Bio­phar­ma­ceu­ti­cal Deal­mak­ers’ In­ten­tions in 2018: Sup­ply and De­mand Ex­pec­ta­tions and Im­bal­ances

By Neel Pa­tel and Sachin Pur­war

In the decade since our first an­nu­al Deal­mak­ers’ In­ten­tions Study in 2009, there has been a per­sis­tent trend of buy­ers steadi­ly sharp­en­ing their ther­a­peu­tic ar­eas of fo­cus to gain com­pet­i­tive ad­van­tage while be­com­ing more se­lec­tive about who they en­gage with in the process. At the same time, com­pa­nies have been dri­ven to keep pace with tech­no­log­i­cal ad­vances — e.g., the ex­plo­sion in T-cell im­munother­a­py, ge­nomics, com­pan­ion di­ag­nos­tics — or risk ir­rel­e­vance. The law of sup­ply and de­mand is al­ways at work, how­ev­er, and ac­cord­ing to our 2018 Deal­mak­ers’ In­ten­tions Study has the po­ten­tial for sig­nif­i­cant im­pact on deal­mak­ing in the on­col­o­gy space and oth­er ther­a­peu­tic ar­eas com­pared to pre­vi­ous years.

Read the full study find­ings.

To gain more in­sight in­to 2018 deal­mak­ing trends and in­flu­ences, Sy­neos HealthTM  sur­veyed deal­mak­ers across the in­dus­try to as­sess their in­ten­tions for the next 12 months and put these find­ings in­to con­text for the year ahead. This year, we sur­veyed 66 mem­bers of the bio­phar­ma­ceu­ti­cal com­mu­ni­ty who par­tic­i­pate on ei­ther or both sides of deals and who are pre­dom­i­nant­ly ex­ec­u­tive-lev­el in­flu­encers on de­ci­sion-mak­ing. The 2018 Deal­mak­ers’ In­ten­tions Study, the 10th in our se­ries, cap­tures their ex­pec­ta­tions for deal ac­tiv­i­ty, sup­ply and de­mand for spe­cif­ic as­sets at dif­fer­ent de­vel­op­ment stages, and var­i­ous fac­tors af­fect­ing deal­mak­ing. In this sec­ond ar­ti­cle in a two-part se­ries, we take a close look at the sup­ply and de­mand pic­ture for 2018, by both de­vel­op­ment stage and ther­a­peu­tic area.

Sup­ply and De­mand by De­vel­op­ment Stage

Fol­low­ing the trend in pre­vi­ous years, buy­ers are con­tin­u­ing to show a strong in­ter­est in late-stage as­sets rel­a­tive to sell­ers (Fig. 8). How­ev­er, it seems that sell­ers are more in­vest­ed in see­ing pre-clin­i­cal as­sets through to Phase I and II be­fore look­ing to make a deal. There is a rel­a­tive shift from 2017 to 2018 in sell­er sup­ply to buy­er de­mand from pre-clin­i­cal (+35 per­cent) as­sets in­to Phase I (-15 per­cent) and Phase II (-24 per­cent) as­sets. This could par­tial­ly be a func­tion of the read­i­ly avail­able fi­nanc­ing cap­i­tal that is al­low­ing them to in­vest more in de­vel­op­ment and seek a stronger re­turn on cap­i­tal. It could al­so be that there is a stronger in­ter­est among buy­ers in ob­tain­ing pre-clin­i­cal as­sets that they can de­vel­op them­selves to beef up their pipelines at rel­a­tive­ly fa­vor­able prices.

