Biotech M&A is rip­ping along now as IPOs surge and ven­ture cash flows. Who's the next big tar­get?

Over the course of the first three days of this week we’ve been treat­ed to two biotech buy­outs to­tal­ing $9.6 bil­lion — by it­self more than all the buy­out cash Eval­u­atePhar­ma ac­count­ed for dur­ing all of Q2 last year. And af­ter Q1 racked up close to $47 bil­lion in M&A work, there’s plen­ty of an­tic­i­pa­tion that more deals lie ahead in what could be a very busy 2018.

At the top of the to-buy list right now is Shire $SH­PG, which Take­da put in­to play with its move to flag a like­ly up­com­ing of­fer. That would be worth more than $50 bil­lion by it­self. Take­da’s in­ter­est came out of left field, but the com­pa­ny has been re­struc­tur­ing for the past two years, shed­ding R&D jobs and reeval­u­at­ing the pipeline.

Flem­ming Orn­skov

Since news of Take­da’s in­ter­est sur­faced, the re­views of Shire’s Flem­ming Orn­skov on the num­bers have been bru­tal. And if Take­da can’t fin­ish the deal, some­one else may well come along and do it. 

We still haven’t heard about any­thing big from Bio­gen $BI­IB, which most an­a­lysts would tell you needs to do some­thing im­pres­sive on the M&A front that would help spread the con­sid­er­able risk it faces on Alzheimer’s and some dis­tant cat­a­lysts for in­vestors to pon­der. And there’s been word that Cel­gene $CELG is back at it, hunt­ing new buy­outs af­ter scoop­ing up Juno in the first quar­ter, look­ing for an­oth­er deal that would help ease the con­cerns that have been grow­ing about its wob­bly per­for­mance of late.

Agios $AGIO has been one pos­si­ble tar­get men­tioned, but Cel­gene likes to roam far and wide in hunt­ing buy­out tar­gets.

This is one year when you might ex­pect the un­ex­pect­ed. No­var­tis set the tone for sur­pris­ing strate­gies with its $8.7 bil­lion deal to buy AveX­is $AVXS and its late-stage gene ther­a­py for SMA. (An­oth­er rea­son why Bio­gen, with its SMA ther­a­py Spin­raza now fac­ing an even big­ger threat, has to pull the trig­ger on some­thing im­pres­sive.) No­var­tis CEO Vas Narasimhan in­tends to make the phar­ma gi­ant a big leader in the cell and gene ther­a­py field, and he’s cut him­self free of the usu­al $2 bil­lion to $5 bil­lion bolt-on ac­qui­si­tions that had lim­it­ed their ear­li­er ac­tiv­i­ty.

You can al­so nev­er for­get Pfiz­er in these dis­cus­sions, the last of the big play­ers which still has an ap­petite for mega-merg­ers, even though they of­fer a ques­tion­able path to earn­ings growth. GSK’s new CEO Em­ma Walm­s­ley has done one con­sumer deal, and now you can ex­pect her to turn to the re­search side for new pacts. And what about Eli Lil­ly, where the new R&D chief has made it clear he’d like to do some pipeline build­ing?

M&A charts are usu­al­ly dom­i­nat­ed by sin­gle deals, as you can see in Eval­u­ate’s chart be­low. But this year the fo­cus is on a slate of multi­bil­lion-dol­lar deals more in the small to mid-range are­na. That trend will keep every­one look­ing for the next deal. And the next. And the next. 

It’s a sell­er’s mar­ket right now, with mon­ey pump­ing in­to the in­dus­try from every di­rec­tion. How long this can last is any­one’s guess.

Lessons for biotech and phar­ma from a doc­tor who chased his own cure

After being struck by a rare disease as a healthy third year medical student, David Fajgenbaum began an arduous journey chasing his own cure. Amidst the hustle of this year’s JP Morgan conference, the digital trials platform Medable partnered with Endpoints Studio to share Dr. Fajgenbaum’s story with the drug development industry.

What follows is an edited transcript of the conversation between Medable CEO Dr. Michelle Longmire and Dr. Fajgenbaum, and it is full of lessons for biotech executives charged with bringing the next generation of medicines to patients.

Left to right, top to bottom: Carl Gordon, Adam Stone, Peter Moglia, David Schenkein, Robert Nelsen, Carol Gallagher; Srinivas Akkaraju, Ray Debbane, Jim Flynn, Peter Kolchinsky, Thilo Schroeder, Brad Bolzon

The top 100 bio­phar­ma ven­ture in­vestors at the mega­bil­lions deal ta­ble

The VC crowd took a step back last year, but nevertheless maintained a furious pace of new investments in therapeutic tech platforms and biotech startups. And the top 100 players completely dominated the megabillions game.

Just looking at the number of deals done by each of the top 100, OrbiMed came in at the top, with 20, followed by Alexandria (18), Perceptive (16) and the ubiquitous RA Capital at 16. It’s impossible to say exactly how much they invested in total — those numbers are only rarely provided — but it is clear from the numbers assembled by Chris Dokomajilar at DealForma who’s most likely to be found sitting at the table during the go-go days of biotech investing.

