Gilead buy Ver­tex? A gold­en oldie in the M&A buzz cir­cuit gets fresh air time

This was the year M&A was sup­posed to make a big splash in bio­phar­ma. But we’ve seen on­ly a few rip­ples on this pond, and we’re at the halfway mark for the year now.

What bet­ter time for Ge­of­frey Porges, now at Leerink, to re­vive an old sug­ges­tion that Gilead $GILD buy Ver­tex $VRTX?

Ge­of­frey Porges, Leerink

Gilead, as we know, has been told by many an­a­lysts that it needs to do some­thing big in M&A more times than prac­ti­cal­ly any oth­er deal-hun­gry com­pa­ny in the in­dus­try, in­clud­ing Sanofi $SNY and Bio­gen $BI­IB. It has the mon­ey. They’re watch­ing the hep C cash cow start to dry up and CEO John Mil­li­gan could pull it off quick, land­ing a mar­ket-lead­ing cys­tic fi­bro­sis port­fo­lio with a fo­cused pipeline.

Ap­pro­pri­ate­ly ti­tling his note “Déjà vu…Why VRTX is still Gilead’s best op­tion,” Porges re­peat­ed some old lessons from 2015 and added that Gilead doesn’t have to try and nav­i­gate the white wa­ter field of on­col­o­gy buy­outs, as it ap­pears in­tent on.

There is an­oth­er way, notes Porges:

Gilead’s stock has been the worst per­former in biotech this year and faces po­ten­tial­ly dev­as­tat­ing rev­enue ero­sion in 2018. We be­lieve an ac­qui­si­tion of Ver­tex (VRTX, OP), which we have ad­vo­cat­ed in the past, would still pro­vide one of the few op­tions for GILD to off­set the risks and in­evitable ero­sion of their lega­cy prod­uct fran­chis­es. Gilead’s man­age­ment faces one of the great­est chal­lenges in re­cent bio­phar­ma­ceu­ti­cal in­dus­try his­to­ry, with the con­cen­tra­tion of their rev­enue in two very large, very prof­itable small mol­e­cule an­tivi­ral fran­chis­es fac­ing in­ten­si­fy­ing com­pet­i­tive threats. Their lack of progress to­ward de­ploy­ing the cash flow from those fran­chis­es has be­come a ma­jor frus­tra­tion to in­vestors, and man­age­ment’s com­ments con­tin­ue to sug­gest that the com­pa­ny’s fo­cus and in­ter­ests are away from Ver­tex, most ob­vi­ous­ly chas­ing the flood of cap­i­tal be­ing de­ployed in­to on­col­o­gy, but we would view an ac­qui­si­tion of a grow­ing and large­ly de-risked rev­enue stream, such as Ver­tex, much more pos­i­tive­ly than a com­pa­ra­ble in­vest­ment, or set of in­vest­ments, in­to the in­tense­ly com­pet­i­tive, and tech­no­log­i­cal­ly un­cer­tain field of on­col­o­gy.

Mil­li­gan has at­tract­ed wide­spread at­ten­tion and plen­ty of nod­ding ap­proval for a com­ment he made re­cent­ly, not­ing that while the buzz is all about tax re­form, big changes to health­care cov­er­age in Wash­ing­ton and so on, a com­pa­ny can on­ly fo­cus on its plan and ex­e­cute, ig­nor­ing the chat­ter.

So far, that at­ti­tude has ex­tend­ed to many an­a­lysts’ re­marks as well.

Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

A lab technician works during research on coronavirus at Johnson & Johnson subsidiary Janssen Pharmaceutical in Beerse, Belgium, Wednesday, June 17, 2020. (Virginia Mayo/AP Images)

UP­DAT­ED: End­points News ranks all 28 play­ers in the Covid-19 vac­cine race. Here's how it stacks up to­day

(This piece was last updated on August 13. Endpoints News will continue to track the latest developments through the FDA’s marketing decisions.)

The 28 players now in or close to the clinical race to get a Covid-19 vaccine over the finish line are angling for a piece of a multibillion-dollar market. And being first — or among the leaders — will play a big role in determining just how big a piece.

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Cal­lid­i­tas bets up to $102M on a biotech buy­out, snag­ging a once-failed PBC drug

After spending years developing its oral formulation of the corticosteroid budesonide, Sweden’s Calliditas now has its sights set on the primary biliary cholangitis field.

The company will buy out France-based Genkyotex, and it’s willing to bet up to €87 million ($102 million) that Genkyotex’s failed Phase II drug, GKT831, will do better in late-stage trials.