Sup­ply and De­mand by Ther­a­peu­tic Area

As an­tic­i­pat­ed, on­col­o­gy re­mains the top ther­a­peu­tic area of in­ter­est for buy­ers and sell­ers. How­ev­er, it has be­come a much more at­trac­tive, op­por­tunis­tic mar­ket for buy­ers due to the spread be­tween an­tic­i­pat­ed sup­ply and de­mand in­creas­ing from 2 per­cent in 2017 to a fair­ly sig­nif­i­cant 15 per­cent in 2018. Twen­ty-one per­cent of buy­ers sur­veyed ex­pressed in­ter­est in on­col­o­gy as­sets, while 36 per­cent of sell­ers re­port­ed on­col­o­gy as­set sup­ply (Fig. 9). This sug­gests that pre­mi­ums in the on­col­o­gy space could start see­ing a po­ten­tial de­cline in the com­ing year for prod­ucts that are not high­ly dif­fer­en­ti­at­ed. Oth­er ar­eas where we are see­ing a sup­ply sur­plus in­clude in­fec­tious dis­ease (both an­tivi­ral and an­tibi­ot­ic) as well as in the CNS/psy­chi­a­try space. For sell­ers this means they have to be very mind­ful not on­ly about dif­fer­en­ti­at­ing their as­set but al­so mak­ing sure the core me­chan­ics of com­mer­cial suc­cess are be­ing con­sid­ered – things like pa­tient pop­u­la­tion tar­get­ing, ev­i­dence gen­er­a­tion that builds the val­ue sto­ry, and the like.

Ther­a­peu­tic ar­eas show­ing a de­mand sur­plus in­clude hema­tol­ogy, res­pi­ra­to­ry/pul­monolo­gy and re­nal. When we broke out the de­mand in­dex by tri­al phase (Fig. 11), no clear pref­er­ence emerged this year among buy­ers and sell­ers about the stage at which they pre­fer to make deals. This sug­gests that they are cur­rent­ly more fo­cused on iden­ti­fy­ing the best strate­gic fit and op­por­tu­ni­ty for their com­pa­nies.

The spe­cif­ic com­bi­na­tions of ther­a­peu­tic ar­eas and states of de­vel­op­ment an­tic­i­pat­ed to have the high­est sup­ply and de­mand im­bal­ances this year are sum­ma­rized in Table 1.

Table 1

Hottest Ar­eas for Li­cens­ing

CAR-T cell ther­a­py and CRISPR/Cas9 con­tin­ue to be among the hottest ar­eas for li­cens­ing in 2018, but in­ter­est in im­muno-on­col­o­gy and mi­cro­bio­mes has in­creased con­sid­er­ably since 2017. The top 10 ar­eas of in­ter­est in 2018 (in or­der) are:

  1. Im­muno-on­col­o­gy
  2. CAR-T cell ther­a­py
  3. CRISPR/Cas9
  4. Mi­cro­bio­me
  5. Can­cer vac­cines
  6. Ul­tra-rare
  7. Oth­er genome edit­ing
  8. An­ti­body-drug con­ju­gates
  9. Per­son­al­ized med­i­cine/ com­pan­ion di­ag­nos­tics
  10. Epi­ge­net­ics

While large-cap con­sol­i­da­tions may still be in our fore­see­able fu­ture, the over­ar­ch­ing trend of the last decade — i.e., the growth in emerg­ing com­pa­nies and the new fi­nanc­ing op­tions avail­able to them — means that small­er com­pa­nies have many deal­mak­ing op­por­tu­ni­ties avail­able to them. But as the 2018 Deal­mak­ers’ In­ten­tions Study demon­strates, these com­pa­nies will need to fo­cus on clear­ly demon­strat­ing prod­uct dif­fer­en­ti­a­tion and val­ue to ap­peal to in­creas­ing­ly dis­crim­i­nat­ing buy­ers while avoid­ing com­mon pit­falls in the deal­mak­ing process.

This is the sec­ond post in a se­ries re­lat­ed to the 2018 Deal­mak­ers’ Study. Our first post re­port­ed on high-lev­el deal­mak­ing trends, ex­pec­ta­tions by deal type, and fac­tors in­di­cat­ing buy­ers are be­com­ing a bit more se­lec­tive about the as­sets they are pur­su­ing and more risk averse. Fol­low us on our LinkedIn pages (Neel and Sachin) and check back on End­points to find ad­di­tion­al in­sights on fac­tors im­pact­ing bio­phar­ma­ceu­ti­cal deal­mak­ing.

