Get­ting to work on pipeline con­struc­tion, new Ipsen CEO forges $1B deal to buy Mer­ri­mack’s strug­gling Onivyde

Ipsen CEO David Meek

Mer­ri­mack Phar­ma­ceu­ti­cals and Ipsen, two biotechs look­ing to re­or­ga­nize and move up in the world, have struck a bil­lion-dol­lar deal for a floun­der­ing can­cer ther­a­py. The Paris-based Ipsen is hand­ing over $575 mil­lion in cash and promis­ing up to $450 mil­lion in mile­stones to grab Mer­ri­mack’s US rights to Onivyde, ap­proved for pan­cre­at­ic can­cer. And new Ipsen CEO David Meek tells End­points that you can ex­pect more deals to come.

Ipsen gets Mer­ri­mack’s $MACK on­ly mar­ket­ed drug just a few months af­ter the Boston-based biotech oust­ed its CEO fol­low­ing its lack­lus­ter de­but, which pro­vid­ed on­ly mar­gin­al im­prove­ments on sur­vival rates for ad­vanced pan­cre­at­ic can­cer pa­tients. The French biotech al­so adds Mer­ri­mack’s com­mer­cial ops in the US as well as man­u­fac­tur­ing. And it lines up the fast-grow­ing Shire as a part­ner, which has been han­dling ex-US mar­ket­ing on the drug.

Onivyde earned on­ly $14.5 mil­lion in the third quar­ter, net, leav­ing an­a­lysts un­hap­py with Mer­ri­mack’s progress and prospects. But Ipsen’s Meek, who took over sev­en months ago — af­ter Shire ac­quired Bax­al­ta, where he had been pres­i­dent of on­col­o­gy — sees this deal as a great chance to add to its pres­ence in Cam­bridge, MA as well as the US mar­ket, feed­ing in­to their work to mar­ket So­mat­u­line. And there’s po­ten­tial up­side in sev­er­al on­go­ing stud­ies aimed at ex­pand­ing its use.

“For us the sweet spot is gain­ing a mar­ket­ed prod­uct in on­col­o­gy,” Meek tells me. It’s a “great deal” just for the cur­rent in­di­ca­tion in pan­cre­at­ic can­cer, he adds, where Onivyde is the on­ly ap­proved drug in a post-gem­c­itabine set­ting.

Sources close to the deal tell me that the deal gives Mer­ri­mack the mon­ey it needs to com­plete its re­struc­tur­ing and re­fo­cus for a three-year stretch, with plans for a $1.54 div­i­dend, pay­ing off $175 mil­lion in notes and rein­vest­ing in its three top re­main­ing clin­i­cal stage ef­forts for MM-121, MM-141 and MM-310. MM-302, which failed a re­cent study, is be­ing shelved.

The deal is worth $5 a share, says the source, for stock that closed Fri­day at $3.60, which gave Mer­ri­mack a mar­ket cap of $466 mil­lion — sig­nif­i­cant­ly less than the up­front in the deal. And the cash funds op­er­a­tions go­ing for­ward in­to H2 2019, giv­ing the com­pa­ny time to pro­vide sol­id da­ta on the three key drugs in the pipeline.

“There had to be a process to nar­row the best path for­ward,” says the source.  “Ob­vi­ous­ly the drug hasn’t per­formed as well as hoped,” but this drug pro­vides “max­i­mum val­ue” for the next stage of de­vel­op­ment as it goes back to be­ing an R&D-stage biotech.

In a re­lease out Sun­day evening, Mer­ri­mack not­ed: “The mile­stones are com­posed of: $225 mil­lion for U.S. Food and Drug Ad­min­is­tra­tion (“FDA”) ap­proval in first-line pan­cre­at­ic can­cer, $150 mil­lion for FDA ap­proval in small cell lung can­cer and $75 mil­lion for FDA ap­proval in any third in­di­ca­tion.” All of that mon­ey will be re­turned to share­hold­ers.

What­ev­er the mo­ti­va­tion to sell, Meek is hap­py to be on the buy­ing end. There’s a Phase II study planned for Onivyde on first-line pan­cre­at­ic can­cer use, which can run straight in­to Phase III. An­oth­er mid-stage ef­fort is un­der­way for small cell lung can­cer and an ear­ly stage study for breast can­cer.

“The up­side,” Meek says, “is pure up­side.”

Meek says that he’s just get­ting start­ed. He’s plan­ning on adding more drug deals to beef up a pipeline in on­col­o­gy, neu­ro­science and rare dis­eases.

“We’re try­ing to glob­al­ize our busi­ness,” says the CEO. “We want an even big­ger pres­ence in the US than where we are to­day.”

For starters, the deal will in­volve adding about 100 Mer­ri­mack staffers to Ipsen’s pay­roll, which cur­rent­ly ac­counts for about 4,500 em­ploy­ees glob­al­ly. And Meek says the pact will add to the 100 staffers on site in Cam­bridge, MA, one of three R&D sites the com­pa­ny has, in­clud­ing op­er­a­tions in Lon­don/Ox­ford and Paris.

The FDA ap­proved Onivyde back in the fall of 2015 as a sec­ond-line treat­ment. Pa­tients treat­ed with Onivyde plus flu­o­rouracil/leu­cov­orin lived an av­er­age of 6.1 months, com­pared to 4.2 months for those treat­ed with on­ly flu­o­rouracil/leu­cov­orin. There was no sur­vival im­prove­ment for those who re­ceived on­ly Onivyde com­pared to those who re­ceived flu­o­rouracil/leu­cov­orin.

Ipsen is part­nered with Ex­elix­is on cabozan­ti­nib, han­dling the ex-US sales of the drug.

For Mer­ri­mack, the sale comes just weeks af­ter its lead ex­per­i­men­tal drug, MM-302, failed for breast can­cer in a clin­i­cal study. Mer­ri­mack cut 22% of its work force in Oc­to­ber as Robert Mul­roy, who cham­pi­oned Onivyde and tout­ed its fu­ture, stepped out of the com­pa­ny. With this lat­est re­or­ga­ni­za­tion, Mer­ri­mack will be left with 80 staffers, down about 320 from the pay­roll it sup­port­ed in Oc­to­ber 2016.

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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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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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.