Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation, jcm@btobioinnovation.com

Mergers, Acquisitions and Joint Ventures

Johnson & Johnson withdrew from a potential acquisition of Actelion indicating that it had not been able to reach an agreement that would create adequate value for its shareholders. According to Reuters, Actelion stated that the company is « engagged in discussions with another party regarding a possible strategic transaction ». This party is believed to be Sanofi and on this Friday, Bloomberg reported that the current discussions takeover price is ~275 $/share which would value Actelion at ~30 billion equating to 13 times Actelion sales and 30 times earnings.

Bayer teams up with Versant Ventures to forms a joint venture named BlueRock Therapeutics, a company involved in stem cell based therapies and will invest $225 million in the deal. BlueRock has licensed the induced pluriponet stem cell (iPSC) technology from IPS Academia in Japan.

Lonza has confirmed its interest to acquire Capsugel – a manufacturer of hard gel cpasules- « as it would fit perfectly with its Healthcare Continuum strategy and strengthen its position as leading supplier to a number of important healthcare markets ». Pfizer sold Capsugel to Kohlebrg Kravis Roberts & Co for $2.4 billion back in 2011.

Business

Purdue Pharma (Stamford, CN, USA) enters a collaboration with Exicure (Skokie, IL, USA) on the discovery and development of therapies for psoriasis by a gene-regulation approach using the latter's spherical nucleic acid technology. Under the terms of the agreement, Purdue Pharma will pay up to $790 million and get development and commercial rights to Exicure's lead drug candidate, AST-005, plus rights to three other targets, if options are exercised.

AstraZeneca acquires rights to Ionis (former ISIS) antisense KRAS drug in a deal worth $165 million.

Celgene enters a 5 years discovery collaboration on various neurodegenerative diseases with Evotec in using the latter induced pluripotent stem cell platform. Under the terms of the deal Celgene will make a 45 million upfront payment and up to 250 million in milestones.

Baxter International acquires Claris Lifesciences’ (Ahmedabad, India) generic business which includes 11 approvd drugs in the US for about $625 million, adding several generic medication products and production capabilities to Baxter’s sterile medication and delivery portfolio.

Approval of drugs and vaccines

The European Commission approves :

Intercept's (New York City, NY, USA) Ocaliva for the treatment of primary biliary cholangitis (PBC), a rare autoimmune cholestatic liver disease, giving patients the potential to access the first new therapy for the condition in nearly 20 years. Ocaliva (obeticholic acid) is a highly selective agonist of the farnesoid X receptor (FXR), a nuclear receptor expressed in the liver and intestine that regulates bile acid, inflammatory, fibrotic and metabolic pathways.

Ferring Pharmaceutical’s (Saint Perx, Switzerland) Rekovelle or follitropin delta, an individualized recombinant follicle stimulating hormone derievd from a human cell line, for controlled stimulation in women undergoing assisted reproductive technologies.

US FDA approves :

Pfizer’s Eucrisa as a tretament for mild to meoderate atopic dermatitis. Eucrisa, or crisaborole, a topical ointment used twice daily, is a phosphodiesterase 4 (PDE-4) inhibitor, but its specific mechanism of action in atopic dermatitis is not known.

Vericel’s (Cambridge, MA, USA) Maci, an autolgous cultured chondrocytes on porcine collagen membrane, for use in repairing symptomatic, full-thickness knee cartilage defects in adult patients.

US FDA approvals have been surging substantially over the last five years. This will not be the case in 2016. As of December 9, 2016 only 19 new BLAs and NDAs have been approved, the lowest figure since 2007. There were also fewer applications in 2016 and the number of rejections or complete response letters (CRLs) increased after a record low in 2015 (see charts). These new figures raise again concerns abouth the industry overall R&D productivity and a report by Deloitte’s analysts picked upon the point (see below).

Drugs at clinical stage

US FDA grants orphan status to :

Eiger BioPharmaceuticals (Palo Alto, CA, USA) exendin 9-39, as treatment for hyperinsulemic hypoglycemia. a range of disorders characterized by excessive levels of insulin and low blood glucose levels that includes post-bariatric hypoglycemia (PBH). Exendin 9-39, licensed from Stanford University, is a 31-amino acid peptide that selectively targets and blocks GLP-1 receptors, normalizing insulin secretion by the pancreas and reducing PBH.

Viking Therapeutic’s (San Diego, CA, USA) VK0214, an orally available thyroid receptor beta agonist designed to manage X-linked adrenoleukodystrophy (X-ALD). ALD is a rare and often fatal metabolic disorder characterized by a breakdown in the protective barriers surrounding brain and nerve cells; a process known as demyelination.  The disease, for which there is no approved treatment, is caused by mutations in a peroxisomal transporter of VLCFAs, known as ABCD1. 