Au­thors: Neel Pa­tel is Man­ag­ing Di­rec­tor, Com­mer­cial Strat­e­gy and Plan­ning for Sy­neos Health Con­sult­ing, and Sachin Pur­war is Di­rec­tor, Com­mer­cial Strat­e­gy and Plan­ning for Sy­neos Health Con­sult­ing. Sy­neos Health Con­sult­ing is an in­dus­try-lead­ing con­sult­ing firm spe­cial­iz­ing in the bio­phar­ma­ceu­ti­cal in­dus­try and part of Sy­neos Health, the on­ly ful­ly in­te­grat­ed bio­phar­ma­ceu­ti­cal so­lu­tions or­ga­ni­za­tion. We pro­vide ser­vices across a com­pre­hen­sive range of key ar­eas, in­clud­ing com­mer­cial strat­e­gy and plan­ning, med­ical af­fairs, risk and pro­gram man­age­ment and pric­ing and mar­ket ac­cess. Rec­og­nized by Forbes mag­a­zine as one of Amer­i­ca’s Best Man­age­ment Con­sult­ing Firms for three years run­ning, our in­dus­try fo­cus and depth of func­tion­al ex­per­tise, com­bined with strong sci­en­tif­ic and mar­ket knowl­edge, unique­ly po­si­tion us to tack­le high­ly com­plex busi­ness and mar­ket chal­lenges to de­vel­op ac­tion­able strate­gies for our clients. For more in­for­ma­tion, please vis­it sy­­lu­tions/con­sult­ing.

Nick Leschly via Getty

UP­DAT­ED: Blue­bird shares sink as an­a­lysts puz­zle out $1.8M stick­er shock and an un­ex­pect­ed de­lay

Blue­bird bio $BLUE has un­veiled its price for the new­ly ap­proved gene ther­a­py Zyn­te­glo (Lenti­Glo­bin), which came as a big sur­prise. And it wasn’t the on­ly un­ex­pect­ed twist in to­day’s sto­ry.

With some an­a­lysts bet­ting on a $900,000 price for the β-tha­lassemia treat­ment in Eu­rope, where reg­u­la­tors pro­vid­ed a con­di­tion­al ear­ly OK, blue­bird CEO Nick Leschly said Fri­day morn­ing that the pa­tients who are suc­cess­ful­ly treat­ed with their drug over 5 years will be charged twice that — $1.8 mil­lion — on the con­ti­nent. That makes this drug the sec­ond most ex­pen­sive ther­a­py on the plan­et, just be­hind No­var­tis’ new­ly ap­proved Zol­gens­ma at $2.1 mil­lion, with an­a­lysts still wait­ing to see what kind of pre­mi­um can be had in the US.


Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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Bain’s biotech team has cre­at­ed a $1B-plus fund — with an eye to more Big Phar­ma spin­outs

One of the biggest investors to burst onto the biotech scene in recent years has re-upped with more than a billion dollars flowing into its second fund. And this next wave of bets will likely include more of the Big Pharma spinouts that highlighted their first 3 years in action.

Adam Koppel and Jeff Schwartz got the new life sciences fund at Bain Capital into gear in the spring of 2016, as they were putting together a $720 million fund with $600 million flowing in from external investors and the rest drawn from the Bain side of the equation. This time the external investors chipped in $900 million, with Bain coming in for roughly $180 million more.

They’re not done with Fund I, with plans to add a couple more deals to the 15 they’ve already posted. And once again, they’re estimating another 15 to 20 investments over a 3- to 5-year time horizon for Fund II.

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News­mak­ers at #EHA19: Re­gen­eron, Ar­Qule track progress on re­sponse rates

Re­gen­eron’s close­ly-watched bis­pe­cif­ic con­tin­ues to ring up high re­sponse rates

Re­gen­eron’s high-pro­file bis­pe­cif­ic REGN1979 is back in the spot­light at the Eu­ro­pean Hema­tol­ogy As­so­ci­a­tion sci­en­tif­ic con­fab. And while the stel­lar num­bers we saw at ASH have erod­ed some­what as more blood can­cer pa­tients are eval­u­at­ed, the re­sponse rates for this CD3/CD20 drug re­main high.

