Dave Stack, Pacira BioSciences CEO

Flex­ion heads to the dis­count aisle for a $450M+ merg­er with Paci­ra

Once rid­ing high with its non-opi­oid drug for knee pain, Flex­ion was at the cen­ter of the M&A ru­mor mill for a 10-fig­ure buy­out. Years lat­er, that shine has worn off — and now Flex­ion will hand over the keys in a sig­nif­i­cant­ly small­er ac­qui­si­tion.

Paci­ra Bio­Sciences will ac­quire Flex­ion for $8.50 per share in a deal val­ued at $450 mil­lion, a steep dis­count for a biotech that once com­mand­ed at­ten­tion from the likes of drug gi­ant Sanofi, the com­pa­nies said Mon­day.

The ac­qui­si­tion would val­ue Flex­ion at around $650 mil­lion as Paci­ra plans to is­sue an $8 con­tin­gent val­ue right with the buy­out that would vest in tranch­es at a set of five mile­stones out­lined in the deal, most­ly tied to fu­ture sales of lead prod­uct Zil­ret­ta, Paci­ra said. Those mile­stones in­clude:

  • $1 per share if to­tal cal­en­dar year net sales of Zil­ret­ta hit $250 mil­lion
  • $2 per share if Zil­ret­ta sales hit $375 mil­lion
  • $3 per share if Zil­ret­ta sales hit $500 mil­lion
  • $1 per share if can­di­date FX201 gets an FDA ap­proval
  • $1 per share if can­di­date FX301 gets an FDA ap­proval.

The CVR ex­pires on Dec. 31, 2030, the com­pa­nies said, and the ac­qui­si­tion is ex­pect­ed to close in Q4.

Rid­ing a wave of in­ter­est af­ter its ini­tial ap­proval for Zil­ret­ta, an in­ject­ed cor­ti­cos­teroid sus­pen­sion for knee os­teoarthri­tis, back in 2017, Flex­ion was once grist for M&A ru­mors, even re­port­ed­ly work­ing to­geth­er with Sanofi on a buy­out worth more than $1 bil­lion. But as time passed — and Zil­ret­ta sales flagged — the com­pa­ny’s once-lofty val­u­a­tion came back down to Earth.

Even still, Paci­ra, the mak­er of prod­ucts like bupi­va­caine in­jec­tion Ex­par­el for post-sur­gi­cal pain, saw enough val­ue in Flex­ion’s pipeline to ink a deal, look­ing for a worth­while com­ple­ment to its own prod­uct base. Here’s how Paci­ra CEO Dave Stack ex­plained his com­pa­ny’s ra­tio­nale:

This ac­qui­si­tion is a ma­jor mile­stone in our strat­e­gy to build a ro­bust of­fer­ing of nov­el, non-opi­oid treat­ments to im­prove pa­tient care along the neur­al pain path­way while si­mul­ta­ne­ous­ly pro­vid­ing us with a com­ple­men­tary com­mer­cial as­set in Zil­ret­ta for the treat­ment of OA knee pain. We be­lieve the Flex­ion port­fo­lio fur­ther so­lid­i­fies Paci­ra as a leader in opi­oid-spar­ing pain man­age­ment as we con­tin­ue to re­de­fine the role of opi­oids as a last re­sort res­cue med­ica­tion. Im­por­tant­ly, this ac­qui­si­tion cre­ates di­ver­si­fi­ca­tion and growth to our topline while pro­vid­ing what we would ex­pect to be mean­ing­ful syn­er­gies that should re­sult in sub­stan­tial near- and long-term ac­cre­tion to our cash flows and earn­ings.

Zil­ret­ta, for its part, cleared just $28.2 mil­lion in Q2 of this year — a 15% growth clip from the same time pe­ri­od last year, but still a far cry from the num­bers out­lined in the CVR. But Flex­ion does have a Phase III tri­al for Zil­ret­ta in shoul­der os­teoarthri­tis com­ing up and thinks it has some room to work across oth­er ther­a­peu­tic ar­eas. Mean­while, FX201, a gene ther­a­py for knee os­teoarthri­tis, and FX301, a top­i­cal fu­napi­de for­mu­la­tion, are cur­rent­ly cy­cling through Phase I.

Paci­ra man­age­ment is plan­ning to host a call with an­a­lysts at 8:30 am ET. This sto­ry will be up­dat­ed.

IDC: Life Sci­ences Firms Must Em­brace Dig­i­tal Trans­for­ma­tion Now

Pre-pandemic, the life sciences industry had settled into a pattern. The average drug took 12 years and $2.9 billion to bring to market, and it was an acceptable mode of operations, according to Nimita Limaye, Research Vice President for Life Sciences R&D Strategy and Technology at IDC.

COVID-19 changed that, and served as a proof-of-concept for how technology can truly help life sciences companies succeed and grow, Limaye said. She recently spoke about industry trends at Egnyte’s Life Sciences Summit 2022. You should watch the entire session, free and on-demand, but here’s a brief recap of why she’s urging life sciences companies to embrace digital transformation.

