Be­hind the scenes of J&J’s $30B Acte­lion buy­out: Walk­outs, Sanofi’s blun­der and a $230M sweet­en­er

Sanofi may un­der­stand how to jump in­to a buy­out ne­go­ti­a­tion, but they still have a long way to go be­fore un­der­stand­ing how to close a big deal.

Joaquin Du­a­to (Cred­it: End­points News)

In a prospec­tus pub­lished ear­ly to­day, Acte­lion ex­plained how J&J’s Joaquin Du­a­to and Paul Stof­fels first broached a deal at the be­gin­ning of 2016, push­ing past a col­lab­o­ra­tion counter of­fer to ad­vance takeover talks right to the end of the year. And af­ter a tem­po­rary rup­ture, J&J came back to win the deal with a $30 bil­lion bid and a rich $230 mil­lion pact on an ex­per­i­men­tal ther­a­py that the Acte­lion board is spin­ning in­to a new com­pa­ny.

Last De­cem­ber, the French phar­ma gi­ant Sanofi was wide­ly iden­ti­fied as the big play­er that man­aged to push J&J away from ne­go­ti­a­tions that had ac­tu­al­ly be­gun at the start of 2016. Iden­ti­fied on­ly as Com­pa­ny A in J&J’s new­ly filed prospec­tus, Sanofi CEO Olivi­er Brandi­court came in with a high­er bid that J&J was un­will­ing to match. But af­ter J&J took its check­book and walked, Sanofi made a tac­ti­cal blun­der. From the prospec­tus:

Com­pa­ny A (Sanofi) in­di­cat­ed that it would on­ly be will­ing to pro­ceed with a trans­ac­tion on the ba­sis of a price low­er than its pre­vi­ous­ly com­mu­ni­cat­ed of­fer price and on dif­fer­ent terms, and that Com­pa­ny A had ex­ten­sive due dili­gence re­quests with re­spect to Acte­lion and its busi­ness. Lat­er that day, the Board of Di­rec­tors, with rep­re­sen­ta­tives of Nieder­er Kraft & Frey in at­ten­dance, con­sid­ered the nom­i­nal­ly high­er in­dica­tive price pro­posed by Com­pa­ny A, as well as the tenor and con­tent of man­age­ment’s meet­ings with Com­pa­ny A. Af­ter dis­cussing the sig­nif­i­cant un­cer­tain­ty pre­sent­ed by a po­ten­tial trans­ac­tion with Com­pa­ny A and the like­li­hood that a trans­ac­tion could ul­ti­mate­ly be reached with J&J at a de­sir­able price, the Board of Di­rec­tors au­tho­rized Mr. Gar­nier to re-en­gage with J&J be­cause the Board of Di­rec­tors con­sid­ered that this path was more like­ly to re­sult in a trans­ac­tion that would max­i­mize val­ue for Acte­lion and its share­hold­ers.

Even though the two fi­nal bids were al­most equiv­a­lent, Acte­lion de­cid­ed to stick with J&J CEO Alex Gorsky, who they trust­ed more, and Sanofi was shoved away for the last time. That was Sanofi’s sec­ond mis­take at the deal ta­ble. Pfiz­er had al­ready mus­cled past the com­pa­ny in its $14 bil­lion ac­qui­si­tion of Medi­va­tion.

In the end, Acte­lion split up the com­pa­ny, sell­ing the port­fo­lio of mar­ket­ed drugs while part­ner­ing on a pipeline that is spin­ning out in­to a new com­pa­ny with a bil­lion dol­lars in liq­uid­i­ty and some rich deal terms.

The prospec­tus al­so re­vealed that J&J has agreed to pay $230 mil­lion in cash to opt in on ACT 132577 — a metabo­lite of maci­ten­tan — at the end of an on­go­ing Phase II, pro­vid­ed they like the da­ta. If they do, then the two com­pa­nies will share de­vel­op­ment rights with a roy­al­ty for New­Co that starts at 20% and reach­es up to 35%.

As al­ready an­nounced, pones­i­mod and cada­zol­id, two late-stage pipeline prod­ucts, re­main with Acte­lion fol­low­ing the spin­out with a rev­enue shar­ing agree­ment in place with J&J.

Pi­o­neer­ing Click Chem­istry in Hu­mans

Reimagining cancer treatments

Cancer is a leading cause of death worldwide, accounting for nearly 10 million deaths in 2020, which is nearly one in six deaths. Recently, we have seen incredible advances in novel cancer therapies such as immune checkpoint inhibitors, cell therapies, and antibody-drug conjugates that have revamped cancer care and improved survival rates for patients.

Despite this significant progress in therapeutic targeting, why are we still seeing such a high mortality rate? The reason is that promising therapies are often limited by their therapeutic index, which is a measure of the effective dose of a drug, relative to its safety. If we could broaden the therapeutic indices of currently available medicines, it would revolutionize cancer treatments. We are still on the quest to find the ultimate cancer medicine – highly effective in several cancer types, safe, and precisely targeted to the tumor site.

Ivan Cheung, Eisai US chairman and CEO

Bio­gen, Ei­sai re­fresh amy­loid hy­poth­e­sis with PhI­II show­ing Alzheimer's med slows cog­ni­tive de­cline

In the first look at Phase III data for lecanemab, Eisai and Biogen’s follow-up Alzheimer’s drug to the embattled Aduhelm launch, results show the drug passed with flying colors on a test looking at memory, problem solving and other dementia metrics.

