UP­DAT­ED: An­oth­er big CRO deal has land­ed as Ther­mo Fish­er ac­quires PPD for $17.4B

Con­sol­i­da­tion among big CRO play­ers is con­tin­u­ing to churn.

Fol­low­ing a Wednes­day af­ter­noon re­port from the Wall Street Jour­nal say­ing a deal was close, Ther­mo Fish­er has an­nounced plans to ac­quire PPD for $17.4 bil­lion. WSJ had re­port­ed that the par­ties could wrap up an agree­ment as soon as this week. It’s the sec­ond CRO M&A deal in as many months, fol­low­ing the Icon-PRA Health Sci­ences deal in late Feb­ru­ary.

Thurs­day morn­ing, Ther­mo Fish­er an­nounced the trans­ac­tion would ac­count for $17.4 bil­lion in cash plus an as­sump­tion of about $3.5 bil­lion in net debt. That to­tal rep­re­sents a per share price of $47.50, good for a 24% pre­mi­um on PPD’s clos­ing price from Tues­day af­ter­noon.

In a state­ment, Ther­mo Fish­er CEO Marc Casper said:

Phar­ma and Biotech is our largest and fastest grow­ing end mar­ket, and our cus­tomers val­ue us as a strate­gic part­ner and an in­dus­try leader. The ac­qui­si­tion of PPD is a nat­ur­al ex­ten­sion for Ther­mo Fish­er and will en­able us to pro­vide these cus­tomers with im­por­tant clin­i­cal re­search ser­vices and part­ner with them in new and ex­cit­ing ways as they move a sci­en­tif­ic idea to an ap­proved med­i­cine quick­ly, re­li­ably and cost ef­fec­tive­ly. Longer term, we plan to con­tin­ue to in­vest in and con­nect the ca­pa­bil­i­ties across the com­bined com­pa­ny to fur­ther help our cus­tomers ac­cel­er­ate in­no­va­tion and dri­ve pro­duc­tiv­i­ty, while dri­ving fur­ther val­ue for our share­hold­ers.

In the wake of WSJ’s re­port, PPD $PPD shares rose 12% be­fore the mar­ket closed Wednes­day af­ter­noon, and it was up an­oth­er 3% af­ter hours. Ther­mo Fish­er’s stock $TMO had large­ly been down for the day and closed down 1.4%.

As part of the merg­er there were lots of cost “syn­er­gies” that Ther­mo Fish­er plans to re­al­ize — like­ly re­sult­ing in sig­nif­i­cant cuts over the next three years. Ther­mo Fish­er said it plans to save $75 mil­lion over that time pe­ri­od from cuts. They al­so ex­pect an ad­di­tion­al $50 mil­lion in “rev­enue-re­lat­ed syn­er­gies.”

Ther­mo Fish­er is hard­ly new to these types of deals, com­ing a long way from its start as an R&D in­stru­ments and ma­te­ri­als com­pa­ny sell­ing things like lab equip­ment. Back in 2017, Ther­mo Fish­er bought Patheon — a ma­jor con­tract man­u­fac­tur­er — to start pro­vid­ing clin­i­cal tri­al ser­vices and lo­gis­tics.

Then last month, the com­pa­ny dropped $600 mil­lion to shore up its man­u­fac­tur­ing sup­ply chain in the wake of a sharp rise in Covid-19 work. Funds were di­rect­ed to­ward its short-term Covid-19 projects and more than dou­ble its ca­pac­i­ty for the fu­ture.

Though tak­en pri­vate about a decade ago, PPD went pub­lic again in Feb­ru­ary 2020 in a $1.62 bil­lion IPO that at the time was the largest of the year. The com­pa­ny had been look­ing to cap­i­tal­ize not on­ly on an in­crease in out­sourc­ing and R&D spend­ing, but growth in the biotech sec­tor as a whole.

Most of the IPO funds went to­ward re­deem­ing bonds, which were is­sued in a re­cap­i­tal­iza­tion project en­gi­neered by its biggest pri­vate eq­ui­ty back­ers in 2017, its S-1 said. In ad­di­tion to its role as a CRO, PPD al­so of­fers lab­o­ra­to­ry ser­vices.

Con­tract re­search M&A had seen sig­nif­i­cant moves sev­er­al years ago, but large­ly cooled off in the years lead­ing up to the pan­dem­ic. That all changed in Feb­ru­ary with the Icon-PRA deal, a merg­er that com­bined the 5th- and 6th-largest CROs by 2020 rev­enue to cre­ate the 2nd-biggest CRO. The cash and stock deal to­taled rough­ly $12 bil­lion.

How Pa­tients with Epilep­sy Ben­e­fit from Re­al-World Da­ta

Amanda Shields, Principal Data Scientist, Scientific Data Steward

Keith Wenzel, Senior Business Operations Director

Andy Wilson, Scientific Lead

Real-world data (RWD) has the potential to transform the drug development industry’s efforts to predict and treat seizures for patients with epilepsy. Anticipating or controlling an impending seizure can significantly increase quality of life for patients with epilepsy. However, because RWD is secondary data originally collected for other purposes, the challenge is selecting, harmonizing, and analyzing the data from multiple sources in a way that helps support patients.