Ability Pharmaceutical’s (Barcelona, Spain) ABT0812, an oral targeted anti-cancer compound designed to treat pancreatic cancer. ABT0812 inhibits the PI3K/Akt/mTOR pathway and causes cell death by autophagy through the overexpression of TRIB3, an endogenous Akt regulator.

….and to Boehringer Ingelheim’s Ofev, or nintedanib, as a tretament for mesotthelomia, a rare cancer disease that affects the mesothelium. Nintedanib is a triple angiokinase inhibitor currently approved to treat idiopathic pulmonary fibrosis

European regulators are reviewing Dompe’s (Milano, Italy) Oxervate, or cenegermin, a recombinant form of the human nerve growth factor (NGF), an orphan status drug, as the first biotechnology treatment for patients with neurotrophic keratitis, a rare and severe degenerative eye disease.

Pfizer’s Xtandi or enzalutamide in combination with abiraterone and prednisone compared to abiterone and abiterone alone in patients with chemotherapy-naïve metastatic castration-resistant prostate cancer (CRPC) failed to show an increase in efficacy with XTANDI as measured by progression-free survival. The US FDA approved XTANDI for the treatment of CRPC in 2012 based on a demonstrated benefit in overall survival compared to placebo.

Medical Devices and Diagnosis News.

The UK's National Institute for Health and Care Excellence (NICE) is working alongside the US FDA to help speed up patient access to the latest diagnostic tests and medical devices. The Institute said its Scientific Advice programme is linking with the FDA's Payer Communication Taskforce, which aims to facilitate communication between device manufacturers and payers. The agencies are working closely together to help developers of medical devices, diagnostics, and similar technologies gather the best evidence to demonstrate the clinical effectiveness of their products, and thus give them the best chance of clearance and uptake post approval.

Defymed (Strasbourg, France) and Semma Therapeutics (Cambridge, MA, USA) partner to develop MAILPAN, a bioartificial pancreas device and combine it with stem cell-derived differentiated insulin-secreting cells created by Semma to treat type 1 diabetes. MAILPAN contains encapsulated pancreatic cells capable of delivering insulin without the need for immunosuppressants.

Roche divests its interest in Pacific Biosciences.During the collaboration, the both partners developed the Sequel System, a new sequencing platform

Cost, Pricing and Market Access

Eli Lilly follows the path of Allergan and Novo Nordisk in limiting the yearly price hikes to single digit percentages. Starting next year, Lilly will partner with pharmacy benefits manager (PBM) Express Scripts to provide discounted insulin to people who have no insurance or are in high-deductible plans. The program could save some diabetes patients as much as 40%, according to a press release from Lilly.The discounts will be offered through Blink Health, a website and smartphone app that previously only sold generic drugs. Lilly will be the first company to offer branded drugs via the Blink platform.

Patients in Scotland with advanced prostate cancer will be able to get routine access to Sanofi Genzyme's Jevtana, or cabazitaxel, after cost regulators changed track and endorsed the drug as a cost effective use of resources.

The UK NICE Committee endorsed Sanofi’s Jevtana but has rejected :

Roche’s Perjeta or pertuzumab for the routine treatment of certain types of breast cancer, Vertex Kalydeco or ivacaflor forthe treatment of cystic fibrosis in adults with the R117H genetic mutation, because of too much uncertainty around the overall clinical benefits the drug may bring in relation to its high cost; MSD's Keytruda or pembrolizumab, for advanced melanoma in patients who have previously been treated with ipilimumab, because the Committee was not satisfied that evidence on the long term survival benefits was strong enough to justify the drug's cost ; Shire's Plenadren (modified release hydrocortisone) for the treatment of adrenal insufficiency, because of a lack of robust evidence in the submission on the clinical benefits and value for money of the medicine when compared to other available treatments ; as well as Shield Therapeutics' Ferracru (ferric maltol) for the treatment of iron deficiency anaemia (IDA) in patients with Inflammatory Bowel Disease (IBD), because of uncertainty around the evidence about the clinical and cost benefits in relation to other currently available treatments for this condition.

Miscellaneous

It is now legal to possess, use, and home-grow marijuana for Massachusetts residents over the age of 21.

The FDA's Office of Prescription Drug Promotion claimed that Sanofi and Celgene made “false or misleading representations about the risks associated with” the featured Toujeo and Otezla respectively, a violation of the FDA Act. Sanofi said it's working to pull the ad the agency considers problematic. Celgene said it plans to work with the FDA to address its concerns.