Geoffrey Porges, new Schrödinger CFO

Long­time an­a­lyst Ge­of­frey Porges de­parts SVB to lead fi­nances at a drug dis­cov­ery shop

Geoffrey Porges has ended his two-decade run as a biotech analyst, as the former SVB Securities vice chair began as CFO of Schrödinger on Thursday.

The long-running analyst, who previously headed up vaccines marketing at Merck before the turn of the millennium, will lead the financial operations of the 700-employee company as Schrödinger broadens its focus from a drug discovery partner to also building out an in-house pipeline, with clinical trial No. 1 set to begin next quarter.

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FDA ap­proves one of the prici­est new treat­ments of all time — blue­bird's gene ther­a­py for be­ta tha­lassemia

The FDA on Wednesday approved the first gene therapy for a chronic condition — bluebird bio’s new Zynteglo (beti-cel) as a potentially curative treatment for those with transfusion-dependent thalassemia.

The thumbs-up from the FDA follows a unanimous adcomm vote in June, with outside experts pointing to extraordinary efficacy, with 89% of subjects with TDT who received beti-cel having achieved transfusion independence.

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James Sabry, Roche global head of pharma partnering

Roche, Genen­tech plunk down $60M up­front to part­ner with Chi­nese phar­ma on PRO­TAC-based prostate can­cer drug

Roche and Genentech are always on the hunt for deals, and on Thursday they found their newest partner.

The pair will team up with the Chinese pharma company Jemincare to push forward a new program for prostate cancer, the companies announced. Roche is ponying up $60 million upfront to get its hands on the candidate and promising up to $590 million in biobucks, plus royalties, down the line.

In return, Genentech will get a worldwide license to develop the program, known as JMKX002992, and bring it to market.

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Andrew Hopkins, Exscientia CEO

Ex­sci­en­tia ter­mi­nates Bay­er pact half a year ear­ly, col­lect­ing small por­tion of €240M promised

Bayer and Exscientia are winding down their three-year collaboration, leaving the big German pharma to take the AI-designed compounds born out of the pact further.

London-based Exscientia revealed in its Q2 update that the partners have “mutually agreed to end” their collaboration, which kicked off in early 2020, after recently achieving a drug discovery milestone. In an SEC filing, Exscientia said it terminated the pact on May 30, about six months early.

Etleva Kadilli, director of UNICEF’s supply division

GSK lands first-ever UNICEF con­tract for malar­ia vac­cine worth $170M

GSK has landed a new first from UNICEF the first-ever contract for malaria vaccines, worth up to $170 million for 18 million vaccine doses distributed over the next three years.

The vaccine, known as Mosquirix or RTS,S, won WHO’s backing last October after a controversial start, but UNICEF said these doses will potentially save thousands of lives every year.

“We hope this is just the beginning,” Etleva Kadilli, director of UNICEF’s supply division, said. “Continued innovation is needed to develop new and next-generation vaccines to increase available supply, and enable a healthier vaccine market. This is a giant step forward in our collective efforts to save children’s lives and reduce the burden of malaria as part of wider malaria prevention and control programmes.”

Tom Barnes, Orna Therapeutics CEO

UP­DAT­ED: 'We have failed to fail': Mer­ck gam­bles $250M cash on a next-gen ap­proach to mR­NA — af­ter punt­ing its big al­liance with Mod­er­na

Merck went in deep on its collaboration with Moderna on new mRNA programs, and dropped them all over time, including their RSV partnership. But after writing off what turned out as one of the most successful infectious disease players in the business, Merck is coming in this morning with a new preclinical alliance — this time embracing a biotech that hopes to eventually outdo the famously successful mRNA in a new run at vaccines and therapeutics.

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Atomwise CEO and co-founder Abraham Heifets (left) and co-founder Izhar Wallach

A cou­ple bil­lion for Ex­sci­en­tia was on­ly part of Sanofi's AI am­bi­tions, as the Big Phar­ma adds Atom­wise to the ta­ble

Sanofi made clear its AI ambitions were real at the beginning of this year when the Big Pharma took its drug discovery collaboration with Exscientia to the next level, inking a pact that could birth 15 drugs and deliver $5.3 billion to the UK partner.

Seven months later, the AI blueprint is far from over at the French Big Pharma, as another of the much-hyped drug discovery startups is coming to the table in a five-drug deal. Sanofi will pay Atomwise $20 million to kick off the hunt for up to five targets, which are aimed at leading to the creation of new small molecules. Another $1 billion is on the line — as are royalties — and the companies kept mum on the specific diseases or broader therapeutic areas of interest.

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Bayer's first DTC ad campaign for chronic kidney disease drug Kerendia spells out its benefits

Bay­er aims to sim­pli­fy the com­plex­i­ties of CKD with an ABC-themed ad cam­paign

Do you know the ABCs of CKD in T2D? Bayer’s first ad campaign for Kerendia tackles the complexity of chronic kidney disease with a play on the acronym (CKD) and its connection to type 2 diabetes (T2D).

Kerendia was approved last year as the first and only non-steroidal mineralocorticoid receptor antagonist to treat CKD in people with type 2 diabetes.

In the TV commercial launched this week, A is for awareness, B is for belief and C is for cardiovascular, explained in the ad as awareness of the connection between type 2 and kidney disease, belief that something can be done about it, and cardiovascular events that may be reduced with treatment.

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