Ca­nine club: Elan­co An­i­mal Health makes takeover play for part­ner Aratana in up to $245M deal

Bask­ing in the suc­cess of their painkiller part­ner­ship, Elan­co An­i­mal Health, on Fri­day, laid out plans to swal­low its col­lab­o­ra­tor Aratana Ther­a­peu­tics in a deal po­ten­tial­ly worth up to $245 mil­lion.

Elan­co An­i­mal Health $ELAN,  a spin off from par­ent com­pa­ny Lil­ly $LLY last year, has been eye­ing Kansas-based pet ther­a­peu­tics com­pa­ny Aratana $PETX since its in­cep­tion, when it was in­vest­ing as a lim­it­ed part­ner in Cul­ti­vian, a ven­ture cap­i­tal funds that par­tic­i­pat­ed in Aratana’s ear­ly fi­nanc­ing rounds. In 2016, Elan­co and Aratana joined forces to de­vel­op, man­u­fac­ture and com­mer­cial­ize Gal­liprant, a ca­nine os­teoarthri­tis pain med­i­cine — which gen­er­at­ed 2018 sales of $44 mil­lion, and is steadi­ly gain­ing mar­ket share, dri­ven by a need for safer pain al­ter­na­tives to NSAIDs, an ex­pand­ed dose op­tion, and launch in Eu­rope.

Aratana has al­so con­tributed two more mar­ket­ed prod­ucts to Elan­co’s ar­se­nal: En­tyce, the on­ly FDA-ap­proved ap­petite-stim­u­lat­ing ther­a­peu­tic in dogs, and Noci­ta, a long-act­ing lo­cal anes­thet­ic that pro­vides up to 72 hours of post-op­er­a­tive pain re­lief fol­low­ing cer­tain surg­eries in dogs and cats.

Elan­co’s rev­enue is dri­ven by three tar­get­ed ar­eas: com­pan­ion an­i­mal dis­ease pre­ven­tion, com­pan­ion an­i­mal ther­a­peu­tics, and food an­i­mal fu­ture pro­tein and health, which cur­rent­ly ac­count for 61% of sales, Cowen an­a­lysts wrote in a note last month, pre­dict­ing that con­tri­bu­tion will grow to 66% by 2024.

The deal will strength­en Elan­co’s foothold in the com­pan­ion an­i­mal mar­ket, which ac­counts for 36% of sales, Cred­it Su­isse’s Erin Wright wrote in a note on Fri­day.

Aratana is a tempt­ing prospect, with its pipeline of five prod­uct can­di­dates in de­vel­op­ment for con­di­tions such as atopic der­mati­tis, which will po­ten­tial­ly ac­cel­er­ate Elan­co’s en­try in­to the fast-grow­ing mar­ket to com­pete with Zoetis’s $ZTS block­buster Apo­quel and Cy­to­point, Wright said.

Aratana’s ex­ist­ing prod­ucts could al­so ben­e­fit from Elan­co’s broad­er on-the-ground US pres­ence and the po­ten­tial to pur­sue in­ter­na­tion­al ap­provals, Elan­co said.

The an­i­mal health (AH) space is ripe for con­sol­i­da­tion, Cred­it Su­isse an­a­lysts wrote in March.

“(I)ndus­try con­sol­i­da­tion is pred­i­cat­ed on the need for AH com­pa­nies to ex­pand their mar­ket op­por­tu­ni­ties across ge­o­gra­phies and in tan­gen­tial busi­ness­es to low­er ex­po­sure to any one re­gion, prod­uct line, or species. Clear­ly, this view is shared by the an­i­mal health in­dus­try con­stituents, which have been ac­tive on the trans­ac­tion front…We con­tin­ue to view AH as an at­trac­tive al­ter­na­tive health­care play, with in­her­ent ad­van­tages over hu­man health­care with more ef­fi­cient R&D op­er­a­tions, more sus­tain­able prod­uct port­fo­lios, lim­it­ed gener­ic threats, and es­sen­tial­ly no di­rect ex­po­sure to pay­or re­im­burse­ment cuts.”

The Elan­co/Aratana deal — ex­pect­ed to close in mid-2019 — is struc­tured as a stock-for-stock trans­ac­tion, with a cash con­tin­gent val­ue right (CVR) of $0.25 to be grant­ed to Aratana share­hold­ers as of the clos­ing date if En­tyce achieves cer­tain sales lev­els be­fore the end of 2021. This stock por­tion of the deal is val­ued at about $234 mil­lion, but with the ad­di­tion of the CVR it could climb to $245 mil­lion.

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Por­tion of Neil Wood­ford’s re­main­ing in­vest­ments, in­clud­ing Nanopore, sold off for $284 mil­lion

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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José Basel­ga finds promise in new class of RNA-mod­i­fy­ing can­cer tar­gets, lock­ing in 3 pre­clin­i­cal pro­grams with $55M

Having dived early into some of the RNA breakthroughs of the last decades — betting on Moderna’s mRNA tech and teaming up with Silence on the siRNA front — AstraZeneca is jumping into a new arena: going after proteins that modify RNA.

Their partner of choice is Accent Therapeutics, which is receiving $55 million in upfront payment to steer a selected preclinical program through to the end of Phase I. After AstraZeneca takes over, the Lexington, MA-based startup has the option to co-develop and co-commercialize in the US — and collect up to $1.1 billion in milestones in the long run. The deal also covers two other potential drug candidates.

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Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.