Gilead versus Merck : Round Three

Last June, a federal court judge decided Gilead did not have to pay $200 million in damages that had been awarded in separate patent lawsuit over Sovaldi because Merck displayed a “pervasive pattern of misconduct.” The judge concluded the Merck lawyer intentionally gave false testimony about his role in failed negotiations between Merck and Pharmasset.  In a rather unexpected call a federal jury ordered now Gilead to pay $2.54 billion to Merck in order to resolve a long-running patent dispute concerning its Sovaldi and Harvoni hepatitis C treatments. The verdict is the latest twist in a heated battle between the two US companies over hepatitis C patents, which have proven extremely lucrative over the last few years. Since its launch three years ago, Sovaldi has generated more than $19 billion in sales for Gilead, while Harvoni, which is an enhanced version of its predecessor, has notched more than $23 billion since becoming available in 2014. Gilead plans to appeal. “We remain steadfast in our opinion that Idenix’s US patent is invalid, and since they made no contribution and assumed none of the risk in the discovery and development of Sovaldi and other medicines based on this drug, we do not believe they are entitled to any level of damages,” a Gilead spokeswoman said.

A report by Deloitte’s analysts indicates that for the world’s top 12 biopharmaceutical companies the Return on Investment (ROI) on their R&D (estimated at $87 billion in 2016) has shrunk for 10.1% in 2010 to 3.7% in 2015, the lowest level ever. De­loitte says, is that while de­vel­op­ment costs on new drugs have plateaued at about $1.5 bil­lion on each pro­gram, their rev­enue keeps falling. There’s been an 11.4% drop in rev­enue year-on-year over 6 years, which has now fallen to $394 mil­lion in av­er­age peak an­nual sales. The report concludes by stating that the num­ber of block­busters pro­duced by these large companies has dwin­dled by more than half while they keep spend­ing big in search of smaller drugs.

In sharp contrast to the pervious analysis, an article by the Executive Editor of MedNous, published in the November/December issue of the British Journal, one can find a proforma P&L of the six major European companies (without Roche) which shows that they convert 20.2% of their 2016 Q3 sales into an operative profit, a very impressive figure.

Siemens Healthineers will invest approximately $300 million over the next four years to expand its facility in Walpole, Massachusetts, which houses manufacturing and research and development for laboratory diagnostics. The facilty expansion will create at least 400 new jobs, but said it could potentially bring that number up to 700, doubling employment at the site by 2026.

The Association of the British Pharmaceutical Industry's Code of Practice has named and shamed five pharmaceutical companies – AstraZeneca, Gruenenthal, Janssen-Cilag, Boehringer Ingelheim and Eli Lilly – in the British medical press. All drugmakers had brought discredit upon, and reduced confidence in, the pharmaceutical industry, thereby breaking a key Clause of the Code. Details of their Code breaches will be included in advertisements to appear in the Nursing Standard on 14 December 2016 and the Pharmaceutical Journal and British Medical Journal on 17 December 2016.

Alexion’s (New Haven, CONN USA) has announced the surprising resignation of both its CEO and its CFO. David Brennan, the former AstraZeneca chief ill step in as an interim CEO.

Sanofi who had announced an underprofiting diabetes business unit with slower that expected drug launches, plans to cut 20% of its diabetes and cardiovascular salesforce which could amount to hundreds of jobs.

Ipsen (Boulogne-Billancourt, France) today announced that Claude Bertrand, Executive Vice President, R&D, Chief Scientific Officer, will depart Ipsen on January 2^nd, 2017, to join another company. Pending Claude Bertrand’s replacement, Alexandre Lebeaut, MD, will lead the R&D division in the interim.

Bioevents

9^th Biotech Showcase Investor Conference on January 9-11, 2017 in San Francisco (USA)

JP Morgan Health Conference on January 9-12, 2017, in San Francisco (USA)

BIO CEO & Investor Conference on February 13-17, 2017, New York City (USA)

BIO Asia on March 14-15, 2017, in Tokyo (Japan)

BIO-Europe Spring on March 20-22, 2017 in Barcelona (Spain)

This document has been prepared by btobioinnovation and is provided to you for information purposes only.  The information contained in this document has been obtained from sources that btobioinnovation believes are reliable but btobioinnovation does not warrant that it is accurate or complete. The views presented in this document are those of btobioinnovation’s editor at the time of writing and are subject to change.  btobioinnovation has no obligation to update its opinions or the information in this document.