From din­ner in Mu­nich to $5.85 a share, Im­mune De­sign ex­ecs pushed for every pen­ny they could get from the Mer­ck bar­gain buy­out

Car­los Paya

Oc­to­ber 11, 2018 was Black Thurs­day at Im­mune De­sign $IMDZ. That’s when the com­pa­ny broad­cast that its lead pro­gram for CMB305 com­bined with Roche’s Tecen­triq was a bust in re­lapsed syn­ovial sar­co­ma. CEO Car­los Paya then shift­ed fo­cus to G100 and slashed the staff by 20% as its stock plunged 34%. Shares closed at $1.85.

Days lat­er, dur­ing a din­ner meet­ing in Mu­nich while at­tend­ing ES­MO, a “se­nior ex­ec­u­tive” at Mer­ck — who had been col­lab­o­rat­ing with Im­mune De­sign for the last 3 years on Keytru­da — said the phar­ma gi­ant $MRK was in­ter­est­ed in switch­ing from li­cens­ing talks to buy­ing the bat­tered com­pa­ny out­right.

Paya’s im­me­di­ate an­swer: The com­pa­ny isn’t for sale — at least not at any­thing like the cur­rent stock price.

That was the be­gin­ning of a lengthy se­ries of back-and-forth bids and par­ries. With its share price on the ropes, the biotech steered away from 2 CVRs worth up to $85 mil­lion each, along with the ini­tial bid of $200 mil­lion in cash. 

Stephen Brady

The M&A deal for Im­mune De­sign is at the op­po­site end of a spec­trum lit up by block­buster deals for the likes of Kite or Loxo and AveX­is. There were no vast rich­es be­stowed on suc­cess­ful com­pa­ny ex­ecs. But at a time when a lot of biotechs are liv­ing with de­pressed share val­ues, it’s like­ly we’ll be see­ing more of these deals — based on terms like the un­pop­u­lar CVR, suc­cess­ful­ly pushed in the Cel­gene buy­out — as the ma­jor play­ers gear up with new ac­qui­si­tions.

But that doesn’t mean you have to give away the store.

Over 4 months of talks — while Im­mune De­sign was try­ing, un­suc­cess­ful­ly, to spark some out­side bids among a slate of prospects — Mer­ck and the lit­tle biotech grad­u­al­ly came to $5.85 per share as a win­ning bid. And it came down to pen­nies, with Im­mune De­sign push­ing for an ex­tra nick­el at the end — even as Mer­ck was ready to call their high­est, best of­fer. Dur­ing that stretch, Im­mune De­sign’s own self-as­sess­ment spurred the board to low­er the prob­a­bil­i­ty of suc­cess for G100 in fol­lic­u­lar lym­phoma as it re­viewed its prospec­tive in­de­pen­dent fu­ture by the num­bers.

Jan ter Meulen

Cu­ri­ous­ly, the com­pa­ny’s SEC fil­ing on the ne­go­ti­a­tions avoids men­tion­ing which se­nior ex­ec­u­tives at Mer­ck were in­volved in the talks. The phar­ma gi­ant rarely shows its hand and clear­ly want­ed to keep as much of this be­hind closed doors as pos­si­ble.

Paya him­self comes away with a ter­mi­na­tion pack­age of $4,033,298, in­clud­ing $1.4 mil­lion for sev­er­ance. EVP of strat­e­gy and fi­nance Stephen Brady gets a pack­age worth $2.1 mil­lion. CSO Jan ter Meulen gets $1.9 mil­lion and CMO Sergey Yurasov slips in at $1.8 mil­lion.

Those num­bers won’t win any records, but af­ter the year that Im­mune De­sign has had, they’ll take it.

Robert Forrester, Verastem

Ve­rastem CEO For­rester steps to the ex­it as the board hunts com­mer­cial-savvy ex­ec for the be­lea­guered biotech

Robert For­rester is step­ping down as CEO of Ve­rastem On­col­o­gy $VSTM just 8 months af­ter the com­pa­ny nabbed an ap­proval for du­velis­ib, a PI3K drug with a sto­ried past — and what ap­pears as not much of a fu­ture.

The biotech put out word this morn­ing that For­rester will take an ad­vi­so­ry role with Ve­rastem while COO Dan Pa­ter­son steps up to take charge of the lead­er­ship team and the board looks around for a new CEO.

Ken Frazier appears before the Senate Committee on Finance for a hearing on prescription drug pricing on Capitol Hill in Washington, DC, February 26, 2019. Chris Kleponis for CNP via AP Images

Who’s next in line to suc­ceed Ken Fra­zier as CEO of the Keytru­da-blessed Mer­ck?

When Merck waved off a looming forced retirement for Ken Frazier last September, the board cited flexibility in CEO transition as a key factor in the decision. Having Frazier — who’s also chairman of the company — around beyond his 65th birthday in 2019 would ensure they install the best person at the best time, they said.

The board has evidently begun that process with a clear preference for internal candidates, sources told Bloomberg. CFO Robert Davis, chief marketing officer Michael Nally, and chief commercial officer Frank Clyburn are all in the running, according to an insider.

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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UP­DAT­ED: Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.

Neil Woodford. Woodford Investment Management via YouTube

Wood­ford braces po­lit­i­cal storm as UK fi­nan­cial reg­u­la­tors scru­ti­nize fund sus­pen­sion

The shock of Neil Wood­ford’s de­ci­sion to block with­drawals for his flag­ship fund is still rip­pling through the rest of his port­fo­lio — and be­yond. Un­der po­lit­i­cal pres­sure, UK fi­nan­cial reg­u­la­tors are now tak­ing a hard look while in­vestors con­tin­ue to flee.

In a re­sponse let­ter to an MP, the Fi­nan­cial Con­duct Au­thor­i­ty re­vealed that it’s opened an in­ves­ti­ga­tion in­to the sus­pen­sion fol­low­ing months of en­gage­ment with Link Fund So­lu­tions, which tech­ni­cal­ly del­e­gat­ed Wood­ford’s firm to man­age its funds.

Gilead baits new al­liance with $45M up­front, div­ing in­to the busy pro­tein degra­da­tion field

Gilead is jump­ing on board the pro­tein degra­da­tion band­wag­on. And they’re turn­ing to a low-pro­file Third Rock start­up for the ex­per­tise. But if you were look­ing for a trans­for­ma­tion­al deal to kick up fresh en­thu­si­asm for Gilead, you’ll have to re­main pa­tient.

This one will have a long way to go be­fore they get in­to the clin­ic.

The big biotech said Wednes­day morn­ing that it is pay­ing $45 mil­lion up­front and re­serv­ing a whop­ping $2.3 bil­lion in biotech bucks if San Fran­cis­co-based Nurix can point the way to new can­cer ther­a­pies, as well as drugs for oth­er, un­spec­i­fied dis­eases.