De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

De­spite whis­pers of a busy year for M&A, deal ac­tiv­i­ty in the phar­ma space is ac­tu­al­ly down 30% on a se­mi-an­nu­al­ized ba­sis, ac­cord­ing to PwC’s lat­est re­port on deal ac­tiv­i­ty. But don’t rule out larg­er deals in the sec­ond half of the year, the con­sul­tants said.

Glenn Hun­zinger

PwC phar­ma­ceu­ti­cal and life sci­ences con­sult­ing so­lu­tions leader Glenn Hun­zinger ex­pects to see Big Phar­ma com­pa­nies pick­ing up ear­li­er stage com­pa­nies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear mar­ket con­tin­ues to maul the biotech sec­tor, Hun­zinger said re­cent deals in­di­cate that phar­ma com­pa­nies are still pay­ing above cur­rent trad­ing prices.

“Phar­ma­ceu­ti­cal and life sci­ences com­pa­nies con­tin­ue to ac­tive­ly search for new ca­pa­bil­i­ties and in­or­gan­ic growth, which we be­lieve will lead to a re­bound in deal ac­tiv­i­ty in the sec­ond half of the year,” Hun­zinger said in PwC’s midyear out­look.

A hand­ful of block­buster drugs are star­ing down patent cliffs, in­clud­ing Ab­b­Vie’s Hu­mi­ra and Mer­ck’s can­cer star Keytru­da. A hand­ful of drugs have al­ready lost ex­clu­siv­i­ty this year, such as Roche’s Lu­cen­tis — which gained its first biosim­i­lar ear­li­er this year — and Bris­tol My­ers Squibb’s Revlim­id.

Up­com­ing patent cliffs will put near­ly $180 bil­lion in sales from the largest com­pa­nies at risk be­tween next year and 2028, ac­cord­ing to PwC. But un­like the patent cliff that wel­comed copy­cat com­pe­ti­tion to mol­e­cule drugs back in the 2000s, “ex­pect these sales to be erod­ed more slow­ly, as biosim­i­lars are both hard­er to man­u­fac­ture and have slow­er up­take than their gener­ic coun­ter­parts,” the re­port states.

“With cap­i­tal be­com­ing hard­er to come by for most biotechs, phar­ma is in a good po­si­tion to ac­quire many of these com­pa­nies at a dis­count from their highs of just a cou­ple years ago,” PwC added.

A hand­ful of phar­ma chiefs have al­ready hint­ed at a big year for busi­ness de­vel­op­ment, in­clud­ing As­traZeneca chief Pas­cal So­ri­ot, who said back in April that the com­pa­ny is “con­stant­ly look­ing” for new op­por­tu­ni­ties.

“It is true that the cur­rent en­vi­ron­ment, which is rich in in­no­va­tion but be­com­ing a lit­tle more dif­fi­cult from a fund­ing view­point, that en­vi­ron­ment presents op­por­tu­ni­ties,” So­ri­ot said.

GSK CEO Em­ma Walm­s­ley said the com­pa­ny has “both ap­petite and ca­pac­i­ty” for busi­ness de­vel­op­ment. Back in April, she doled out $1.9 bil­lion to pick up Sier­ra On­col­o­gy and mo­melo­tinib, a drug for­mer­ly aban­doned by Gilead.

Mean­while, Pfiz­er’s new deal­mak­ing chief Aamir Ma­lik said on the com­pa­ny’s Q1 call:

On our BD fo­cus, I think we’ve been very clear that com­pounds that have the po­ten­tial to be break­throughs are where our fo­cus is. And these can be in the form of late-stage clin­i­cal de­vel­op­ment, they can be in ear­li­er med­ical in­no­va­tions as well as, as well as ear­ly launch­es.

It’s pos­si­ble that in­creased scruti­ny from the Fed­er­al Trade Com­mis­sion could lead to more bolt-on deals in the $5 bil­lion to $15 bil­lion range, Hun­zinger not­ed.

The FTC and its peers in Cana­da, Eu­rope and the UK es­tab­lished a work­ing group ear­li­er this year to re­think the way they re­view phar­ma merg­ers — and some fear that an­titrust reg­u­la­tors will slow things down across the en­tire in­dus­try.

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In­no­v­a­tive MedTech De­mands Spe­cial­ist Clin­i­cal Tri­al Reg­u­la­to­ry Af­fairs and De­sign

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Ted Love, Global Blood Therapeutics CEO

Up­dat­ed: Pfiz­er scoops up Glob­al Blood Ther­a­peu­tics and its sick­le cell ther­a­pies for $5.4B

Pfizer is dropping $5.4 billion to acquire Global Blood Therapeutics.

Just ahead of the weekend, word got out that Pfizer was close to clinching a $5 billion buyout — albeit with other potential buyers still at the table. The pharma giant, flush with cash from Covid-19 vaccine sales, apparently got out on top.

