FTC calls out Il­lu­mi­na as 'mo­nop­o­list,' moves to block $1.2B ac­qui­si­tion of PacBio

When se­quenc­ing gi­ant Il­lu­mi­na re­vealed that it’s ac­quir­ing small­er ri­val Pa­cif­ic Bio­sciences for $1.2 bil­lion last year, CEO Fran­cis deS­ouza said the com­bi­na­tion of their own short-read tech­nol­o­gy and the small­er ri­val’s long-read ap­proach “will give con­sumers a more per­fect view of the genome.”

Per­haps too per­fect, the Fed­er­al Trade Com­mis­sion sug­gests, for a sin­gle com­pa­ny to hawk.

The FTC’s five com­mis­sion­ers vot­ed unan­i­mous­ly to chal­lenge Il­lu­mi­na’s pro­posed takeover, set­ting an ad­min­is­tra­tive tri­al for Au­gust 18, 2020, while mov­ing to seek a tem­po­rary re­strain­ing or­der and pre­lim­i­nary in­junc­tion in fed­er­al court.

“When a mo­nop­o­list buys a po­ten­tial ri­val, it can harm com­pe­ti­tion,” Gail Levine, FTC Bu­reau of Com­pe­ti­tion deputy di­rec­tor, said in a state­ment. “These deals help mo­nop­o­lists main­tain pow­er. That’s why we’re chal­leng­ing this ac­qui­si­tion.”

The chal­lenge comes just a day af­ter the FTC cleared Roche’s $4.3 bil­lion buy­out of gene ther­a­py play­er Spark, af­ter tak­ing sev­er­al months to con­clude that their union won’t hurt com­pe­ti­tion in treat­ing he­mo­phil­ia A. The 10-month de­lay for a deal that was gen­er­al­ly per­ceived as sim­ple and straight­for­ward struck bio­phar­ma play­ers and in­vestors as a wor­ry­ing sign of the com­mis­sion’s tight­en­ing stan­dards — con­cerns that built on pre­vi­ous re­marks by De­mo­c­ra­t­ic ap­pointees and in­ten­si­fy­ing po­lit­i­cal rhetoric.

Fran­cis deS­ouza

That wor­ry may be rip­pling out to the se­quenc­ing in­dus­try. Il­lu­mi­na shares $ILMN are down 1.31% to $323.45 while PacBio is trad­ing at $5 pre­mar­ket, down 35% from the high im­me­di­ate­ly fol­low­ing the buy­out an­nounce­ment.

“We strong­ly dis­agree with the FTC’s de­ci­sion and will con­tin­ue to work through the reg­u­la­to­ry ap­proval process as we con­sid­er next steps,” Il­lu­mi­na spokesman Er­ic En­di­cott said in a state­ment pro­vid­ed to End­points News. “We be­lieve that the ac­qui­si­tion will ben­e­fit the in­dus­try and cus­tomers, and the facts of our pro­posed trans­ac­tion sup­port this.”

Il­lu­mi­na orig­i­nal­ly ex­pect­ed to close its ac­qui­si­tion of PacBio in mid-2019. But the UK’s Com­pe­ti­tion and Mar­kets Au­thor­i­ty launched an in­ves­ti­ga­tion in April and pro­ceed­ed to Phase 2 re­view in June.

Then in Oc­to­ber, the CMA — which gave its bless­ing to the Roche/Spark deal hours be­fore the FTC — de­cid­ed the deal in­deed rais­es an­ti­com­pet­i­tive con­cerns.

Here’s the case the US an­titrust watch­dog laid out in its com­plaint, which is rough­ly sim­i­lar to its UK coun­ter­part’s:

PacBio is one of three oth­er com­pa­nies that man­u­fac­ture and sell next-gen­er­a­tion se­quenc­ing sys­tems to ri­val Il­lu­mi­na in the US; Its tech, which al­lows cus­tomers to read much longer pieces of DNA at a time, has im­proved and ap­pears to be snatch­ing cus­tomers from Il­lu­mi­na; and the ac­qui­si­tion would re­duce the com­bined firm’s in­cen­tive to de­vel­op new prod­ucts.

Fur­ther­more, the CMA found that oth­er com­pet­ing tech­nolo­gies posed lim­it­ed chal­lenges in com­par­i­son — a claim that BGI, Ox­ford Nanopore and Ther­mo Fish­er may well dis­pute.

In an at­tempt to per­suade the CMA to give the green light, Il­lu­mi­na had of­fered to open se­quenc­ing-re­lat­ed IP to com­peti­tors. But with the FTC’s strong­ly word­ed let­ter, “there ap­pears to be lim­it­ed chance that the deal would go through,” SVB Leerink an­a­lyst Puneet Sou­da wrote.

The fall­out here would, in fact, mean a loss of in­no­va­tion, he ar­gued.

“Though the ma­jor­i­ty of the se­quenc­ing mar­ket cen­ters around the short-read tech­nol­o­gy from ILMN – which is both fast and eco­nom­i­cal, the long-read tech­nol­o­gy caters to more ac­cu­ra­cy, re­frac­to­ry/re­peat ge­nom­ic re­gions, and struc­tur­al ge­nomics ap­pli­ca­tions – at a slow­er speed and high­er price tag,” he wrote. “ILMN could re­duce the cost of long read over time, open­ing up new mar­kets and ap­pli­ca­tions for PACB’s tech­nol­o­gy.”

Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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Por­tion of Neil Wood­ford’s re­main­ing in­vest­ments, in­clud­ing Nanopore, sold off for $284 mil­lion

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.