Biotech M&A? No­var­tis chief Jimenez says he’s stick­ing to the un­der-$1B aisle for now

No­var­tis nev­er did say just what kind of deal it put to­geth­er in buy­ing Ziar­co late last year. But Bloomberg had al­ready re­port­ed that the com­pa­ny was scout­ing for a deal, with cash and con­sid­er­able mile­stones prob­a­bly tot­ting up to around the $1 bil­lion mark.

Joe Jimenez

In Big Phar­ma land, that’s the kind of mod­est biotech ac­qui­si­tion deal you can com­plete with­out sweat­ing the de­tails about cash in. And right now, No­var­tis ex­ecs are us­ing it as a mark­er for the kind of buy­outs that make sense right now, stay­ing fo­cused on small 1 or 2 drug deals.

In yes­ter­day’s Q2 run­down for an­a­lysts, No­var­tis CEO Joe Jimenez made it crys­tal clear that the mar­ket for mid-sized bolt-ons looks aw­ful from a buy­ers’ per­spec­tive. It’s a fa­mil­iar mantra dur­ing a year in which sig­nif­i­cant M&A deals have large­ly failed to ma­te­ri­al­ize — with Acte­lion as the ex­cep­tion prov­ing the rule — and it speaks di­rect­ly to what like­ly lies ahead in H2.

From the call, here is what Jimenez had to say:

In terms of M&A, we are still very fo­cused on our strat­e­gy of bolt-on ac­qui­si­tions any­where from $2 bil­lion to $5 bil­lion would be our sweet spot. I have said pre­vi­ous­ly that val­u­a­tions are such that it’s very dif­fi­cult to find ac­qui­si­tions that are in that range that would add val­ue for No­var­tis share­hold­ers. So what’s hap­pened is we have moved up­stream in terms of ear­li­er stage as­sets. So you saw us buy Ziar­co is one ex­am­ple for atopic der­mati­tis and a few oth­ers over the last six months. So we are still fo­cused on the bolt-on strat­e­gy that will strength­en ei­ther on­col­o­gy or the phar­ma­ceu­ti­cal busi­ness or dif­fer­en­ti­at­ed gener­ics busi­ness. And that’s where we are go­ing to in­vest. But we are not go­ing to in­vest in a place where we can’t see a clear path to adding a tremen­dous amount of val­ue from No­var­tis share­hold­ers. And if you look at the ex­ist­ing what you would de­scribe as bolt-ons or even big­ger than a bolt-on at the ten­der to $15 bil­lion range, we just don’t see it yet from a val­u­a­tion stand­point.

That’s the Swiss view, shared by crosstown Basel ri­val Roche. And you’ll find oth­er Big 10 phar­mas play­ing the same sort of mil­lion-dol­lar ante game.

Sanofi, which needs a trans­for­ma­tion­al deal more than any of its ri­vals, helped un­der­score the low-cost strat­e­gy just days ago with its $750 mil­lion deal to add Pro­tein Sci­ences’ Flublock for its vac­cines group.

Ask any of them, and you’re like­ly to hear that biotech val­u­a­tions just don’t make sense. Any­thing that looks ripe from a pipeline per­spec­tive is like­ly go­ing to fetch an in­flat­ed price. Just ask Pfiz­er, which paid $14 bil­lion for Medi­va­tion and is still try­ing to ex­plain it to an­a­lysts.

On an­oth­er note, No­var­tis ex­ecs al­so used the Q2 re­view to dis­cuss pric­ing strate­gies for CTL019, the pi­o­neer­ing CAR-T that ap­pears head­ed to an his­toric FDA ap­proval. These per­son­al­ized meds are made from pa­tients’ cells and won’t come cheap. One an­a­lyst asked if the phar­ma gi­ant was look­ing at a pay-for-per­for­mance ap­proach. No­var­tis On­col­o­gy chief Bruno St­rig­i­ni replied:

So we are look­ing at a num­ber of op­tions, in­clud­ing health eco­nom­ic mod­els and al­so out­comes mod­els that con­sid­er the sig­nif­i­cant val­ue CTL019 brings to pa­tients, its sci­en­tif­ic in­no­va­tion and the high cost of man­u­fac­tur­ing. We will dis­close the price at the time of launch of the prod­uct. In terms of Ac­cess, our team has start­ed to pro­vide ap­pro­pri­ate in­for­ma­tion to pay­er de­scrib­ing the pa­tient pop­u­la­tion un­met needs, lim­it­ed treat­ment op­tions for el­i­gi­ble pa­tients and man­u­fac­tur­ing process.

The Advance Clinical leadership team: CEO Yvonne Lungershausen, Sandrien Louwaars - Director Business Development Operations, Gabriel Kremmidiotis - Chief Scientific Officer, Ben Edwards - Chief Strategy Officer

How Aus­tralia De­liv­ers Rapid Start-up and 43.5% Re­bate for Ear­ly Phase On­col­o­gy Tri­als

About Avance Clinical

Avance Clinical is an Australian owned Contract Research Organisation that has been providing high-quality clinical research services to the local and international drug development industry for 20 years. They specialise in working with biotech companies to execute Phase 1 and Phase 2 clinical trials to deliver high-quality outcomes fit for global regulatory standards.

As oncology sponsors look internationally to speed-up trials after unprecedented COVID-19 suspensions and delays, Australia, which has led the world in minimizing the pandemic’s impact, stands out as an attractive destination for early phase trials. This in combination with the streamlined regulatory system and the financial benefits including a very favourable exchange rate and the R & D cash rebate makes Australia the perfect location for accelerating biotech clinical programs.