$DNA is once again on NYSE; FDA clears Soliris chal­lenger for the mar­ket; Flag­ship’s think­ing big again with eR­NA; 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.

I still remember the uncertainty in the air last year when nobody was sure whether ASCO would cancel their in-person meeting. But it’s now back again for the second virtual conference, and Endpoints News is here for it. Check out our 2-day event reviewing the landscape of cancer R&D and send news our way.

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Gene ther­a­py from Bio­gen's $800M buy­out flops in mid-stage study, deal­ing blow to new am­bi­tions

The #2 candidate from Biogen’s $800 million ocular gene therapy buyout has failed in a mid-stage trial, dealing an early blow to the big biotech’s plans to revitalize its pipeline with new technologies.

Biogen announced that the candidate, an experimental treatment for a rare and progressive form of blindness called X-linked retinitis pigmentosa (XLRP), failed to sufficiently improve vision in patients’ treated eye — patients only received an injection in one eye — after a year, on a standard scale, compared to their untreated eye. The company said they saw “positive trends” on several secondary endpoints, including visual acuity, but declined to say whether the trial actually hit any of those endpoints.

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Vas Narasimhan (Photographer: Simon Dawson/Bloomberg via Getty Images)

No­var­tis whiffs on En­tresto study af­ter heart at­tacks — but that does­n't mean it's go­ing down qui­et­ly

If Novartis learned one thing from its interaction with the FDA over its latest heart failure approval for Entresto, it was that missing a primary endpoint may not be the nail in the coffin. Now, Entresto has missed again on a late-stage study in high-risk heart patients, and it’s already sowing the seeds for a path forward regardless.

Novartis’ Entresto couldn’t best standard-of-care ramipril in staving off a composite of deaths and heart failure events in patients with left ventricular systolic dysfunction and/or pulmonary congestion who have had a prior heart attack, according to topline data from the Phase III PARADISE-MI study revealed Saturday at the virtual American College of Cardiology meeting.

Michael Dell (Richard Drew, AP Images)

'Dude, you're get­ting a Del­l' — as a new deep-pock­et biotech in­vestor

What happens when you marry longtime insiders in the global biotech VC game with the family fund of tech billionaire Michael Dell, a synthetic biology legend out of MIT and Harvard and the former director of the NCI?

Today, the answer is a newly financed, $200 million biotech SPAC now cruising the industry for a top player interested in finding a short cut to Nasdaq.

Orion Biotech Opportunities priced their blank check company today, raising $200 million with Dell’s multibillion-dollar MSD group’s commitment on investing another $20 million in a forward-purchase agreement.

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BAR­DA slows its $9B en­gine for new Covid-19 ther­a­peu­tics

The Biomedical Advanced Research and Development Authority is cooling its jets in looking for new, potential Covid-19 treatments, at least in the near term.

An HHS spokesperson told Endpoints News via email, “to date, BARDA has obligated more than $9 billion for the development and/or purchase of 13 therapeutics, beginning in February 2020 with support to develop Regeneron’s monoclonal antibody therapeutic. Therapeutics are an important element of the COVID-19 response, and we are focused on the programs currently underway and/or in negotiation using the funds available to us.”

Bris­tol My­ers backs up its case for heart drug mava­camten as FDA weighs app in car­diomy­opa­thy

When Bristol Myers Squibb signed off on its $13 billion acquisition of MyoKardia back in October, it was making a big bet that lead drug mavacamten could prove a game changer in cardiac myopathy. Now, with the drug up for FDA review, Bristol Myers is backing up its case with new quality of life data.

Patients dosed with myosin inhibitor mavacamten posted a clinically significant increase in scores on the Kansas City Cardiomyopathy Questionnaire, a catch-all summary of symptoms and quality of life markers, over placebo at 30 weeks, according to data from the Phase III EXPLORER-HCM study presented Saturday at the virtual American College of Cardiology meeting.

Prahlad Singh, PerkinElmer

PerkinElmer hits the check­book again, this time dol­ing out $260M for next-gen ther­a­py bioser­vices firm

When PerkinElmer iced a deal to pick up UK gene editing firm Horizon Discovery, it trumpeted its big move into next-gen therapeutics. Now, not content to sit on its laurels, PerkinElmer is dipping into the war chest again, this time for a firm specializing in cutting-edge bioservices.

Life sciences services giant PerkinElmer will shell out $260 million to acquire Lawrence, MA-based Nexcelom Bioscience, which offers clinical services for next-gen cell and gene therapies, immuno-oncology drugs and vaccines, the companies said Thursday.

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UP­DAT­ED: Apel­lis bags FDA nod for Soliris chal­lenger with a dif­fer­ent path­way to PNH — but can it slay the gi­ant?

With a blockbuster rare disease giant in its sights in Alexion’s Soliris, small biotech Apellis has reason to think its competitor is worthy of the spotlight. Now, with the FDA on its side, Apellis will get its chance to be the David to Alexion’s Goliath.

The FDA on Friday approved Empaveli (pegcetacoplan), a C3 complement inhibitor the biotech thinks can prove a worthy challenger to Alexion’s C5 inhibitors Soliris and follow-up drug Ultomiris in rare disease paroxysmal nocturnal hemoglobinuria (PNH).