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.

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In the context of today’s global economic environment, there is an increasing need to work smarter, faster and leaner across all facets of the life sciences industry.  This is particularly true for small and mid-sized biotech companies, many of which are facing declining valuations and competing for increasingly limited funding to propel their science forward.  It is important to recognize that within this framework, many of these smaller companies already find themselves resource-challenged to design and manage clinical studies themselves because they don’t have large teams or in-house experts in navigating the various aspects of the drug development journey. This can be particularly challenging for the most complex and difficult to treat diseases where no previous pathway exists and patients are urgently awaiting breakthroughs.

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Since losing a controversial court case over orphan drug exclusivity last year, the FDA’s Office of Orphan Products Development has remained entirely silent on orphan exclusivity for any product approved since last November, leaving many sponsors in limbo on what to expect.

That silence means that for more than 70 orphan-designated indications for more than 60 products, OOPD has issued no public determination on the seven-year orphan exclusivity in the Orange Book, and no new listings of orphan exclusivity appear in OOPD’s searchable database, as highlighted recently by George O’Brien, a partner in Mayer Brown’s Washington, DC office.

Albert Bourla, Pfizer CEO (Efren Landaos/Sipa USA/Sipa via AP Images)

Pfiz­er makes an­oth­er bil­lion-dol­lar in­vest­ment in Eu­rope and ex­pands again in Michi­gan

Pfizer is continuing its run of manufacturing site expansions with two new large investments in the US and Europe.

The New York-based pharma giant’s site in Kalamazoo, MI, has seen a lot of attention over the past year. As a major piece of the manufacturing network for Covid-19 vaccines and antivirals, Pfizer is gearing up to place more money into the site. Pfizer announced it will place $750 million into the facility, mainly to establish “modular aseptic processing” (MAP) production and create around 300 jobs at the site.

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Vas Narasimhan, Novartis CEO (Thibault Camus/AP Images, Pool)

No­var­tis bol­sters Plu­vic­to's case in prostate can­cer with PhI­II re­sults

The prognosis is poor for metastatic castration-resistant prostate cancer (mCRPC) patients. Novartis wants to change that by making its recently approved Pluvicto available to patients earlier in their course of treatment.

The Swiss pharma giant unveiled Phase III results Monday suggesting that Pluvicto was able to halt disease progression in certain prostate cancer patients when administered after androgen-receptor pathway inhibitor (ARPI) therapy, but without prior taxane-based chemotherapy. The drug is currently approved for patients after they’ve received both ARPI and chemo.

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Nkarta CEO Paul Hastings at Endpoints' #BIO22 panel (J.T. MacMillan Photography for Endpoints News)

Nkar­ta un­der­scores safe­ty of CAR-NK, boasts ear­ly re­spons­es

The first generation of personalized CAR-T therapies made big waves in the treatment of lymphoma for their stunning efficacy. Nkarta is hoping its off-the-shelf natural killer cell approach will stand out on safety — while keeping some of those impressive numbers on responses.

In a new update from its Phase I dose escalation study, the South San Francisco-based biotech reported that seven out of 10 patients treated with the highest doses of its NK cell therapy, NKX019, achieved a complete response, translating to a complete response rate of 70%.

Pfiz­er-backed Me­di­ar Ther­a­peu­tics ropes in an­oth­er Big Phar­ma in­vestor

A biotech centered on treating fibrosis — born out of Mass General and Brigham and Women’s Hospital — has received a financial boost.

According to an SEC filing, the company has raised $31,761,186 in its latest funding round, which includes 17 investors. The filing lists six names attached to the company, including Meredith Fisher, a partner at Mass General Brigham Ventures and Mediar’s acting CEO.

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In an SEC filing, Verve laid out the FDA’s conditions for lifting the hold on its lead therapy, VERVE-101. That includes submitting preclinical data about potency differences in human versus non-human cells, risks of gene editing germline cells, and off-target analyses in non-hepatocyte cell types.

The FDA also wants clinical data from the ongoing Heart-1 trial, and to modify the trial protocol in the US to add additional contraceptive measures and increase the length of a staggering interval between the dosing of participants.

Illustration: Assistant Editor Kathy Wong for Endpoints News

As mon­ey pours in­to dig­i­tal ther­a­peu­tics, in­sur­ance cov­er­age crawls



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Rick Modi, Affinia Therapeutics CEO

Ver­tex-part­nered gene ther­a­py biotech Affinia scraps IPO plans

Affinia Therapeutics has ditched its plans to go public in a relatively closed-door market that has not favored Nasdaq debuts for the drug development industry most of this year. A pandemic surge in 2020 and 2021 opened the doors for many preclinical startups, which caught Affinia’s attention and gave the gene therapy biotech confidence in the beginning days of 2022 to send in its S-1.

But on Friday, Affinia threw in the S-1 towel and concluded now is not the time to step onto Wall Street. The biotech has put out few public announcements since the spring of this year. Endpoints News picked the startup as one of its 11 biotechs to watch last year.

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