A to­tal of 13 out of 14 fol­lic­u­lar lym­phomas re­spond­ed to the drug, a 93% ORR, down from 100% at the last read­out. In 10 out of 14, there was a com­plete re­sponse. In dif­fuse large B-cell lym­phoma the re­sponse rate was 57% among pa­tients treat­ed at the 80 mg to 160 mg dose range. They were all com­plete re­spons­es. And 2 of these Cars were for pa­tients who had failed CAR-T ther­a­py.

Neil Woodford, Woodford Investment Management via YouTube

Un­der siege, in­vest­ment man­ag­er Wood­ford faces an­oth­er in­vest­ment shock

Em­bat­tled UK fund man­ag­er Neil Wood­ford — who has con­tro­ver­sial­ly blocked in­vestors from pulling out from his flag­ship fund to stem the blood­let­ting, af­ter a slew of dis­ap­point­ed in­vestors fled fol­low­ing a se­ries of sour bets — is now pay­ing the price for his ac­tions via an in­vestor ex­o­dus on an­oth­er fund.

Har­g­reaves Lans­down, which has in the past sold and pro­mot­ed the Wood­ford funds via its re­tail in­vest­ment plat­form, has re­port­ed­ly with­drawn £45 mil­lion — its en­tire po­si­tion — from the in­vest­ment man­ag­er’s In­come Fo­cus Fund.

Search­ing for the next block­buster to fol­low Darza­lex, J&J finds a $150M an­ti-CD38 drug from part­ner Gen­mab

Now that J&J and Genmab have thrust Darzalex onto the regulatory orbit for first-line use in multiple myeloma, the partners are lining up a deal for a next-gen follow-on to the leading CD38 drug.

Janssen — J&J’s biotech unit — has its eyes on HexaBody-CD38, a preclinical compound generated on Genmab’s tech platform designed to make drugs more potent via hexamerization.

Genmab is footing the bill on studies in multiple myeloma and diffuse large B-cell lymphoma; once it completes clinical proof of concept, Janssen has the option to license the drug for a $150 million exercise fee. There’s also $125 million worth of milestones in play.

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Ab­b­Vie touts new da­ta for Hu­mi­ra suc­ces­sor; Gilead inks dis­cov­ery deal

→ Ab­b­Vie is tout­ing new pos­i­tive da­ta com­par­ing their ag­ing block­buster Hu­mi­ra with their hoped-for block­buster upadac­i­tinib. Over 48 weeks a larg­er pro­por­tion of pa­tients tak­ing the ex­per­i­men­tal drug ex­pe­ri­enced clin­i­cal re­mis­sion than in the con­trol arm with Hu­mi­ra. Their drug brought in $20 bil­lion last year, top­ping the scales in the num­ber 1 slot.

→ Gilead has turned to Van­cou­ver-based Ab­Cellera for its lat­est dis­cov­ery deal. Ab­Cellera will use its know-how in “sin­gle-cell screen­ing of nat­ur­al im­mune sources” to find an­ti­body can­di­dates for Gilead to pur­sue in the in­fec­tious dis­ease field. The deal in­cludes an up­front and mile­stones.

Turns out, Rudy Tanzi did­n't see much of a sto­ry about a hid­den link be­tween En­brel and Alzheimer's ei­ther

The Wash­ing­ton Post man­aged to whip up the quick­est in­dus­try con­sen­sus I’ve ever seen that one of its re­porters was pur­vey­ing overblown non­sense with a sto­ry that Pfiz­er was sit­ting on da­ta sug­gest­ing that En­brel could be an ef­fec­tive treat­ment for Alzheimer’s. 

In cov­er­ing that bit of an­ti-Big Phar­ma fan­ta­sy — there are lots of rea­sons to go af­ter phar­ma, but this piece was lu­di­crous — I not­ed com­ments in the sto­ry from some promi­nent peo­ple in the field crit­i­ciz­ing Pfiz­er for not pub­lish­ing the da­ta. I sin­gled out Rudy Tanzi at Har­vard and then ap­plied some added crit­i­cism for the things he’s done to hype — in my opin­ion — high­ly ques­tion­able as­sump­tions. You can see it in the link.