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.

Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; and more

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As you start planning for #JPM23, we hope you will consider joining Endpoints News for our live and virtual events. For those who are celebrating Thanksgiving, we hope you are enjoying the long weekend with loved ones. And if you’re not — we’ll see you next week!

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Rob Davis, Merck CEO

Up­dat­ed: No Seagen here: 'Do more' means a small $1.35B pur­chase of Ima­go for Mer­ck

Merck is making an acquisition, the Big Pharma announced before Monday’s opening bell. No, Seagen is not entering the fold, as had been speculated for quarters.

Folding under Merck’s wings will be Pfizer-backed Imago BioSciences. For nearly a year, Merck CEO Rob Davis has been saying the pharma giant needs to “do more” on the business development front after its 2021 $11.5 billion acquisition of Acceleron.

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Paul Perreault, CSL Behring CEO

CSL lands FDA ap­proval for he­mo­phil­ia B gene ther­a­py, sets $3.5M list price

The FDA has approved the world’s first gene therapy for hemophilia B, ushering into the market a treatment that’s historic in both what it promises to do and how much it will cost.

CSL will be marketing the drug, Hemgenix, at a list price of $3.5 million — which sets a new record for the most expensive single-use gene therapy in the US.

In a statement provided to Endpoints News, the Australian company noted that the current costs of treating people with moderate to severe hemophilia B can be significant over a lifetime. By some estimates, healthcare systems could spend more than $20 million per person.

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Elon Musk (GDA via AP Images)

Biggest drug com­pa­nies halt­ed Twit­ter ad buys af­ter Lil­ly in­sulin spoof

Almost all of the drug industry’s biggest advertisers cut their spending on Twitter to zero or near-zero over the last two weeks amid worries about impersonation of their brands by pranksters and the future of the social media company.

Among 18 of the biggest pharmaceutical advertisers in the US market, 12 cut their Twitter ad spending to nothing for the week beginning Nov. 14, according to Pathmatics, which tracks data on prescription drug ad spending as well as general corporate advertising. The list of drugmakers cutting spending to zero includes Merck, AstraZeneca, Eli Lilly, Novartis, Pfizer and others.

Peter Hecht, Cyclerion CEO

Cy­cle­ri­on board quick­ly nix­es CEO Pe­ter Hecht's un­ortho­dox pitch for low cash re­serves

It’s been less than two months since Cyclerion laid out a new R&D strategy around its lead drug in mitochondrial diseases, one that triggered the company to lay off close to half of its employees and explore licensing deals for the rest of the pipeline. But CEO Peter Hecht apparently has other plans in mind.

Hecht, who led Ironwood for close to 20 years before spinning out Cyclerion, disclosed in an SEC filing Monday that a “newly-formed private company” that he “may have or may acquire an interest” submitted a proposal to Cyclerion the day prior to purchase Cyclerion’s CNS assets, including CY6463 and CY3018 — the top two programs listed in the pipeline.

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Alzheimer’s drug bites the dust; Re­struc­ture, re­struc­ture, re­struc­ture; Land­mark di­a­betes OK; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Being in the news business can give one a warped sense of time — it feels like quite a while since we published some of these stories below. But next Saturday’s Endpoints Weekly will definitely be shorter, as we take off Thursday and Friday for Thanksgiving. We will still have the abbreviated edition in your inbox at the usual time.

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Image: Shutterstock

MIT re­searchers re­veal DNA "Paste" tech be­hind lat­est gene edit­ing start­up

MIT scientists have developed a tool that they say can insert large gene sequences where they want in the genome.

In a paper published Thursday in Nature Biotechnology, MIT fellows Omar Abudayyeh, Jonathan Gootenberg and colleagues detail a technology they call PASTE, which they say can potentially be used to insert long strands of DNA and treat genetic diseases caused by many different mutations, such as cystic fibrosis and Leber congenital amaurosis, a rare eye disorder that causes blindness.

J&J's Spra­va­to pulls a PhI­II win against Sero­quel XR in treat­ment-re­sis­tant de­pres­sion

A day before Thanksgiving, J&J’s Janssen has a new cut of Phase III Spravato data to be grateful for.

The pharma giant announced on Wednesday that its nasal spray, also known as esketamine, beat extended-release quetiapine, previously sold by AstraZeneca as Seroquel XR, in treatment-resistant depression (TRD). Of 676 adults, a significantly higher number of patients on Spravato were able to achieve remission and avoid relapse after 32 weeks, according to J&J.

Richard Francis, new Teva CEO (Novartis via Facebook)

Up­dat­ed: Te­va picks for­mer San­doz head as new CEO to re­place Kåre Schultz

Teva has tapped the former CEO of Sandoz, Richard Francis, to lead the Israeli generics giant, replacing current CEO Kåre Schultz.

Francis led Sandoz, the generics division of Novartis, for five years from 2014 to 2019, leaving as Novartis began making plans to spin out the unit. It’s been a challenging several years for generics companies, which have seen supply chains disrupted, pressure on how much they can charge for drugs, and stock prices in decline.