Anato­my of a $9B buy­out: Cel­gene’s quick turn from Juno’s close col­lab­o­ra­tor to new own­er

Hans Bish­op

It turns out that Au­gust 28 was a red let­ter day for more than Kite or Gilead $GILD, which grabbed the in­dus­try’s at­ten­tion with their an­nounced buy­out deal for $12 bil­lion in cash. The same day as the head­lines hit, Juno CEO Hans Bish­op and CFO Steven Harr had a lit­tle chat about their up­com­ing meet­ing with some of the lead­ers at Cel­gene $CELG, a close part­ner that owned right at 10% of its shares.

Maybe some strate­gic op­tions would be dis­cussed, they thought. Maybe Mor­gan Stan­ley ought to get roped in — just in case.

Mark Alles

A lit­tle more than three weeks lat­er, Juno ex­plained in an SEC fil­ing, Bish­op and Harr got to­geth­er with Cel­gene CEO Mark Alles and chief deal­mak­er George Golumbes­ki. Maybe, sug­gest­ed Alles and Golumbes­ki, they might want to talk about a buy­out.

No num­bers were dis­cussed.

So Bish­op took that to the board a few days lat­er. But they had more to dis­cuss than Cel­gene’s over­ture. Dur­ing Sep­tem­ber, they had al­so been con­tact­ed by an­oth­er com­pa­ny that was in­ter­est­ed in part­ner­ing with Juno on its new­ly emerg­ing BC­MA pro­gram, which Cel­gene — al­ready part­nered with blue­bird on BC­MA — hadn’t tied up.

Par­ty A, it turned out, was al­so ready to ex­pand its dis­cus­sions from a part­ner­ship in­to a broad­er strate­gic trans­ac­tion. And on Oc­to­ber 5, Juno had the mak­ings of an auc­tion, even though its ex­ecs would lat­er say specif­i­cal­ly that no auc­tion was un­der­way.

Steven Harr

A month lat­er, Par­ty A came by for a tour and a chat about its in­ter­est in BC­MA, again sug­gest­ing a will­ing­ness to en­ter in­to M&A talks. And a few days af­ter that, their strate­gic com­mit­tee asked Cel­gene and Par­ty A to get down to brass tacks, and start talk­ing about what kind of val­u­a­tion they were giv­ing Juno.

Alles got the bid­ding start­ed on No­vem­ber 16, float­ing an $80 per share of­fer­ing but sig­nal­ing they could go high­er. The Juno board agreed that $80 wasn’t enough to war­rant the launch of a due dili­gence ef­fort.

Alles balked at that, not want­i­ng to go past $80 ahead of due dili­gence, and he and Bish­op agreed to get to­geth­er at ASH for a chat.

On No­vem­ber 22, Par­ty A was still in­ter­est­ed, but hadn’t men­tioned a fig­ure. I’ll take this next part of the ne­go­ti­a­tions straight from the SEC docs:

Mr. Bish­op re­spond­ed that Juno was not con­duct­ing an auc­tion process, but that an­oth­er par­ty was in­ter­est­ed in po­ten­tial­ly pur­su­ing an ac­qui­si­tion trans­ac­tion for Juno.

On De­cem­ber 5 Par­ty A tried to turn the con­ver­sa­tion back to a BC­MA part­ner­ship, but Harr made it clear that that wasn’t go­ing any­where. Par­ty A said it was still in­ter­est­ed in a broad­er trans­ac­tion.

George Golumbes­ki

Then, on a snowy win­ter day on De­cem­ber 10, Alles and Golumbes­ki met with Bish­op and Harr in At­lanta dur­ing ASH. A board meet­ing was com­ing up at Cel­gene, Alles told them, where they would be dis­cussing CAR-T. What kind of num­ber did they have in mind to get buy­out talks se­ri­ous­ly on track and due dili­gence un­der­way?

The an­swer, it turned out a few days lat­er, was $86 a share. That was good enough to get Cel­gene to the bar­gain­ing ta­ble for a close­up of Juno’s in­side work­ings, and af­ter telling Par­ty A it was time to make an of­fer if it was in­ter­est­ed, Par­ty A took a hike on De­cem­ber 21. From the fil­ing:

On De­cem­ber 21, 2017, Par­ty A in­formed Dr. Harr that it was not in­ter­est­ed in a BC­MA part­ner­ship or ac­qui­si­tion of Juno at this time. Dr. Harr in­formed the Strate­gic Com­mit­tee of this out­come on the same day.

Per­haps not co­in­ci­den­tal­ly, that was the same day J&J an­nounced a $350 mil­lion cash deal to part­ner with Chi­na’s Leg­end on their BC­MA CAR-T pro­gram.

That left Cel­gene alone at the bar­gain­ing ta­ble, pur­su­ing talks where Golumbes­ki had iden­ti­fied 4 key ar­eas of in­ter­est: “1) Juno’s BC­MA pro­gram; (2) JCAR017 (now al­so known as liso-cel); (3) Juno’s pro­ject­ed cost of goods; and (4) the pro­ject­ed val­ue of Juno’s in­fringe­ment law­suit against Kite Phar­ma.”

