Cel­gene bags CAR-T play­er Juno in $9B buy­out as biotech M&A sud­den­ly ex­plodes

The buy­out buzz was ac­cu­rate.

Cel­gene $CELG has struck a deal to buy Juno Ther­a­peu­tics $JUNO for $87 a share, or about $9 bil­lion, in­stant­ly vault­ing in­to the front ranks of the CAR-T com­pa­nies. And they plan to stay there, vow­ing to be­come the pre­em­i­nent play­er in one of the most com­pet­i­tive R&D ri­val­ries in the in­dus­try.

Mark Alles

Cel­gene stamped the deal with its own bull­ish fore­cast that the buy­out will quick­ly de­liv­er a new CAR-T that will hit peak sales of $3 bil­lion a year.

The buy­out gives Cel­gene JCAR017, which has pro­duced some stel­lar ef­fi­ca­cy and safe­ty da­ta. The ther­a­py al­so val­i­dates Juno’s bet that it can make a come­back in a field where it was blight­ed by the lethal fail­ure of its lead pro­gram, which killed pa­tients both be­fore and af­ter an FDA hold.

Tak­ing the lessons it had learned along the way, Juno had won back in­vestors with proof that it could over­come the safe­ty is­sues that scut­tled JCAR015. And Cel­gene is now pay­ing a hefty pre­mi­um be­cause of it.

For Cel­gene, the $9 bil­lion deal al­so helps put some of its own set­backs in the rear view mir­ror, as well as some shaky fi­nan­cials that spooked in­vestors late last year. In a call with in­vestors Mon­day morn­ing, Cel­gene CEO Mark Alles al­so un­der­scored that their BC­MA CAR-T part­ner­ship with blue­bird bio $BLUE re­mains a top pri­or­i­ty, even though they are al­so buy­ing a ri­val BC­MA pro­gram at Juno.

The ex­ec­u­tive team al­so hit hard on how the ac­qui­si­tion will fit in­to its ex­ist­ing I/O pipeline plans, which in­cludes a new­ly ac­quired PD-1 as it plans to grad­u­al­ly move past its re­liance on Revlim­id for its rev­enue per­for­mance. And the com­pa­ny plans to keep the op­er­a­tions Juno has built up in the Seat­tle area, mak­ing it a new cen­ter of ex­cel­lence in the com­pa­ny.

Some top an­a­lysts may al­so be dis­ap­point­ed by the fi­nal val­ue num­ber. Leerink in par­tic­u­lar was look­ing for Cel­gene to fork over $93 a share, which is what Cel­gene pegged the price at when it bought a mi­nor­i­ty share in the biotech.

CAR-T has been one of the big suc­cess sto­ries for biotech, of­fer­ing a new ap­proach to en­gi­neer­ing T cells in­to at­tack weapons fo­cused on can­cer cells. No­var­tis and Kite led the way, and Gilead re­cent­ly jumped in with a $12 bil­lion deal to buy Kite just ahead of its pi­o­neer­ing first ap­proval. Juno sits well be­hind the two lead­ers, but Cel­gene is bet­ting that it can still jump in just as the mar­ket­ing op­er­a­tions be­gin to ma­ture, leav­ing plen­ty of fran­chise val­ue to carve out for it­self. And the race for next-gen tech is al­ready well un­der­way as the lead­ers look to ex­pand from blood can­cers in­to sol­id tu­mors.

The deal, com­ing right on the heels of Sanofi’s $11.6 bil­lion buy­out of Biover­a­tiv in a play for the he­mo­phil­ia mar­ket, will al­so stoke hopes in the bank­ing com­mu­ni­ty for a burst of new M&A deals in biotech, which will rain cash and fees in the in­dus­try af­ter a long dry spell.

It will take awhile be­fore it be­gins to pay off for Cel­gene, though. In their state­ment to­day, the com­pa­ny notes:

The ac­qui­si­tion is ex­pect­ed to be di­lu­tive to ad­just­ed EPS (earn­ings per share) in 2018 by ap­prox­i­mate­ly $0.50 and is ex­pect­ed to be in­cre­men­tal­ly ad­di­tive to net prod­uct sales in 2020. There is no change to the pre­vi­ous­ly dis­closed 2020 fi­nan­cial tar­gets of to­tal net prod­uct sales of $19 bil­lion to $20 bil­lion and ad­just­ed EPS greater than $12.50.

Notes Alles:

Juno’s ad­vanced cel­lu­lar im­munother­a­py port­fo­lio and re­search ca­pa­bil­i­ties strength­en Cel­gene’s glob­al lead­er­ship in hema­tol­ogy and adds new dri­vers for growth be­yond 2020.

https://twit­ter.com/brad­lon­car/sta­tus/955414778276732930

Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; and more

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As you start planning for #JPM23, we hope you will consider joining Endpoints News for our live and virtual events. For those who are celebrating Thanksgiving, we hope you are enjoying the long weekend with loved ones. And if you’re not — we’ll see you next week!