Under the current agreement, Calliditas $CALT will initially pay €20.3 million in cash for 62.7% of Genkyotex (or €2.80 a piece for 7,236,515 shares) in early October, then circle back for the rest of Genkyotex’s shares under the same terms. If nothing changes, the whole buyout will cost Calliditas €32.3 million, plus up to  €55 million in contingent rights.

Qi­a­gen in­vestors spurn Ther­mo Fish­er’s takeover of­fer, de­rail­ing a $12B+ deal

Thermo Fisher Scientific had announced an $11.5 billion takeover of Dutch diagnostics company Qiagen back in March, but the deal apparently did not sit well with Qiagen investors.

After getting hammered by critics who contended that Qiagen $QGEN was worth a lot more than what Thermo Fisher wanted to spend, investors turned thumbs down on the offer — derailing the buyout even after Thermo Fisher increased its offer to $12.6 billion in July. Qiagen’s share price has been boosted considerably by Covid-19 as demand for its testing kits surged.

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Inside FDA HQ (File photo)

The FDA just ap­proved the third Duchenne MD drug. And reg­u­la­tors still don’t know if any of them work

Last year Sarepta hit center stage with the FDA’s controversial reversal of its CRL for the company’s second Duchenne muscular dystrophy drug — after the biotech was ambushed by agency insiders ready to reject a second pitch based on the same disease biomarker used for the first approval for eteplirsen, without actual data on the efficacy of the drug.

On Wednesday the FDA approved the third Duchenne MD drug, based on the same biomarker. And regulators were ready to act yet again despite the lack of efficacy data.

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Stéphane Bancel speaks to President Donald Trump at the White House meeting on March 2 (AP Images)

UP­DAT­ED: Mod­er­na of­fers steep dis­count in US sup­ply deal — but still takes the crown with close to $2.5B in vac­cine con­tracts

The US pre-order for Moderna’s Covid-19 vaccine is in.

Operation Warp Speed is reserving $1.525 billion for 100 million doses of Moderna’s Phase III mRNA candidate, rounding out to about $15 per dose — including $300 million in incentive payments for timely delivery. Given that Moderna has a two-dose regimen, it’s good for vaccinating 50 million people. The US government also has the option to purchase another 400 million doses for a total of $6.6 billion, or $16.5 per dose.

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Bayer's Marianne De Backer with Endpoints founder John Carroll, Endpoints@JPM20 (Jeff Rumans for Endpoints News)

UP­DAT­ED: Hunt­ing a block­buster, Bay­er forges an $875M-plus M&A deal to ac­quire women’s health biotech

Bayer has dropped $425 million in cash on its latest women’s health bet, bringing a UK biotech and its non-hormonal menopause treatment into the fold.

KaNDy Therapeutics had its roots in GlaxoSmithKline, which spun out several neuroscience drugs into NeRRe Therapeutics back in 2012. Five years later the team created a new biotech to focus solely on NT-814 — which they considered “one of the few true innovations in women’s health in more than two decades.”

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Xuefeng Yu in Hong Kong, 2019 (Imaginechina via AP Images)

CanSi­no reaps $748M wind­fall from Shang­hai IPO — as it warns Covid-19 vac­cine won't be a huge mon­ey mak­er

CanSino began the year with a clear goal to secure a secondary listing on Shanghai’s STAR market. Then something more urgent came along: As a rising vaccine developer on a mission to bring global standard immunizations to China, it heeded the call to make a vaccine to protect against a virus that would paralyze the whole world.

Xuefeng Yu and his team managed to keep doing both.

More than a month after CanSino’s Covid-19 vaccine candidate is authorized for military use in China, the Hong Kong-listed company has made a roaring debut in Shanghai. It fetched $748 million (RMB$5.2 billion) by floating 24.8 million shares, and soared 88% on its first trading day.

James Wilson, WuXi Global Forum at JPM20

FDA puts up a red light for Pas­sage Bio’s first gene ther­a­py pro­gram, de­lay­ing a pro­gram from James Wilson's group at Penn

Gene therapy pioneer James Wilson spearheaded animal studies demonstrating the potential of new treatments injected directly into the brain, looking to jumpstart a once-and-done fix for an extraordinarily rare disease called GM1 gangliosidosis in infants. His team at the University of Pennsylvania published their work on monkeys and handed it over to Passage Bio, a Wilson-inspired startup building a pipeline of gene therapies — with an IND for PBGM01 to lead the way.

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