that test positive to certain protein in Asia, Middle East and Latin America. In details, Merch & Co will invest $1 billion to acquire 2.9 % of the company's shares. Moreover, Seattle Genetics will take a $600 million upfront payment from Merck and will be eligible for milestone-related payments of up to $2.6 billion.

PHARMAnetwork magazine - Edition NO46: "M&A PLUMMETED IN SECOND QUARTER OF 2020"| Read...
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