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.

Regeneron CEO Leonard Schleifer speaks at a meeting with President Donald Trump, members of the Coronavirus Task Force, and pharmaceutical executives in the Cabinet Room of the White House (AP Photo/Andrew Harnik)

OWS shifts spot­light to drugs to fight Covid-19, hand­ing Re­gen­eron $450M to be­gin large scale man­u­fac­tur­ing in the US

The US government is on a spending spree. And after committing billions to vaccines defense operations are now doling out more of the big bucks through Operation Warp Speed to back a rapid flip of a drug into the market to stop Covid-19 from ravaging patients — possibly inside of 2 months.

The beneficiary this morning is Regeneron, the big biotech engaged in a frenzied race to develop an antibody cocktail called REGN-COV2 that just started a late-stage program to prove its worth in fighting the virus. BARDA and the Department of Defense are awarding Regeneron a $450 million contract to cover bulk delivery of the cocktail starting as early as late summer, with money added for fill/finish and storage activities.

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Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

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In­vestors give ail­ing Unum a lease on life and a whole new suite of ex­per­i­men­tal can­cer drugs

Investors, it seems, are willing to give Unum Therapeutics one last shot — or at least one last shot to a company of that name.

The ailing cancer biotech, beset by a series of clinical holds and multiple failed lead programs, announced today that they’ve acquired Kiq LLC and that investors are putting in $104 million to advance Kiq’s pipeline of kinase inhibitors. Unum shareholders will now own only 16.2% of the company and CEO Chuck Wilson indicated that the cell therapies the biotech has worked on since its founding may be on their way out, saying Unum will “explore strategic options” for those products.

Covid-19 roundup: Left out no longer, No­vavax se­cures largest Warp Speed deal yet: $1.6B

It looks like Novavax won’t be left out of Operation Warp Speed after all.

A month after the Gaithersburg, MD biotech saw its shares tumble when it was left off the first reported list of finalists for the White House’s Covid-19 vaccine accelerator, HHS and the Department of Defense have announced a $1.6 billion deal to scale up their Covid-19 candidate. It is the largest deal HHS has announced yet, eclipsing the $1.2 billion deal the administration reached with AstraZeneca in May.

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Bill Haney, Dragonfly CEO (Dave Pedley/Getty Images for SXSW)

A boom­ing Drag­on­fly is tak­ing its TriN­KETs to Copen­hagen as the lat­est Bris­tol My­ers pact spurs ex­pan­sion plans — out­side the US

Bristol Myers Squibb is making a habit out of collaborating with the crew at Dragonfly, adding their 3rd deal in a series that now will take them into newly charted R&D territory. And the fast-growing team at the Cambridge-based biotech is adding a facility in Copenhagen for its next growth spurt, where the government is making it easy to recruit scientists internationally as the U.S. throttles back.

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RA Cap­i­tal dou­bles down on Sid­dhartha Mukher­jee's vi­sion for a new cell en­gi­neer­ing ap­proach, lead­ing Vor's $110M Se­ries B

Vor Biopharma is muscling up.

CEO Robert Ang, who was reluctant to divulge the headcount when discussing his move from Neon Therapeutics to Vor last August, readily offered that the team has grown from 6 to 50 in less than a year. The biotech is moving to a larger office on Cambridge Parkway Drive in weeks, giving it more space to complete the IND-enabling work and manufacturing scale-up — conducted by a CDMO partner — in preparation for clinical trials planned for the first half of 2021.

Cel­lec­tis slammed af­ter pa­tient dies and FDA slaps a hold on their tri­al for an off-the-shelf CAR-T for mul­ti­ple myelo­ma

Cellectis was slammed after the market close on Monday as the biotech reported that the FDA demanded it hit the brakes on their MELANI-01 trial for their off-the-shelf cell therapy UCARTCS1A after one of the patients in the study died of treatment-related cardiac arrest.

The multiple myeloma patient had previously been treated unsuccessfully with various therapies, noted the biotech, and had been given dose level two (DL2) of their allogeneic CAR-T.

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Pfiz­er re-ups on Mis­sion Ther­a­peu­tics col­lab­o­ra­tion, lead­ing a $15M round and grab­bing first dibs on DUBs

Seven years after Pfizer first invested in Mission Therapeutics, a biotech that researches selectively inhibiting deubiquitylating enzymes (DUBs), the pharma giant is re-upping its commitment to the company in another sign of confidence in the field of protein degradation.

Pfizer’s VC arm is heading up a $15 million round, announced Monday morning, and increasing its overall stake in Mission. Pfizer is also entering into a licensing agreement that would give it first dibs at negotiating exclusivity after accessing certain DUB inhibitors and screening them for their potential as drugs.

Shoshanna Shendelman, Applied Therapeutics CEO (Applied Therapeutics)

A lit­tle biotech slaps back at a 'crim­i­nal' short at­tack, vow­ing to pur­sue a pros­e­cu­tion of their case

As short attacks go, Biotech Research Partners’ assault on Applied Therapeutics’ “cherry picked” data and a variety of so-called red flags didn’t cause a whole lot of damage. Ahead of the July 4 holiday, its shares $APLT were dinged and showed signs of quick recovery.

But that didn’t stop an incendiary response, as the biotech swung into action bright and early Monday morning.

Applied Therapeutics accused the authors of the short report of manipulating graphs and figures, misrepresenting data and included factual misrepresentations — all of which added up, in their view, to fraud.

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