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Rob Davis, Merck CEO

Up­dat­ed: No Seagen here: 'Do more' means a small $1.35B pur­chase of Ima­go for Mer­ck

Merck is making an acquisition, the Big Pharma announced before Monday’s opening bell. No, Seagen is not entering the fold, as had been speculated for quarters.

Folding under Merck’s wings will be Pfizer-backed Imago BioSciences. For nearly a year, Merck CEO Rob Davis has been saying the pharma giant needs to “do more” on the business development front after its 2021 $11.5 billion acquisition of Acceleron.

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Paul Perreault, CSL Behring CEO

CSL lands FDA ap­proval for he­mo­phil­ia B gene ther­a­py, sets $3.5M list price

The FDA has approved the world’s first gene therapy for hemophilia B, ushering into the market a treatment that’s historic in both what it promises to do and how much it will cost.

CSL will be marketing the drug, Hemgenix, at a list price of $3.5 million — which sets a new record for the most expensive single-use gene therapy in the US.

In a statement provided to Endpoints News, the Australian company noted that the current costs of treating people with moderate to severe hemophilia B can be significant over a lifetime. By some estimates, healthcare systems could spend more than $20 million per person.

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Elon Musk (GDA via AP Images)

Biggest drug com­pa­nies halt­ed Twit­ter ad buys af­ter Lil­ly in­sulin spoof

Almost all of the drug industry’s biggest advertisers cut their spending on Twitter to zero or near-zero over the last two weeks amid worries about impersonation of their brands by pranksters and the future of the social media company.

Among 18 of the biggest pharmaceutical advertisers in the US market, 12 cut their Twitter ad spending to nothing for the week beginning Nov. 14, according to Pathmatics, which tracks data on prescription drug ad spending as well as general corporate advertising. The list of drugmakers cutting spending to zero includes Merck, AstraZeneca, Eli Lilly, Novartis, Pfizer and others.

Alzheimer’s drug bites the dust; Re­struc­ture, re­struc­ture, re­struc­ture; Land­mark di­a­betes OK; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Being in the news business can give one a warped sense of time — it feels like quite a while since we published some of these stories below. But next Saturday’s Endpoints Weekly will definitely be shorter, as we take off Thursday and Friday for Thanksgiving. We will still have the abbreviated edition in your inbox at the usual time.

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Peter Hecht, Cyclerion CEO

Cy­cle­ri­on board quick­ly nix­es CEO Pe­ter Hecht's un­ortho­dox pitch for low cash re­serves

It’s been less than two months since Cyclerion laid out a new R&D strategy around its lead drug in mitochondrial diseases, one that triggered the company to lay off close to half of its employees and explore licensing deals for the rest of the pipeline. But CEO Peter Hecht apparently has other plans in mind.

Hecht, who led Ironwood for close to 20 years before spinning out Cyclerion, disclosed in an SEC filing Monday that a “newly-formed private company” that he “may have or may acquire an interest” submitted a proposal to Cyclerion the day prior to purchase Cyclerion’s CNS assets, including CY6463 and CY3018 — the top two programs listed in the pipeline.

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Image: Shutterstock

MIT re­searchers re­veal DNA "Paste" tech be­hind lat­est gene edit­ing start­up

MIT scientists have developed a tool that they say can insert large gene sequences where they want in the genome.

In a paper published Thursday in Nature Biotechnology, MIT fellows Omar Abudayyeh, Jonathan Gootenberg and colleagues detail a technology they call PASTE, which they say can potentially be used to insert long strands of DNA and treat genetic diseases caused by many different mutations, such as cystic fibrosis and Leber congenital amaurosis, a rare eye disorder that causes blindness.

J&J's Spra­va­to pulls a PhI­II win against Sero­quel XR in treat­ment-re­sis­tant de­pres­sion

A day before Thanksgiving, J&J’s Janssen has a new cut of Phase III Spravato data to be grateful for.

The pharma giant announced on Wednesday that its nasal spray, also known as esketamine, beat extended-release quetiapine, previously sold by AstraZeneca as Seroquel XR, in treatment-resistant depression (TRD). Of 676 adults, a significantly higher number of patients on Spravato were able to achieve remission and avoid relapse after 32 weeks, according to J&J.

Dermavant Sciences' first consumer TV ad for its Vtama psoriasis med shows people ready for a new topical treatment.

Roivant’s Der­ma­vant de­buts first-ever TV com­mer­cial for pso­ri­a­sis cream Vta­ma

Dermavant Sciences has been marketing its first product, psoriasis med Vtama, to dermatologists for months, but on Tuesday it rolled out its first consumer campaign. The debut DTC effort including a streaming TV commercial encourages patients to a “Topical Uprising” in a nod to Vtama being a topical cream.

In the new commercial, a swell of people discards scarves and jacket coverings, gathering in the street to converge on a pharmacy to demand a steroid-free prescription. A moment of levity follows when a pharmacist says, “You know you can just talk to your doctor, right?” The gathered crowds collectively says, “Oh.”

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