To counter a law­suit, Bris­tol-My­ers out­lines how the big Cel­gene buy­out will show­er $187M-plus on Mor­gan Stan­ley

Any­one look­ing to see why in­vest­ment bankers love big time M&A so much should check out Bris­tol-My­ers Squibb’s new SEC fil­ing Thurs­day evening.

In the lead­up to its megamerg­er with Cel­gene, the phar­ma gi­ant has been pep­pered by a slate of law­suits from un­hap­py in­vestors. And to counter one that threat­ened to pos­si­bly de­lay their deal— now fac­ing a cru­cial share­hold­er vote next week that Bris­tol-My­ers is wide­ly ex­pect­ed to win — the Bris­tol-My­ers team spelled out the $187 mil­lion-plus in fees they’re pay­ing to Mor­gan Stan­ley, which of­fered their opin­ion on the fair­ness of the buy­out pact — from the Bris­tol-My­ers per­spec­tive on­ly.

Mor­gan Stan­ley’s ad­vi­so­ry ser­vices and fair­ness opin­ion is worth $82 mil­lion — $15 mil­lion of that up front and the rest when the deal goes through. Mor­gan Stan­ley is al­so han­dling part of the fi­nanc­ing as well as li­a­bil­i­ty ser­vices, which nets them a cool $100 mil­lion. Then there’s $5.3 mil­lion for an in­ter­est rate swap op­tion.

Their fair­ness opin­ion re­lat­ed on­ly to what Bris­tol-My­ers was pay­ing. And here’s what they said:

Based on and sub­ject to the fore­go­ing, we are of the opin­ion on the date here­of that the Con­sid­er­a­tion to be paid by the Buy­er pur­suant to the Merg­er Agree­ment is fair from a fi­nan­cial point of view to the Buy­er.

There’s more mon­ey to come, but the pay­back can’t be cal­cu­lat­ed yet. Bris­tol-My­ers has set up Mor­gan Stan­ley to act as a deal­er in an ac­cel­er­at­ed share re­pur­chase pro­gram for af­ter the deal clos­es. But that has yet to hap­pen. And then Bris­tol-My­ers al­so in­dem­ni­fied Mor­gan Stan­ley for any li­a­bil­i­ties that could arise as a re­sult of their par­tic­i­pa­tion.

How­ev­er the share­hold­ers make out in this deal, and there are clear­ly many aside from their lead in­vestor Welling­ton who are none too hap­py, Mor­gan Stan­ley will do fine. In case you were won­der­ing.


Im­age: Shut­ter­stock

Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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Gilead baits new al­liance with $45M up­front, div­ing in­to the busy pro­tein degra­da­tion field

Gilead is jump­ing on board the pro­tein degra­da­tion band­wag­on. And they’re turn­ing to a low-pro­file Third Rock start­up for the ex­per­tise. But if you were look­ing for a trans­for­ma­tion­al deal to kick up fresh en­thu­si­asm for Gilead, you’ll have to re­main pa­tient.

This one will have a long way to go be­fore they get in­to the clin­ic.

The big biotech said Wednes­day morn­ing that it is pay­ing $45 mil­lion up­front and re­serv­ing a whop­ping $2.3 bil­lion in biotech bucks if San Fran­cis­co-based Nurix can point the way to new can­cer ther­a­pies, as well as drugs for oth­er, un­spec­i­fied dis­eases.

In­vestor day prep at Mer­ck in­cludes a new strat­e­gy to pick up the pace on M&A — re­port

Mer­ck’s re­cent deals to buy up two bolt-on biotechs — Ti­los and Pelo­ton — weren’t an aber­ra­tion. In­stead, both ac­qui­si­tions mark a new strat­e­gy to beef up its dom­i­nant can­cer drug op­er­a­tions cen­tered on Keytru­da while look­ing to ad­dress grow­ing con­cerns that too many of its eggs are in the one I/O bas­ket for their PD-1 pro­gram. And Mer­ck is go­ing af­ter more small- and mid-sized buy­outs to calm those fears.

How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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A new num­ber 1 drug? Keytru­da tapped to top the 10 biggest block­busters on the world stage by 2024

Analysts may be fretting about Keytruda’s longterm prospects as a host of rival therapies elbow their way to the market. But the folks at Evaluate Pharma are confident that last year’s $7 billion earner is headed for glory, tapping it to beat out the current #1 therapy Humira as AbbVie watches that franchise swoon over the next 5 years.

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Sanofi aligns it­self with Google to stream­line drug de­vel­op­ment

Tech­nol­o­gy is bleed­ing in­to health­care, and big phar­ma is rid­ing the wave. Sanofi $SNY ap­point­ed its first chief dig­i­tal of­fi­cer this Feb­ru­ary, fol­low­ing the foot­steps of its peers. By May, the French drug­mak­er and some of its big phar­ma com­pa­tri­ots joined forces with Google par­ent Al­pha­bet’s Ver­i­ly unit to aug­ment clin­i­cal tri­al re­search. On Tues­day, the Parisian com­pa­ny tied up with Google to ac­cess its cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence tech to spur the de­vel­op­ment of new ther­a­pies.