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.”

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

Fresh off Fer­Gene's melt­down, David Meek takes over at Mi­rati with lead KRAS drug rac­ing to an ap­proval

In the insular world of biotech, a spectacular failure can sometimes stay on any executive’s record for a long time. But for David Meek, the man at the helm of FerGene’s recent implosion, two questionable exits made way for what could be an excellent rebound.

Meek, most recently FerGene’s CEO and a past head at Ipsen, has become CEO at Mirati Therapeutics, taking the reins from founding CEO Charles Baum, who will step over into the role of president and head of R&D, according to a release.

Dave Lennon, former president of Novartis Gene Therapies

Zol­gens­ma patent spat brews be­tween No­var­tis and Re­genxbio as top No­var­tis gene ther­a­py ex­ec de­parts

Regenxbio, a small licensor of gene therapy viral vectors spun out from the University of Pennsylvania, is now finding itself in the middle of some major league patent fights.

In addition to a patent suit with Sarepta Therapeutics from last September, Novartis, is now trying to push its smaller partner out of the way. The Swiss biopharma licensed Regenxbio’s AAV9 vector for its $2.1 million spinal muscular atrophy therapy Zolgensma.

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Volker Wagner (L) and Jeff Legos

As Bay­er, No­var­tis stack up their ra­dio­phar­ma­ceu­ti­cal da­ta at #ES­MO21, a key de­bate takes shape

Ten years ago, a small Norwegian biotech by the name of Algeta showed up at ESMO — then the European Multidisciplinary Cancer Conference 2011 — and declared that its Bayer-partnered targeted radionuclide therapy, radium-223 chloride, boosted the overall survival of castration-resistant prostate cancer patients with symptomatic bone metastases.

In a Phase III study dubbed ALSYMPCA, patients who were treated with radium-223 chloride lived a median of 14 months compared to 11.2 months. The FDA would stamp an approval on it based on those data two years later, after Bayer snapped up Algeta and christened the drug Xofigo.

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Ex­elix­is pulls a sur­prise win in thy­roid can­cer just days ahead of fi­nal Cabome­tyx read­out

Exelixis added a thyroid cancer indication to its super-seller Cabometyx’s label on Friday — months before the FDA was expected to make a decision, and days before the company was set to unveil the final data at #ESMO21.

At a median follow-up of 10.1 months, differentiated thyroid cancer patients treated with Cabometyx (cabozantinib) lived a median of 11 months without their disease worsening, compared to just 1.9 months for patients given a placebo, Exelixis said on Monday.

Den­mark's Gubra to col­lab­o­rate with Bay­er on pep­tides; Sam­sung and Bio­gen re­ceive FDA ap­proval for Lu­cen­tis biosim­i­lar

Danish biotech Gubra announced a research collaboration and license agreement with Bayer to develop peptide therapeutics to treat cardiorenal diseases. The collaboration will utilize Gubra’s peptide drug discovery platform to identify potential candidates.

This is not the first time Gubra has partnered with a company on peptide therapeutics — they partnered with Boehringer Ingelheim back in 2017 to create peptide therapeutics to treat obesity.

Rafaèle Tordjman (Jeito Capital)

Con­ti­nu­ity and di­ver­si­ty: Rafaèle Tord­j­man's women-led VC firm tops out first fund at $630M

For a first-time fund, Jeito Capital talks a lot about continuity.

Rafaèle Tordjman had spotlighted that concept ever since she started building the firm in 2018, promising to go the extra mile(s) with biotech entrepreneurs while pushing them to reach patients faster.

Coincidentally, the lack of continuity was one of the sore spots listed in a report about the European healthcare sector published that same year by the European Investment Bank — whose fund is one of the LPs, alongside the American pension fund Teacher Retirement System of Texas and Singapore’s Temasek, to help Jeito close its first fund at $630 million (€534 million). As previously reported, Sanofi had chimed in €50 million, marking its first investment in a French life sciences fund.

Mi­rati tri­umphs again in KRAS-mu­tat­ed lung can­cer with a close­ly watched FDA fil­ing now in the cards

After a busy weekend at #ESMO21, which included a big readout for its KRAS drug adagrasib in colon cancer, Mirati Therapeutics is ready to keep the pressure on competitor Amgen with lung cancer data that will undergird an upcoming filing.

In topline results from a Phase II cohort of its KRYSTAL-1 study, adagrasib posted a response rate of 43% in second-line-or-later patients with metastatic non-small cell lung cancer containing a KRAS-G12C mutation, Mirati said Monday.

Ex-My­lan em­ploy­ee pleads guilty to in­sid­er trad­ing, il­le­gal­ly deal­ing on FDA ap­provals, earn­ings and Up­john merg­er

A former Mylan IT executive pleaded guilty Friday to an insider trading scheme where he bought and sold stock options on another executive’s advice.

Prosecutors secured the plea from Dayakar Mallu, Mylan’s former VP of global operations information technology, after uncovering the plan. Mallu collaborated with an unnamed “senior manager,” the SEC said, to trade options ahead of Mylan public announcements regarding FDA approvals, revenue reports and its merger with the Pfizer generics subsidiary Upjohn. The two subsequently shared profits.

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