As op­po­si­tion mounts against Cel­gene deal, Bris­tol-My­ers tells share­hold­ers the planned buy­out is the best bet in a scarce mar­ket

Fac­ing bru­tal op­po­si­tion against its planned $74 bil­lion ac­qui­si­tion of Cel­gene, Bris­tol-My­ers Squibb is now scram­bling to con­vince share­hold­ers that its takeover of the biotech — tar­nished by a poor per­for­mance un­der CEO Mark Alles — is in­deed a good idea.

In an open let­ter to share­hold­ers on Wednes­day, Bris­tol-My­ers $BMY made it clear that a Cel­gene $CELG buy­out was im­per­a­tive to rein­vig­o­rate its growth.

“Giv­en the scarci­ty of at­trac­tive biotech op­por­tu­ni­ties, high pre­mi­ums paid in bolt-on ac­qui­si­tions, a longer time­line and the like­li­hood of com­pet­i­tive auc­tions that re­duce the prob­a­bil­i­ty of pre­vail­ing, Bris­tol-My­ers Squibb de­ter­mined that ac­quir­ing Cel­gene’s Big-5 late-stage pipeline, plus its 22 Phase 1 and 2 clin­i­cal pro­grams, would rep­re­sent a bun­dled ‘string-of-pearls’ that in to­tal­i­ty of­fers a greater val­ue cre­ation op­por­tu­ni­ty than oth­er strate­gic al­ter­na­tives,” the com­pa­ny un­der­scored in bold.

It comes as no sur­prise that Bris­tol-My­ers is shop­ping. Its flag­ship im­muno-on­col­o­gy treat­ment Op­di­vo hasn’t quite lived up to sky-high ex­pec­ta­tions, ver­sus Mer­ck’s $MRK Keytru­da. But for the cav­al­ry of naysay­ers — Welling­ton Man­age­ment (Bris­tol-My­ers’ largest share­hold­er); Star­board (ac­tivist in­vestor who nabbed a 1 mil­lion-share stake in the lead up to the pro­posed trans­ac­tion) and Dodge & Cox (Bris­tol-My­ers’ 5th largest in­vestor that is re­port­ed­ly not keen ei­ther) — Cel­gene is hard­ly the an­swer. The large biotech is fac­ing a patent cliff with its cash cow Revlim­id, and the fu­ture of its top R&D prospects is un­cer­tain.

Bris­tol-My­ers, how­ev­er, is woo­ing its in­vestors on the ba­sis that the Cel­gene deal is the best bet out there in bio­phar­ma land, and has come with an “at­trac­tive price,” giv­en the breadth of Cel­gene’s port­fo­lio: “BRIS­TOL-MY­ERS SQUIBB + CEL­GENE = A POW­ER­FUL VAL­UE CRE­ATION OP­POR­TU­NI­TY FOR OUR SHARE­HOLD­ERS.” 

For the first time Bris­tol pub­licly pro­vid­ed the sums-of-the parts val­u­a­tion for the deal, not­ed Cred­it Su­isse’s Vi­mal Di­van. The com­pa­ny al­lo­cat­ed about $55 bil­lion for Cel­gene’s mar­ket­ed prod­ucts and more than $20 bil­lion for syn­er­gies, sug­gest­ing it is ac­quir­ing the “en­tire Cel­gene pipeline for a val­ue of ~$15 bil­lion,” Di­van wrote in a note.

Ac­tivist in­vestor Star­board has sug­gest­ed that Bris­tol-My­ers could be­come a tempt­ing takeover tar­get in its own right if they drop the Cel­gene deal. For Bris­tol-My­ers share­hold­ers the ques­tion is whether they should set­tle for Cel­gene, or hope for some­thing bet­ter to come along.

For Bar­clay’s Ge­off Meacham the Cel­gene deal is a ra­tio­nal move by Bris­tol-My­ers.