BREAK­ING: Mer­ck makes a triple play on Covid-19: buy­ing out a vac­cine biotech, part­ner­ing on an­oth­er pro­gram and adding an an­tivi­ral to the mix

Merck is making a triple play in a sudden leap into the R&D campaign against Covid-19.

Tuesday morning the pharma giant simultaneously announced plans to buy an Austrian biotech that has been working on a preclinical vaccine candidate, added a collaboration on another vaccine with the nonprofit IAVI and inked a deal with Ridgeback Biotherapeutics on an early-stage antiviral.

The deal with IAVI covers recombinant vesicular stomatitis virus (rVSV) technology that is the basis for Merck’s successful Ebola Zaire virus vaccine. That’s going into the clinic later this year.

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Af­ter de­cou­pling from Re­gen­eron, Sanofi says it’s time to sell the $13B stake picked up in the mar­riage

With Regeneron shares going for a peak price — after doubling from last fall — Sanofi is putting a $13 billion stake in their longtime partner on the auction block. And Regeneron is taking $5 billion of that action for themselves.

Sanofi — which has been decoupling from Regeneron for more than a year now — bought in big in early 2013, back when Regeneron’s stock was going for around $165 a share. Small investors flocked to the deal, buzzing about an imminent takeover. The buyout chatter wound down long ago.

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Andrew Hopkins, Exscientia founder and CEO (Exscientia)

Af­ter years of part­ner­ships, AI biotech Ex­sci­en­tia lands first ma­jor fi­nanc­ing round at $60M

After years racking up partnerships with biotechs and Big Pharma, the AI drug developer Exscientia has landed its first large financing round.

The UK-based company raised $60 million in a Series C round led by Novo Holdings — more than double the $26 million it garnered in a Series B 18 months ago. The round will help further the company’s expansion into the US and further what it calls, borrowing a term from the software world, its “full-stack capabilities,” i.e. its ability to develop drugs from the earliest stage to the market.

Piv­otal myas­the­nia gravis da­ta from ar­genx au­gur well for FcRn in­hibitors in de­vel­op­ment

Leading the pack of biotechs vying for a piece of the generalized myasthenia gravis (gMG) market with an FcRn inhibitor, argenx on Tuesday unveiled keenly anticipated positive late-stage data on its lead asset, bringing it one step closer to regulatory approval.

Despite steroids, immunosuppressants, acetylcholinesterase inhibitors, and Alexion’s Soliris, patients with the rare, chronic neuromuscular disorder (more than 100,000 in the United States and Europe) don’t necessarily benefit from these existing options, leaving room for the crop of FcRn inhibitors in development.

Covid-19 roundup: Janet Wood­cock steps aside — for now — as FDA drug czar; WHO hits the brakes on hy­droxy study af­ter lat­est safe­ty alarm

The biopharma industry will soon get a look at what the FDA will look like once CDER’s powerful chief Janet Woodcock retires from her post.

Long considered one of the most influential regulators in the agency, if not its single most powerful official when it counts, Woodcock is being detached to devote herself full-time to the White House’s special project to fast-forward new drugs and vaccines for the pandemic. The move comes a week after some quick reshuffling as Woodcock and CBER chief Peter Marks joined Operation Warp Speed. Initially they opted to recuse themselves from any FDA decisions on pandemic treatments and vaccines, after consumer advocates criticized the move as a clear conflict of interest in how the agency exercises oversight on new approvals.

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Eric Edwards, Phlow president and CEO (PR Newswire)

BAR­DA of­fers a tiny start­up up to $812M to cre­ate a US-based drug man­u­fac­tur­er — and the CEO comes with a price goug­ing con­tro­ver­sy on his ré­sumé

BARDA has tapped a largely unknown startup to ramp up production of a list of drugs that may be at risk of running short in the US. And the deal, which comes with up to $812 million in federal funds, was inked by a CEO who found himself in the middle of an ugly price gouging controversy a few years ago.

The feds’ new partner — called Phlow — won a 4-year “base” contract of $354 million, with another $458 million that’s on the table in potential options to sustain the outfit. That would make it one of the largest awards in BARDA’s history.

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Janet Woodcock, director of the Center for Drug Evaluation and Research (AP Images)

Covid-19 roundup: Hit with new con­flict ac­cu­sa­tions, Janet Wood­cock steps out of the agen­cy's Covid-19 chain of com­mand

Two weeks ago, FDA drug chieftain Janet Woodcock was assuring a top Wall Street analyst that any vaccine approved for combating Covid-19 would have to meet high agency standards on safety and efficacy before it’s approved. But over the weekend, after she and Peter Marks took top positions with the public-private operation meant to speed a new vaccine to lightning-fast approvals — they both recused themselves from the review process after an advocacy group argued their roles close to the White House could pose a conflict of interest.

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Re­searchers de­fine ex­act­ly what they saw in the first pos­i­tive remde­sivir study for Covid-19. But what's that worth to Gilead?

Remdesivir can work in fighting Covid-19, particularly for patients with less severe cases, but this is just a first step in the journey to finding combos that can do the job much better.

That’s the bottom line from Gilead’s randomized study published in the New England Journal of Medicine. Analysts were quick to draw conclusions about how the big biotech could turn this into a profitable advantage — with widespread expectation of considerable pricing restraint on Gilead’s part. Anyone looking for a new mountain of cash to count as the world grapples with the pandemic is likely to come away disappointed.