Dokomajilar tracked $14.06 billion in biotech venture investing last year, a dip from the frenzied pace of $16.02 billion in 2018 and more than $10 billion higher than he recorded for 2010, as the economy was recovering from a profound economic crisis.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Chi­na ap­proves flu drug be­ing tout­ed as a po­ten­tial coro­n­avirus treat­ment amid a rush of clin­i­cal stud­ies

One of the three drugs that China’s Ministry of Science and Technology has tapped as potential COVID-19 treatments to watch has notched its first Chinese OK — for the flu.

While there’s no proof yet that fapilavir, or favipiravir, is the cure that patients and physicians are yearning for, it stands out for a unique constellation of qualities. It’s been commercially available in Japan for several years (unlike Gilead’s experimental remdesivir) yet it’s new to China (unlike the malaria drug chloroquine phosphate). Perhaps more importantly, a domestic biotech — Zhejiang Hisun Pharma — owns the rights to manufacture and market the drug, preempting any concerns about patents.

FDA goes on high alert as coro­n­avirus rais­es threat to drug man­u­fac­tur­ing and clin­i­cal tri­als grind to a halt

The FDA isn’t quite sure just what the coronavirus outbreak in China will mean for the US pharma industry, but it has the potential to trigger a host of troublesome issues around the supply chain the country is directly plugged into.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,400+ biopharma pros reading Endpoints daily — and it's free.

Warren Buffett, AP Images

War­ren Buf­fett gets a dou­ble take as the in­vest­ment pow­er­house set­tles on its first biotech in­vest­ment

Coke. American-Express. Apple. And Biogen?

Warren Buffet’s Berkshire Hathaway, which made itself into a symbol of rock-solid investment strategy, has revealed a stake in the big biotech as it takes on one of the biggest gambles in the industry.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,400+ biopharma pros reading Endpoints daily — and it's free.

For­mer No­var­tis ex­ec pleads guilty to gener­ic price fix­ing

On Friday, Hector Armando Kellum — a former senior executive at Novartis’ Sandoz unit plead guilty to charges of conspiring to fix the prices of products, including eczema and psoriasis treatment clobetasol and anti-fungal therapy nystatin triamcinolone, the Justice Department said.

His alleged partners-in-crime included Ara Aprahamian, a former sales and marketing executive at Taro Pharmaceutical Industries, who was also indicted in Philadelphia earlier this month for price-fixing and bid-rigging.

Lars Fruergaard Jørgensen, chief executive officer of Novo Nordisk A/S, (via Getty Images)

The list of the 11 block­busters-to-be in line for a 2020 launch high­light agony and ec­sta­sy of drug R&D

For all the talk about unmet medical need and patients first and so on, the key criteria investors watch for any new drug in the pipelines is peak sales projection. Are you going to hit the blockbuster mark, at $1 billion-plus, or are you going to be an also-ran in the sales department?

Of course, analysts’ peak sales projections by themselves are of limited value in many cases. When the PCSK9 drugs started arriving 5 years ago, Repatha was billed as a $2.5 billion peak earner. They’re nowhere near that, with new competition threatening current levels. And if Biogen’s controversial Alzheimer’s drug aducanumab (submission planned but not on the list) is approved, per chance, will payers cover it?

Maybe not. And then those $10 billion in peak sales assumptions would go straight down the drain.

But, analysts are analysts, and peak sales projections have to be factored in when assessing the top experimental drugs up for a launch in the year ahead.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,400+ biopharma pros reading Endpoints daily — and it's free.

AstraZeneca executives at earnings conference, February 2020 (Natalie Grover for Endpoints News)

Coro­n­avirus out­break clouds As­traZeneca's Q4 re­sults and 2020 out­look

LONDON — With nearly a fifth of total sales coming from China, AstraZeneca counts the coronavirus-hit nation as one of its biggest growth drivers. The impact of the deadly epidemic has unsurprisingly weighed on the British drugmaker’s fourth-quarter results.

On Friday, AstraZeneca posted fourth-quarter sales of $6.25 billion, just shy of Wall Street estimates. Nearly $1.2 billion of that product revenue came from China.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,400+ biopharma pros reading Endpoints daily — and it's free.

Carl June, via Getty

Carl June on CRISPR, CAR–T and how the Viet­nam War dropped him in­to med­i­cine

In August of 2011, Carl June and his team published a landmark paper showing their CAR–T treatment had cleared a patient of cancer. A year-to-the-month later, Jennifer Doudna made an even bigger splash when she published the first major CRISPR paper, setting off a decade of intense research and sometimes even more intense public debate over the ethics of what the gene-editing tool could do.

Last week, June, whose CAR–T work was eventually developed by Novartis into Kymriah, published in Science the first US paper showing how the two could be brought together. It was not only one of the first time scientists have combined the groundbreaking tools, but the first peer-reviewed American paper showing how CRISPR could be used in patients.