The deal immediately swells Pfizer’s previously tiny sickle cell disease portfolio from just a Phase I program to one with an approved drug, Oxbryta, plus a whole pipeline that, if all approved, the company believes could make for a $3 billion franchise at peak.

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BREAK­ING: Math­ai Mam­men makes an abrupt ex­it as head of the big R&D group at J&J

In an after-the-bell shocker, J&J announced Monday evening that Mathai Mammen has abruptly exited J&J as head of its top-10 R&D group.

Recruited from Merck 5 years ago, where the soft spoken Mammen was being groomed as the successor to Roger Perlmutter, he had been one of the top-paid R&D chiefs in biopharma. His group spent $12 billion last year on drug development, putting it in the top 5 in the industry.

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No­vavax shares shred­ded as Covid vac­cine sales fall more than 90% in Q2

Months after Novavax celebrated its first profitable quarter as a commercial company, the Gaithersburg, MD-based company is back in the red.

Sales for Novavax’s Covid-19 vaccine slipped to $55 million last quarter, down from $586 million in Q1, CEO Stanley Erck revealed on Monday after market close. The company’s stock $NVAX plummeted more than 32% in after-hours trading.

Upon kicking off the call with analysts and investors, Erck addressed the elephant in the room:

Uğur Şahin, BioNTech CEO (Kay Nietfeld/picture-alliance/dpa/AP Images)

De­spite falling Covid-19 sales, BioN­Tech main­tains '22 sales guid­ance

While Pfizer raked in almost $28 billion last quarter, its Covid-19 vaccine partner BioNTech reported a rise in total dose orders but a drop in sales.

The German biotech reported over $3.2 billion in revenue in Q2 on Monday, down from more than $6.7 billion in Q1, in part due to falling Covid sales. While management said last quarter that they anticipated a Covid sales drop — CEO Uğur Şahin said at the time that “the pandemic situation is still very much uncertain” — Q2 sales still missed consensus by 14%.

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Pascal Soriot, AstraZeneca CEO (David Zorrakino/Europa Press via AP Images)

As­traZeneca and Dai­ichi Sankyo sprint to mar­ket af­ter FDA clears En­her­tu in just two weeks

Regulators didn’t keep AstraZeneca and Daiichi Sankyo waiting long at all for their latest Enhertu approval.

The partners pulled a win on Friday in HER2-low breast cancer patients who’ve already failed on chemotherapy, less than two weeks after its supplemental BLA was accepted. While this isn’t the FDA’s fastest approval — Bristol Myers Squibb won an OK for its blockbuster checkpoint inhibitor Opdivo in just five days back in March — it comes well ahead of Enhertu’s original Q4 PDUFA date.

Sen­ate Dems cling to a sim­ple ma­jor­i­ty to pass some of the biggest drug pric­ing re­forms ever

The Pharmaceutical Research and Manufacturers of America — and their fleet of drug industry lobbyists on Capitol Hill — are known for never losing.

Whenever a big drug pricing bill comes up, an army of the industry group’s lobbyists descend onto the Hill and either smash it outright or dismantle it piece by piece.

But for perhaps the largest drug pricing reforms ever enacted, after more than a decade of Congress trying and failing to allow Medicare to negotiate prescription drug prices, those same lobbyists and their biopharma clients were dealt a stunning blow on Sunday afternoon.

Anna Protopapas, Mersana CEO

In $1.36B biobuck deal with GSK, Mer­sana touts 'biggest pre­clin­i­cal ADC deal ever'

Days after Enhertu reeled in another FDA nod, with the first-ever green light for HER2-low breast cancer, another antibody drug conjugate biotech claims it has secured the largest preclinical ADC pact to date for a single asset.

AstraZeneca and Daiichi Sankyo made waves with their nearly $7 billion collaboration back in spring 2019, but at that point, Enhertu was already nearing the FDA’s doors with clinical data. The latest ADC tie-up to enter the biopharma fray centers around a preclinical asset, Mersana Therapeutics’ XMT-2056.

FDA commissioner Rob Califf (Tom Williams/CQ Roll Call via AP Images)

With drug pric­ing al­most done, Con­gress looks to wrap up FDA user fee leg­is­la­tion

The Senate won’t return from its summer recess until Sept. 6, but when it does, it officially has 18 business days to finalize the reauthorization of the FDA user fee programs for the next 5 years, or else thousands of drug and biologics reviewers will be laid off and PDUFA dates will vanish in the interim.

FDA commissioner Rob Califf recently sent agency staff a memo explaining how, “Our latest estimates are that we have carryover for PDUFA [Prescription Drug User Fee Act], the user fee funding program that will run out of funding first, to cover only about 5 weeks into the next fiscal year.”