One of the most-watched Alzheimer’s therapies in the clinic, lecanemab met the study’s primary goal on the CDR-SB — Clinical Dementia Rating-Sum of Boxes — giving the biotech the confidence to ask for full approval in the US, EU and Japan by next March 31. The experimental drug reduced clinical decline on the scale by 27% compared to placebo at 18 months, the companies said Tuesday night Eastern time and Wednesday morning in Japan.

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Nooman Haque, head of life sciences and healthcare at Silicon Valley Bank, and John Carroll

I’m head­ed to Lon­don soon for #EU­BIO22. Care to join me?

It was great getting back to a live ESMO conference/webinar in Paris followed by a live pop-up event for the Endpoints 11 in Boston. We’re staying on the road in October with our return for a live/streaming EUBIO22 in London.

Silicon Valley Bank’s Nooman Haque and I are once again jumping back into the thick of it with a slate of virtual and live events on October 12. I’ll get the ball rolling with a virtual fireside chat with Novo Nordisk R&D chief Marcus Schindler, covering their pipeline plans and BD work.

Gilead names 'k­ing­pin­s' in coun­ter­feit HIV med law­suit

Gilead is mounting its counterfeit drug lawsuit, naming two “kingpins” and a complex network of conspirators who allegedly sold imitation bottles of its HIV meds, some of which ended up in US pharmacies.

The pharma giant on Wednesday provided an update on what it called a “large-scale, sophisticated counterfeiting conspiracy,” accusing two new defendants of “leading and orchestrating” a scheme to sell hundreds of millions of dollars in illegitimate drugs posing as meds such as Biktarvy and Descovy.

Marcelo Bigal, Ventus Therapeutics CEO

No­vo Nordisk joins No­var­tis, Roche in NL­RP3 are­na, bet­ting $70M cash on NASH, car­diometa­bol­ic us­es

As a drug target, the NLRP3 inflammasome has drawn serious interest from Big Pharma, inspiring a series of M&A deals from Novartis and Roche on top of venture investments by others. Now Novo Nordisk is jumping on the bandwagon — and the Danish pharma giant is taking the target where it knows best.

Novo Nordisk is getting its NLRP3 inhibitors from Ventus Therapeutics, a Versant-backed startup that set out to make some of the best NLRP3 drugs out there by incorporating new insights into the structure of the target complex.

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Phillip Gomez, Siga Technologies CEO

Siga nabs $10.7M from the US gov­ern­ment in deal for its mon­key­pox an­tivi­ral

The US government is all set to buy $10.7 million worth of Siga Technologies’ monkeypox oral antiviral, the company announced Thursday.

Of the total doses, $5.1 million worth of oral antivirals called Tpoxx (tecovirimat) will be delivered this year, with the US Department of Defense having the option of buying the rest at a later point.

The new contract follows an earlier one in which the government had purchased $7.4 million worth of Tpoxx from the company.

Vlad Coric, Biohaven CEO (Photo Credit: Andrew Venditti)

As Amy­lyx de­ci­sion waits in the wings, Bio­haven’s ALS drug sinks (again) in plat­form tri­al

The FDA’s decision on Amylyx’s ALS drug is set to come out sometime Thursday. In a space with few drugs, any approval would be a major landmark.

But elsewhere in the ALS field, things are a bit more tepid.

Thursday morning, Biohaven announced that its drug verdiperstat failed its arm of an ALS platform trial led by Massachusetts General Hospital. According to a press release, the drug did not meet its primary endpoint — improvement on an ALS functional status test — or any key secondary endpoints at 24 weeks. The trial had enrolled 167 patients, giving them either verdiperstat or placebo twice a day.

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Renhong Tang, Simcere co-CEO

Almi­rall part­ners up with Sim­cere in po­ten­tial $500M+ deal — with plans to take IL-2 can­di­date glob­al

A Chinese pharma is looking to go international with one of its preclinical candidates, and it’s teaming up with a Spanish company in a new pact potentially worth half a billion dollars to do just that.

Simcere and Almirall announced Thursday that the two companies had reached a deal for Simcere’s IL-2 mutant fusion protein drug candidate, called SIM0278. According to a statement, Almirall gets an exclusive right to develop and commercialize the drug candidate in all indications and markets outside of China, Hong Kong, Taiwan and Macau.

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Work taking place in the clean rooms at Vor (Credit: Vor)

Vor Bio opts to keep man­u­fac­tur­ing op­er­a­tions in-house for de­vel­op­ing stem cell, CAR-T ther­a­pies

While it is not uncommon for a biotech to go down the route of having the product manufactured by a contract organization, one small biotech is looking to keep its card close to its chest.

Vor Biopharma has started manufacturing operations at an in-house facility at its HQ in Cambridge, MA after beginning construction last summer.

According to the biotech, the facility aims to develop Vor’s hematopoietic stem cells (eHSCs) and CAR-T therapies for patients with blood cancers. The site will initially manufacture a clinical supply of its candidate VCAR33allo to support its IND, which is slated to be submitted in the first half of next year. It also plans to transfer the production of VOR33 to the facility. Vor is getting to work quickly as engineering runs for VCAR33allo has started this week.