$354M ex­it pack­age in hand, Medi­va­tion CEO David Hung com­pletes a mas­ter class in biotech auc­tions

David Hung, Medi­va­tion CEO

Now that Medi­va­tion CEO David Hung has com­plet­ed the deal of a life­time with a stratos­pher­ic buy­out, he’s grab­bing a $35 mil­lion gold­en para­chute that is sched­uled to burst open in about a month and car­ry him back down to earth in style. And that’s part of a $354 mil­lion pack­age of stock and op­tions he can now cash out of.

The de­tails on the gold­en para­chute — along with a blow-by-blow ac­count of the bid­ding process that led up to Pfiz­er’s $14 bil­lion win­ner — were all in­clud­ed in an SEC fil­ing on Tues­day. And it makes for re­quired read­ing for any biotech ex­ec look­ing to make the big score some sun­ny day.

Oliv­er Brandi­court, Sanofi CEO

The game got start­ed in late March, when new Sanofi CEO Olivi­er Brandi­court con­tact­ed Hung and asked for a call. Days lat­er, the sto­ry was leaked to the busi­ness press, and Medi­va­tion was in play.

The re­view of what fol­lowed over the next few months in­cludes some in­ter­est­ing de­tails on Medi­va­tion’s re­sponse to Sanofi’s ini­tial low­ball of­fer. Nev­er hap­py with the open­ing bid, Medi­va­tion had an ace in the hole: Pfiz­er ex­ecs al­most im­me­di­ate­ly be­gan to ea­ger­ly vol­un­teer their in­ter­est to get in­to the auc­tion. And de­ter­mined to get top dol­lar, Medi­va­tion in­vit­ed more com­pa­nies to join Pfiz­er and Sanofi at the bar­gain­ing ta­ble.

To keep them en­gaged as the num­bers raced high­er, Medi­va­tion drew up a set of long range fi­nan­cial fore­casts for three dif­fer­ent sce­nar­ios in­volv­ing Xtan­di, its ap­proved can­cer drug, as well as its PARP in­hibitor ta­la­zoparib and an­oth­er mys­tery drug in the pipeline called pidilizum­ab, a can­cer treat­ment that Medi­va­tion ini­tial­ly thought was a check­point ther­a­py un­til it was forced to con­clude it wasn’t sure ex­act­ly what the mech­a­nism of ac­tion was. By the time the of­fers be­gan to fly, though, it bare­ly war­rant­ed a men­tion.

Un­der Medi­va­tion’s three sce­nar­ios, the com­pa­ny pro­ject­ed that its ex­pect­ed 2016 rev­enue of $922 mil­lion could peak at be­tween $5.7 bil­lion and $8.5 bil­lion in 2027, a lit­tle more than a decade away. And mean­while, he and the Medi­va­tion team con­duct­ed a pub­lic cam­paign to per­suade the in­dus­try that ta­la­zoparib was a cer­tain block­buster-to-be, ca­pa­ble of gen­er­at­ing more rev­enue than Xtan­di it­self.

It was all wild­ly over the top, but Hung was pulling out all the stops.

Near­ing the close of the auc­tion, Medi­va­tion set an Au­gust 20 dead­line for all fi­nal of­fers, net­ting Pfiz­er’s win­ning $81.50 bid along with two oth­ers for $80.25 and $80. For the mas­ter deal­mak­er, known for bag­ging ma­jor league col­lab­o­ra­tions that didn’t al­ways pan out, it was an un­mis­tak­able win.

For Pfiz­er, there are still years of ex­plain­ing ahead as it at­tempts to jus­ti­fy pay­ing a price many an­a­lysts thought was way too high.

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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No­var­tis re­ports two pa­tient deaths af­ter treat­ment with Zol­gens­ma

Two children with spinal muscular atrophy have died after receiving Novartis’ Zolgensma, a gene therapy designed as a one-time treatment for the rare fatal disease.

The deaths, which resulted from acute liver failure, occurred in Russia and Kazakhstan, Novartis confirmed in a statement to Endpoints News. Having notified health authorities across all the markets where Zolgensma is available, it will update the drug label “to specify that fatal acute liver failure has been reported,” a spokesperson wrote.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.

CSL is gathering its four business units under a unified brand identity strategy (Credit: CSL company site)

CSL brings Se­qirus, Vi­for un­der par­ent um­brel­la brand in iden­ti­ty re­vamp

CSL is gathering its brands under the family name umbrella, renaming its vaccine and newly acquired nephrology specialty businesses with the parent initials.

CSL Seqirus and CSL Vifor join CSL Plasma and CSL Behring as the four now uniformly branded business units of the global biopharma. The Seqirus vaccine division was formed in 2015 with the combination of bioCSL and its purchase of Novartis’ flu vaccine business. CSL picked up Vifor Pharma late last year in an $11.7 billion deal for the nephrology, iron deficiency and cardio-renal drug developer.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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