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.

Graphic: Alexander Lefterov for Endpoints News

Small biotechs with big drug am­bi­tions threat­en to up­end the tra­di­tion­al drug launch play­book

Of the countless decisions Vlad Coric had to make as Biohaven’s CEO over the past seven years, there was one that felt particularly nerve-wracking: Instead of selling to a Big Pharma, the company decided it would commercialize its migraine drug itself.

“I remember some investors yelling and pounding on the table like, you can’t do this. What are you thinking? You’re going to get crushed by AbbVie,” he recalled.

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Mar­ket­ingRx roundup: Pfiz­er de­buts Pre­vnar 20 TV ads; Lil­ly gets first FDA 2022 pro­mo slap down let­ter

Pfizer debuted its first TV ad for its Prevnar 20 next-generation pneumococcal pneumonia vaccine. In the 60-second spot, several people (actor portrayals) with their ages listed as 65 or older are shown walking into a clinic as they turn to say they’re getting vaccinated with Prevnar 20 because they’re at risk.

The update to Pfizer’s blockbuster Prevnar 13 vaccine was approved in June, and as its name suggests is a vaccine for 20 serotypes — the original 13 plus seven more that cause pneumococcal disease. Pfizer used to spend heavily on TV ads to promote Prevnar 13 in 2018 and 2019 but cut back its TV budgets in the past two fall and winter seasonal spending cycles. Prevnar had been Pfizer’s top-selling drug, notching sales of just under $6 billion in 2020, and was the world’s top-selling vaccine before the Covid-19 vaccines came to market last year.

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Albert Bourla (Photo by Steven Ferdman/Getty Images)

UP­DAT­ED: Pfiz­er fields a CRL for a $295M rare dis­ease play, giv­ing ri­val a big head start

Pfizer won’t be adding a new rare disease drug to the franchise club — for now, anyway.

The pharma giant put out word that their FDA application for the growth hormone therapy somatrogon got the regulatory heave-ho, though they didn’t even hint at a reason for the CRL. Following standard operating procedure, Pfizer said in a terse missive that they would be working with regulators on a followup.

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A new can­cer im­munother­a­py brings cau­tious hope for a field long await­ing the next big break­through

Bob Seibert sat silent across from his daughter at their favorite Spanish restaurant near his home in Charleston County, SC, their paella growing cold as he read through all the places in his body doctors found tumors.

He had texted his wife, a pediatric intensive care nurse, when he got the alert that his online chart was ready. Although he saw immediately it was bad, many of the terms — peritoneal, right iliac — were inscrutable. But she was five hours downstate, at a loud group dinner the night before another daughter’s cheer competition.

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Florida Gov. Ron DeSantis (AP Photo/Wilfredo Lee, File)

Opin­ion: Flori­da is so mAb crazy, Ron De­San­tis wants to use mAbs that don't work

Florida Gov. Ron DeSantis is trying so hard to politicize the FDA and demonize the federal government that he entered into an alternate universe on Monday evening in describing a recent FDA action to restrict the use of two monoclonal antibody, or mAb, treatments for Covid-19 that don’t work against Omicron.

Without further ado, let’s break down his statement from last night, line by line, adjective by adjective.

Not cheap­er by the dozen: Bris­tol My­ers be­comes the 12th phar­ma com­pa­ny to re­strict 340B sales

Bristol Myers Squibb recently joined 11 of its peer pharma companies in limiting how many contract pharmacies can access certain drugs discounted by a federal program known as 340B.

Bristol Myers is just the latest in a series of high-profile pharma companies moving in their own direction as the Biden administration’s Health Resources and Services Administration struggles to rein in the drug discount program for the neediest Americans.

Joaquin Duato, J&J CEO (Photo by Charles Sykes/Invision/AP)

New J&J CEO Joaquin Du­a­to promis­es an ag­gres­sive M&A hunt in quest to grow phar­ma sales

Joaquin Duato stepped away from the sideline and directly into the spotlight on Tuesday, delivering his first quarterly review for J&J as its newly-tapped CEO after an 11-year run in senior posts. And he had some mixed financial news to deliver today while laying claim to a string of blockbuster drugs in the making and outlining an appetite for small and medium-sized M&A deals.

Duato also didn’t exactly shun large buyouts when asked about the future of the company’s medtech business — where they look to be in either the top or number 2 position in every segment they’re in — even though the bar for getting those deals done is so much higher.

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Amgen's Twitter campaign #DearAsthma inspired thousands of people to express struggles and frustrations with the disease

Am­gen’s #Dear­Asth­ma spon­sored tweet lands big on game day, spark­ing thou­sands to re­spond

Amgen wanted to know how people with asthma really felt about daily life with the disease. So it bought a promoted tweet on Twitter noting the not-so-simple realities of life with asthma and ended the post with a #DearAsthma hashtag, a megaphone emoji and a re-tweet button.

That was just over one week ago and the responses haven’t stopped. More than 7,000 posts so far on Twitter replied to #DearAsthma to detail struggles of daily life, expressing humor, frustration and sometimes anger. More than a few f-bombs have been typed or gif-ed in reply to communicate just how much many people “hate” the disease.

Roy Baynes, Merck

FDA bats back Mer­ck’s ‘pipeline in a prod­uct,’ de­mands more ef­fi­ca­cy da­ta

Despite some heavy blowback from analysts, Merck execs maintained an upbeat attitude about the market potential of its chronic cough drug gefapixant. But the confidence may be fading somewhat today as Merck puts out news that the FDA is handing back its application with a CRL.

Dubbed by Merck’s development chief Roy Baynes as a “pipeline in a product” with a variety of potential uses, Merck had fielded positive late-stage data demonstrating the drug’s ability to combat chronic cough. The drug dramatically reduced chronic cough in Phase III, but so did placebo, leaving Merck’s research team with a marginal success on the p-value side of the equation.

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