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.

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A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

The FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. They plan to squash it — and per­ma­nent­ly ex­ile him

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition. And their lawsuit is asking that Shkreli — with several years left on his prison sentence — be banned permanently from the pharma industry.

UP­DAT­ED: Ac­celeron res­ur­rects block­buster hopes for so­tater­cept with pos­i­tive PhII — and shares rock­et up

Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

“We’re thrilled to report such positive topline results from the PULSAR trial,” Acceleron CEO Habib Dable said in a statement. The company said in a conference call they plan on discussing a Phase III trial design with regulators.

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Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”

Pfiz­er ax­es 6 ear­ly to late-stage can­cer stud­ies from the pipeline — with one oth­er cut for sick­le cell dis­ease

Pfizer trimmed a group of 3 R&D programs using their PD-L1 Bavencio — partnered with Merck KGaA — in their latest pipeline cull.

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UP­DAT­ED: In­cyte scores much need­ed PhI­II suc­cess — and of course it’s de­liv­ered by rux­oli­tinib

Incyte’s efforts to breathe a second life into ruxolitinib — its JAK inhibitor sold in pill form as Jakafi — has been greeted with clear, if preliminary and unsurprising, Phase III success.

Topline data from the TRuE-AD2 cements ruxolitinib’s foundational importance for Incyte, and gives analysts hope that there might yet be room for growth in a pipeline that’s suffered multiple R&D setbacks.

Stephen Hahn, AP

The FDA un­veils a new reg­u­la­to­ry frame­work to speed along gene ther­a­pies, re­ward­ing the lead­ing play­ers

Bioregnum Opinion Column by John Carroll

The emphasis at the FDA over the past 5 years or so has been on assisting drug developers as much as they can to speed up regulatory reviews and push more drugs into the market. And they are now crafting a final set of regulations aimed at flagging through a whole new generation of gene therapies in clinical testing at a rapid clip.

In a set of 6 prospective guidances posted on the FDA web site Tuesday morning, FDA commissioner Stephen Hahn committed the agency to staying flexible in handing out designations that are critical to gaining early approvals for drugs that claim to be once-and-done but don’t have anything close to the data needed to prove it.

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