Pfiz­er bags Medi­va­tion buy­out with blowout $14B cash of­fer

David Hung, Medi­va­tion CEO

Pfiz­er $PFE has struck a deal to buy Medi­va­tion $MD­VN at a price CEO David Hung has been look­ing for. The two com­pa­nies an­nounced Mon­day morn­ing that the phar­ma gi­ant will pay $81.50 a share — about $14 bil­lion — for Medi­va­tion, all of it in cold, hard cash. That’s far more than the $9.3 bil­lion of­fer Sanofi used to get the auc­tion start­ed.

Medi­va­tion closed Fri­day with a mar­ket cap of $11.1 bil­lion, giv­ing the com­pa­ny a big pre­mi­um to boast about to share­hold­ers. Sanofi $SNY last bid $58 a share in cash and an ex­tra $3 CVR for Medi­va­tion, which has con­sis­tent­ly re­ject­ed the phar­ma com­pa­ny’s of­fers as gross­ly in­ad­e­quate. A swirl of ru­mors has al­so put Mer­ck $MRK, Cel­gene $CELG, Gilead $GILD and oth­ers at the bar­gain­ing ta­ble as well.

Pfiz­er will now beef up its on­col­o­gy port­fo­lio with Medi­va­tion’s share of Xtan­di, part­nered with Astel­las. An­a­lysts have pro­ject­ed that the block­buster sales per­for­mance of Xtan­di—which goes head-to-head against Zyti­ga—will shoot up to close to $5 bil­lion by 2020.

The buy­out al­so adds an ex­per­i­men­tal late-stage PARP in­hibitor called ta­la­zoparib to Pfiz­er’s pipeline. Tak­ing a frag­ment of da­ta, Hung re­cent­ly claimed that ta­la­zoparib was clear­ly the best of all the con­tenders in the pipeline, far sur­pass­ing Tesaro’s ni­ra­parib, Clo­vis’s ru­ca­parib, As­traZeneca’s Lyn­parza (ola­parib) and Ab­b­Vie’s veli­parib. Tesaro, though, has field­ed strong re­sults from its study, help­ing beef up peak sales pro­jec­tions for the class.

Medi­va­tion bought their drug last year from Bio­Marin for $410 mil­lion cash, adding $160 mil­lion on the back end of the deal. And it’s proven to be the wild card in this high-stakes game of biotech M&A.

Pfiz­er’s pre­mi­um sur­prised some bat­tle hard­ened vet­er­ans on Wall Street.

“We have a very dif­fi­cult time get­ting to the ~$80/share price that Pfiz­er (PFE Not Cov­ered) is re­port­ed to be pay­ing based on rea­son­able mod­el­ing as­sump­tions for the com­pa­ny,” not­ed RBC’s Simos Sime­oni­dis just ahead of the of­fi­cial con­fir­ma­tion. “We re­mind in­vestors that Xtan­di is shared with Astel­las. Al­so, me­dia re­ports point to an all-cash trans­ac­tion, which is both sur­pris­ing, giv­en the risk in­volved in sec­ond as­set ta­la­zoparib and a cred­it to MD­VN’s man­age­ment, which may man­age to sell this as­set, with­out any or much of a CVR (if that in­deed ends up be­ing the case), with ta­la­zoparib Phase III da­ta around the cor­ner.”

Ian Read, Pfiz­er CEO

“The pro­posed ac­qui­si­tion of Medi­va­tion is ex­pect­ed to im­me­di­ate­ly ac­cel­er­ate rev­enue growth and dri­ve over­all earn­ings growth po­ten­tial for Pfiz­er,” said Pfiz­er CEO Ian Read. “The ad­di­tion of Medi­va­tion will strength­en Pfiz­er’s In­no­v­a­tive Health busi­ness and ac­cel­er­ate its path­way to a lead­er­ship po­si­tion in on­col­o­gy, one of our key fo­cus ar­eas, which we be­lieve will dri­ve greater growth and scale of that busi­ness over the long-term. This trans­ac­tion is an­oth­er ex­am­ple of how we are ef­fec­tive­ly de­ploy­ing our cap­i­tal to gen­er­ate at­trac­tive re­turns and cre­ate share­hold­er val­ue.”

The biggest suc­cess Pfiz­er had ex­pe­ri­enced re­cent­ly has been the ac­cel­er­at­ed ap­proval for Ibrance (pal­bo­ci­clib), a pi­o­neer­ing CDK 4/6 drug that now faces sev­er­al late-stage ri­vals. Pfiz­er paid Mer­ck KGaA $850 mil­lion to part­ner on their PD-L1 check­point drug, and this new deal clear­ly un­der­scores its cen­tral fo­cus on the can­cer are­na.

Pfiz­er has plen­ty of cash avail­able for the buy­out. It made un­suc­cess­ful megabids for As­traZeneca and Al­ler­gan. And Pfiz­er CEO Ian Read has clear­ly been will­ing to dig deep to build the com­pa­ny through ac­qui­si­tions.

Iron­i­cal­ly, Pfiz­er out­li­censed its PARP, PF-01367338, now known as ru­ca­parib, to Clo­vis back in 2011, when it was re­struc­tur­ing its pipeline and slash­ing its R&D bud­get. Now it finds it­self buy­ing a ri­val for a block­buster sum. Pfiz­er gained an eq­ui­ty stake in Clo­vis along with $255 mil­lion in mile­stones in the deal, an amount that is like­ly far ex­ceed­ed by what it’s will­ing to pay Medi­va­tion stock­hold­ers for ta­la­zoparib. In ad­di­tion, Pfiz­er in­di­rect­ly helped fund Xtan­di’s de­vel­op­ment, pay­ing $225 mil­lion to Medi­va­tion to part­ner on dime­bon, which flopped for Alzheimer’s.

The Pfiz­er deal marks an em­bar­rass­ing de­noue­ment for new Sanofi CEO Olivi­er Brandi­court, who had sought to make his mark on the com­pa­ny with a bar­gain deal. Sanofi, and oth­ers in the hunt, will now have to turn their at­ten­tion to oth­er tar­gets of op­por­tu­ni­ty. And they aren’t like­ly to start on the low end.

A deal like this could sig­nal a will­ing­ness by Big Phar­ma to pay top dol­lar for mar­ket­ed and late-stage prod­ucts with re­al po­ten­tial. Over­all, M&A has been drag­ging this year in bio­phar­ma. A few more ac­qui­si­tions like this would bring the num­bers up con­sid­er­ably. Bio­gen, Gilead and oth­ers have in­di­cat­ed a will­ing­ness to snap up new deals to beef up their pipelines as an­a­lysts clam­or for more projects to get ex­cit­ed about.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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