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

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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Michel Vounatsos, Getty Images

UP­DAT­ED: Stay tuned: Bio­gen’s num­bers are great — it’s their wor­ri­some fu­ture that leaves an­a­lysts skit­tish

Biogen came out with an upbeat assessment of their Q2 numbers today, discounting the arrival of a key rival for its blockbuster Spinraza franchise. But the top execs remain grimly determined to not say much anything new about the sore points that have dragged down its stock, including the future of its big investment in Alzheimer’s or how it plans to invest the considerable cash that the big biotech continues to reap.

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Why wait? Cel­gene re­struc­tures a big Jounce pact — ze­ro­ing in on new I/O path­way with $530M deal and bump­ing ICOS

Celgene’s business team isn’t waiting for the big merger with Bristol-Myers Squibb to go through before syncing its strategy with the new mother ship.

Tuesday evening the big biotech unveiled a $530 million deal — $50 million in upfront cash — to amend their alliance with Jounce Therapeutics $JNCE to gain worldwide rights to JTX-8064, an antibody that targets the LILRB2 receptor on macrophages. Their old, $2.6 billion deal is being scrapped, leaving Jounce with a pipeline that includes the lead drug, the ICOS-targeting vopratelimab.

PACT Phar­ma says it's per­fect­ed the tech to se­lect neoanti­gens for per­son­al­ized ther­a­py — now on­to the clin­ic

At PACT Pharma, the lofty goal to unleash a “tsunami” of T cells personalized for each patient has hinged on the ability to correctly identify the neoantigens that form something of a fingerprint for each tumor, and extract the small group of T cells primed to attack the cancer. It still has a long way to go testing a treatment in humans, but the biotech says it has nailed that highly technical piece of the process.

UP­DAT­ED: My­ovan­t's uter­ine fi­broid drug looks com­pet­i­tive in PhI­II — but can they van­quish mighty Ab­b­Vie?

Vivek Ramaswamy’s Myovant $MYOV has closely matched its positive first round of Phase III data for their uterine fibroid drug relugolix, setting up a head-to-head rivalry with pharma giant AbbVie as the little biotech steers to the market with a planned filing in Q4.

Here’s how Myovant plans to prevail over the AbbVie $ABBV empire.

In the study, 71.2% of women receiving once-daily relugolix combination therapy achieved the clinical response they were looking for, compared to only 14.7% in the control arm. The data comfortably reflected the same outcomes in the first Phase III — 73.4% of women receiving once-daily oral relugolix combination therapy achieved the responder criteria compared with 18.9% of women receiving placebo — which will reassure regulators that they are getting the carefully randomized data that qualifies for the FDA’s gold standard for success.

Lit­tle Mar­i­nus sees its shares eclipsed as the Sage ri­val fails to com­pare on PPD in PhII

The executive team at Sage $SAGE have skirted another potential pitfall on its way to racking up a big future for its depression drug Zulresso.

Little Marinus Pharmaceuticals $MRNS had sought to challenge the Sage drug with an IV formulation — followed by an oral version — of ganaxolone for postpartum depression. But researchers say their Phase II study failed to positively differentiate itself from a placebo at 28 days — leaving them to hold up “clinically meaningful” data within the first day of administration compared to the control arm.

Roche cuts loose Tam­i­flu OTC rights, hand­ing Sanofi the keys as the phar­ma gi­ant dou­bles down on Xofluza

Roche set out to make a better flu medicine than Tamiflu as that franchise was headed to a generic showdown. Now they’ll see just how well Xofluza stacks up against the mainstay drug after handing off over-the-counter rights in the US to Sanofi.

Sanofi $SNY says it will now step in to negotiate a deal with the FDA to steer Tamiflu into the OTC market, a role that could well involve new studies to ease passage of the drug out of doctor’s hands and into the consumer end of the market. And the French pharma giant will have first dibs over “selected” OTC markets around the world as they push ahead.

Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.