“Be­yond the lack of al­ter­na­tives that could pro­vide a sim­i­lar lev­el of up­side to the pro­posed deal (we note that the op­pos­ing share­hold­ers have not come for­ward with any sort of con­crete Plan B, with no over-the-top bid­ders in sight), we think the fi­nan­cial terms of the deal are very fa­vor­able and we’d char­ac­ter­ize the Cel­gene pipeline as quite strong and fair­ly de-risked al­ready. For ex­am­ple, the re­cent ac­cep­tance of the fe­dra­tinib and award of pri­or­i­ty re­view shows that Cel­gene is ex­e­cut­ing from a reg­u­la­to­ry per­spec­tive,” Meacham wrote in a note on Wednes­day.

“Ul­ti­mate­ly, bar­ring a re­al­is­tic al­ter­na­tive ca­pa­ble of pro­vid­ing sim­i­lar ma­te­r­i­al up­side, we ex­pect the ma­jor­i­ty of share­hold­ers to vote in fa­vor of the deal April 12th, giv­en we con­tin­ue to see strong strate­gic and fi­nan­cial ra­tio­nale to sup­port the trans­ac­tion.”

Dan O'Day, Gilead CEO (Andrew Harnik, AP Images)

UP­DAT­ED: Gilead leas­es part­ner rights to TIG­IT, PD-1 in a $2B deal with Ar­cus. Now comes the hard part

Gilead CEO Dan O’Day has brokered his way to a PD-1 and lined up a front row seat in the TIGIT arena, inking a deal worth close to $2 billion to align the big biotech closely with Terry Rosen’s Arcus. And $375 million of that comes upfront, with cash for the buy-in plus equity, along with $400 million for R&D and $1.22 billion in reserve to cover opt-in payments and milestones..

Hotly rumored for weeks, the 2 players have formalized a 10-year alliance that starts with rights to the PD-1, zimberelimab. O’Day also has first dibs on TIGIT and 2 other leading programs, agreeing to an opt-in fee ranging from $200 million to $275 million on each. There’s $500 million in potential TIGIT milestones on US regulatory events — likely capped by an approval — if Gilead partners on it and the stars align on the data. And there’s another $150 million opt-in payments for the rest of the Arcus pipeline.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

Sanofi brings in 4 new ex­ec­u­tives in con­tin­ued shake-up, as vac­cines and con­sumer health chief head out the door

In the middle of Sanofi’s multi-pronged race to develop a Covid-19 vaccine, David Loew, the head of their sprawling vaccines unit, is leaving – part of the final flurry of moves in the French giant’ months-long corporate shuffle that will give them new-look leadership under new CEO Paul Hudson.

The company also said today that Alan Main, the head of their consumer healthcare unit, is out, and they named 4 executives to fill new or newly vacated positions, 3 of whom come from both outside both Sanofi and from Pharma.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

As­traZeneca trum­pets the 'mo­men­tous' da­ta they found for Tagris­so in an ad­ju­vant set­ting for NSCLC — but many of the ex­perts aren’t cheer­ing along

AstraZeneca is rolling out the big guns this evening to provide a salute to their ADAURA data on Tagrisso at ASCO.

Cancer R&D chief José Baselga calls the disease-free survival data for their drug in an adjuvant setting of early stage, epidermal growth factor receptor-mutated NSCLC patients following surgery “momentous.” Roy Herbst, the principal investigator out of Yale, calls it “transformative.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

Pablo Legorreta, founder and CEO of Royalty Pharma AG, speaks at the annual Milken Institute Global Conference in Beverly Hills, California (Patrick T. Fallon/Bloomberg via Getty Images)

Cap­i­tal­iz­ing Pablo: The world’s biggest drug roy­al­ty buy­er is go­ing pub­lic. And the low-key CEO di­vulges a few se­crets along the way

Pablo Legorreta is one of the most influential players in biopharma you likely never heard of.