The talks went on in­to ear­ly Jan­u­ary, with Bish­op get­ting a $20 mil­lion com­mit­ment from Cel­gene for a bonus pool for Juno staffers which he would per­son­al­ly di­rect.

On Jan­u­ary 16, the Wall Street Jour­nal nailed the talks, and Juno’s shares shot up. But then Cel­gene tried to in­tro­duce the idea of a buy­out price tied to con­tin­gent val­ue rights for a mile­stones.

Juno was not in­ter­est­ed in a CVR deal.

Three days lat­er, Juno sug­gest­ed that Cel­gene might want to of­fer $88 a share. Alles came back with $87. And with no oth­er po­ten­tial buy­er mak­ing a bid, that’s what the deal closed at.

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

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Game on: Re­gen­eron's BC­MA bis­pe­cif­ic makes clin­i­cal da­ta de­but, kick­ing off mul­ti­ple myelo­ma matchup with Bris­tol-My­ers

As J&J attempts to jostle past Bristol-Myers Squibb and bluebird for a landmark approval of its anti-BCMA CAR-T — and while GlaxoSmithKline maps a quick path to the FDA riding on its own BCMA-targeting antibody-drug conjugates — the bispecifics are arriving on the scene to stake a claim for a market that could cross $10 billion per year.

The main rivalry in multiple myeloma is shaping up to be one between Regeneron and Bristol-Myers, which picked up a bispecific antibody to BCMA through its recently closed $74 billion takeover of Celgene. Both presented promising first-in-human data at the ASH 2019 meeting.

FDA lifts hold on Abeon­a's but­ter­fly dis­ease ther­a­py, paving way for piv­otal study

It’s been a difficult few years for gene and cell therapy startup Abeona Therapeutics. Its newly crowned chief Carsten Thiel was forced out last year following accusations of unspecified “personal misconduct,” and this September, the FDA imposed a clinical hold on its therapy for a form of “butterfly” disease. But things are beginning to perk up. On Monday, the company said the regulator had lifted its hold and the experimental therapy is now set to be evaluated in a late-stage study.

Paul Hudson. Sanofi

New Sanofi CEO Hud­son adds next-gen can­cer drug tech to the R&D quest, buy­ing Syn­thorx for $2.5B

When Paul Hudson lays out his R&D vision for Sanofi tomorrow, he will have a new slate of interleukin therapies and a synthetic biology platform to boast about.

The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

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Roche faces an­oth­er de­lay in strug­gle to nav­i­gate Spark deal past reg­u­la­tors — but this one is very short

Roche today issued the latest in a long string of delays of its $4.3 billion buyout of Philadelphia-based Spark Therapeutics. The delay comes as little surprise — it is their 10th in as many months — as their most recent delay was scheduled to expire before a key regulatory deadline.

But it is notable for its length: 6 days.

Previous extensions had moved the goalposts by about 3 weeks to a month, with the latest on November 22 expiring tomorrow. The new delay sets a deadline for next Monday, December 16, the same day by which the UK Competition and Markets Authority has to give its initial ruling on the deal. And they already reportedly have lined up an OK from the FTC staff – although that’s only one level of a multi-step process.

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KalVis­ta's di­a­bet­ic mac­u­lar ede­ma da­ta falls short — will Mer­ck walk away?

Merck’s 2017 bet on KalVista Pharmaceuticals may have soured, after the UK/US-based biotech’s lead drug failed a mid-stage study in patients with diabetic macular edema (DME).

Two doses of the intravitreal injection, KVD001, were tested against a placebo in a 129-patient trial. Patients who continued to experience significant inflammation and diminished visual acuity, despite anti-VEGF therapy, were recruited to the trial. Typically patients with DME — the most frequent cause of vision loss related to diabetes — are treated with anti-VEGF therapies such as Regeneron’s flagship Eylea or Roche’s Avastin and Lucentis.

UP­DAT­ED: Ob­sE­va makes case for best-in-class hor­mone sup­pres­sive ther­a­py in pos­i­tive uter­ine fi­broid study

About a month after the Swiss biotech disclosed a failed late-stage study in its IVF program, ObsEva on Monday unveiled positive pivotal data on its experimental treatment for heavy menstrual bleeding triggered by uterine fibroids.

ObsEva in-licensed the drug, linzagolix, from Japan’s Kissei Pharmaceutical in 2015. Two doses of the drug (100 mg and 200 mg) were tested against a placebo in the 535-patient Phase III study, dubbed PRIMROSE 2, in patients who were both on and off hormonal add-back therapy (ABT).

Ear­ly-stage can­cer biotech nails $85M C round; Flem­ming Orn­skov's Gal­der­ma scores 'break­through' sta­tus

→ Zentalis Pharmaceuticals just nabbed an $85 million round from a syndicate that includes Matrix Capital, Viking Global Investors, Redmile Group, Farallon Capital, Perceptive Advisors, Surveyor Capital and Eventide Asset Management. Their lead drug is ZN-c5, which is currently in Phase I/II trials. The biotech describes that drug as a “potential best-in-class oral Selective Estrogen Receptor Degrader for estrogen receptor-positive, HER2-negative (ER+/ HER2-) breast cancer.”