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.

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

Fresh off Fer­Gene's melt­down, David Meek takes over at Mi­rati with lead KRAS drug rac­ing to an ap­proval

In the insular world of biotech, a spectacular failure can sometimes stay on any executive’s record for a long time. But for David Meek, the man at the helm of FerGene’s recent implosion, two questionable exits made way for what could be an excellent rebound.

Meek, most recently FerGene’s CEO and a past head at Ipsen, has become CEO at Mirati Therapeutics, taking the reins from founding CEO Charles Baum, who will step over into the role of president and head of R&D, according to a release.

Jacob Van Naarden (Eli Lilly)

Ex­clu­sives: Eli Lil­ly out to crash the megablock­buster PD-(L)1 par­ty with 'dis­rup­tive' pric­ing; re­veals can­cer biotech buy­out

It’s taken 7 years, but Eli Lilly is promising to finally start hammering the small and affluent PD-(L)1 club with a “disruptive” pricing strategy for their checkpoint therapy allied with China’s Innovent.

Lilly in-licensed global rights to sintilimab a year ago, building on the China alliance they have with Innovent. That cost the pharma giant $200 million in cash upfront, which they plan to capitalize on now with a long-awaited plan to bust up the high-price market in lung cancer and other cancers that have created a market worth tens of billions of dollars.

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Jay Bradner (Jeff Rumans for Endpoints News)

Div­ing deep­er in­to in­her­it­ed reti­nal dis­or­ders, No­var­tis gob­bles up an­oth­er bite-sized op­to­ge­net­ics biotech

Right about a year ago, a Novartis team led by Jay Bradner and Cynthia Grosskreutz at NIBR swooped in to scoop up a Cambridge, MA-based opthalmology gene therapy company called Vedere. Their focus was on a rather narrow market niche: inherited retinal dystrophies that include a wide range of genetic retinal disorders marked by the loss of photoreceptor cells and progressive vision loss.

But that was just the first deal that whet their appetite.

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FDA hands ac­cel­er­at­ed nod to Seagen, Gen­mab's so­lo ADC in cer­vi­cal can­cer, but com­bo stud­ies look even more promis­ing

Biopharma’s resident antibody-drug conjugate expert Seagen has scored a clutch of oncology approvals in recent years, finding gold in what are known as “third-gen” ADCs. Now, another of their partnered conjugates is ready for prime time.

The FDA on Monday handed an accelerated approval to Seagen and Genmab’s Tivdak (tisotumab vedotin-tftv, or “TV”) in second-line patients with recurrent or metastatic cervical cancer who previously progressed after chemotherapy rather than PD-(L)1 systemic therapy, the companies said in a release.

Dave Lennon, former president of Novartis Gene Therapies

Zol­gens­ma patent spat brews be­tween No­var­tis and Re­genxbio as top No­var­tis gene ther­a­py ex­ec de­parts

Regenxbio, a small licensor of gene therapy viral vectors spun out from the University of Pennsylvania, is now finding itself in the middle of some major league patent fights.

In addition to a patent suit with Sarepta Therapeutics from last September, Novartis, is now trying to push its smaller partner out of the way. The Swiss biopharma licensed Regenxbio’s AAV9 vector for its $2.1 million spinal muscular atrophy therapy Zolgensma.

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Volker Wagner (L) and Jeff Legos

As Bay­er, No­var­tis stack up their ra­dio­phar­ma­ceu­ti­cal da­ta at #ES­MO21, a key de­bate takes shape

Ten years ago, a small Norwegian biotech by the name of Algeta showed up at ESMO — then the European Multidisciplinary Cancer Conference 2011 — and declared that its Bayer-partnered targeted radionuclide therapy, radium-223 chloride, boosted the overall survival of castration-resistant prostate cancer patients with symptomatic bone metastases.

In a Phase III study dubbed ALSYMPCA, patients who were treated with radium-223 chloride lived a median of 14 months compared to 11.2 months. The FDA would stamp an approval on it based on those data two years later, after Bayer snapped up Algeta and christened the drug Xofigo.

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Rafaèle Tordjman (Jeito Capital)

Con­ti­nu­ity and di­ver­si­ty: Rafaèle Tord­j­man's women-led VC firm tops out first fund at $630M

For a first-time fund, Jeito Capital talks a lot about continuity.

Rafaèle Tordjman had spotlighted that concept ever since she started building the firm in 2018, promising to go the extra mile(s) with biotech entrepreneurs while pushing them to reach patients faster.

Coincidentally, the lack of continuity was one of the sore spots listed in a report about the European healthcare sector published that same year by the European Investment Bank — whose fund is one of the LPs, alongside the American pension fund Teacher Retirement System of Texas and Singapore’s Temasek, to help Jeito close its first fund at $630 million (€534 million). As previously reported, Sanofi had chimed in €50 million, marking its first investment in a French life sciences fund.

Mi­rati tri­umphs again in KRAS-mu­tat­ed lung can­cer with a close­ly watched FDA fil­ing now in the cards

After a busy weekend at #ESMO21, which included a big readout for its KRAS drug adagrasib in colon cancer, Mirati Therapeutics is ready to keep the pressure on competitor Amgen with lung cancer data that will undergird an upcoming filing.

In topline results from a Phase II cohort of its KRYSTAL-1 study, adagrasib posted a response rate of 43% in second-line-or-later patients with metastatic non-small cell lung cancer containing a KRAS-G12C mutation, Mirati said Monday.