Over the last 24 years, Legorreta’s Royalty Pharma group has become, by its own reckoning, the biggest buyer of drug royalties in the world. The CEO and founder has bought up a stake in a lengthy list of the world’s biggest drug franchises, spending $18 billion in the process — $2.2 billion last year alone. And he’s become one of the best-paid execs in the industry, reaping $28 million from the cash flow last year while reserving 20% of the cash flow, less expenses, for himself.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

Ab­b­Vie wins an ap­proval in uter­ine fi­broid-as­so­ci­at­ed heavy bleed­ing. Are ri­vals My­ovant and Ob­sE­va far be­hind?

Women expel on average about 2 to 3 tablespoons of blood during their time of the month. But with uterine fibroids, heavy bleeding is typical — a third of a cup or more. Drugmakers have been working on oral therapies to try and stem the flow, and as expected, AbbVie and their partners at Neurocrine Biosciences are the first to make it across the finish line.

Known chemically as elagolix, the drug is already approved as a treatment for endometriosis under the brand name Orilissa. It targets the GnRH receptor to decrease the production of estrogen and progesterone.

Paul Hudson, Sanofi CEO (Getty Images)

Sanofi CEO Paul Hud­son has $23B burn­ing a hole in his pock­et. And here are some hints on how he plans to spend that

Sanofi has reaped $11.1 billion after selling off a big chunk of its Regeneron stock at $515 a share. And now everyone on the M&A side of the business is focused on how CEO Paul Hudson plans to spend it.

After getting stung in France for some awkward politicking — suggesting the US was in the front of the line for Sanofi’s vaccines given American financial support for their work, versus little help from European powers — Hudson now has the much more popular task of managing a major cash cache to pull off something in the order of a big bolt-on. Or two.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

Roger Perlmutter, Merck R&D chief (YouTube)

Backed by BAR­DA, Mer­ck jumps in­to Covid-19: buy­ing out a vac­cine, part­ner­ing on an­oth­er and adding an­tivi­ral to the mix

Merck execs are making a triple play in a sudden leap into the R&D campaign against Covid-19. And they have more BARDA cash backing them up on the move.

Tuesday morning the pharma giant simultaneously announced plans to buy an Austrian biotech that has been working on a preclinical vaccine candidate, added a collaboration on another vaccine with the nonprofit IAVI and inked a deal with Ridgeback Biotherapeutics on an early-stage antiviral.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 81,900+ biopharma pros reading Endpoints daily — and it's free.

As­traZeneca’s $7B ADC suc­ceeds where Roche failed, im­prov­ing sur­vival in gas­tric can­cer

Another day, another win for Enhertu.

The antibody-drug conjugate AstraZeneca promised up-to $7 billion to partner on has had a quite a few months, beginning with splashy results in a Phase II breast cancer trial, a rapid approval and, earlier this month, breakthrough designations in both non-small cell lung cancer and gastric cancer.

Now, at ASCO, the British pharma and their Japanese partner, Daiichi Sankyo, have shown off the data that led to the gastric cancer designation, which they’ll take back to the FDA. In a pivotal, 187-person Phase II trial, Enhertu shrunk tumors in 42.9% of third-line patients with HER2-positive stomach cancer, compared with 12.5% in a control arm where doctors prescribed their choice of therapy. Progression-free survival was 5.4 months for Enhertu compared to 3.5 months for the control.

Once a gem, now just a rock, Take­da punts PhI­II IBD drug as ri­vals mus­cle ahead

Back in 2016, when then-Shire CEO Flemming Ørnskov picked up a promising clinical-stage IBD drug from Pfizer, the Boston-based biotech dubbed it SHP647 and moved it into the gem section of the pipeline, with rosy expectations of registration-worthy Phase III data ahead.

This was a drug that the EC wanted Takeda to commit to selling off before it gave their blessing to its acquisition of Shire, to settle some deep-seated concerns revolving around the potential market overlap with their blockbuster rival Entyvio. And Takeda, which took on a heavy debt load to buy Shire, clearly wanted the cash to pay down debt.