Div­ing deep in­to CAR-T, Gilead forges $12B buy­out deal for Kite Phar­ma

Gilead has forged the big, trans­for­ma­tion­al buy­out deal that every­one in the in­dus­try has been wait­ing for.

Gilead $GILD has agreed to buy CAR-T pi­o­neer Kite Phar­ma $KITE — which is like­ly just months away from its first ap­proval — for $11.9 bil­lion in cash.

The buy­out will in­stant­ly make Gilead a leader in adop­tive cell ther­a­py, go­ing head-to-head against No­var­tis’ lead­ing ef­fort with CTL019. And in a call with an­a­lysts ear­ly Mon­day, Gilead ex­ecs un­der­scored that while cell ther­a­pies would be­come the cor­ner­stone of their work in on­col­o­gy, the busi­ness de­vel­op­ment team is pur­su­ing more pacts to build that seg­ment of the pipeline.

Gilead agreed to forge the deal at a price of $180 a share, a rel­a­tive­ly mod­est 29% pre­mi­um of the com­pa­ny’s al­ready swollen share price. Just three years ago, though, Kite went pub­lic with an IPO that ini­tial­ly priced at $17 a share. The buy­out price rep­re­sents a 960% in­crease on that.

The biggest sin­gle ben­e­fi­cia­ry of the buy­out will be Kite CEO Arie Bellde­grun, whose 5.9% stake in Kite — list­ed in the lat­est avail­able proxy state­ment — is to­day worth $597,706,380.

Arie Bellde­grun

Kite’s lead­ing drug is axi-cel, which comes with a peak sales es­ti­mate hov­er­ing close to $2 bil­lion a year. But the com­pa­ny has al­so been ac­tive­ly work­ing on a slate of next-gen can­cer ther­a­pies that promise to move be­yond the ini­tial re-en­gi­neer­ing work with chimeric anti­gen re­cep­tors in an ef­fort to move be­yond blood can­cers and in­to sol­id tu­mors.

For Gilead, it’s a chance to forge a new busi­ness that can be re­li­ably lined up next to its foun­da­tion­al work in HIV, where it con­tin­ues to be an in­dus­try leader. Gilead paid $11 bil­lion for Phar­mas­set to break in­to the hep C mar­ket. The com­pa­ny ac­com­plished that task with fly­ing col­ors, but af­ter watch­ing sales swell in­to megablock­buster ter­ri­to­ry, rev­enue has peaked and is ex­pect­ed to slide in com­ing years.

That com­bi­na­tion of fi­nan­cial fire­pow­er — Gilead can eas­i­ly fund this deal re­ly­ing on its cash re­serves — and a need to build the busi­ness put Gilead in a per­fect spot to ac­quire Kite just as the biotech neared a ma­jor cross­road.

For Kite CEO Bellde­grun, the buy­out marks the end of a ma­jor dri­ve to cre­ate a com­pa­ny that could de­vel­op and mar­ket a per­son­al­ized cell ther­a­py. Kite has worked close­ly with the NCI’s Steven Rosen­berg, the sci­en­tist who helped pi­o­neer CAR-T ther­a­pies.

This ac­qui­si­tion al­so has some im­pli­ca­tions for the in­dus­try. M&A has been lack­ing so far in 2017, with big play­ers like Pfiz­er hold­ing back in an­tic­i­pa­tion of tax re­form leg­is­la­tion that would al­low them to move bil­lions from over­seas ac­counts. Gilead CEO Mil­li­gan, though, has con­sis­tent­ly main­tained that to run a bio­phar­ma com­pa­ny prop­er­ly, you need to ig­nore what’s go­ing on in Wash­ing­ton and make de­ci­sions. He may in­spire oth­ers to fol­low suit, oil­ing the tracks on more deals.

John Mil­li­gan, Gilead CEO

“The ac­qui­si­tion of Kite es­tab­lish­es Gilead as a leader in cel­lu­lar ther­a­py and pro­vides a foun­da­tion from which to dri­ve con­tin­ued in­no­va­tion for peo­ple with ad­vanced can­cers,” said John Mil­li­gan, Gilead’s pres­i­dent and CEO. “The field of cell ther­a­py has ad­vanced very quick­ly, to the point where the sci­ence and tech­nol­o­gy have opened a clear path to­ward a po­ten­tial cure for pa­tients. We are great­ly im­pressed with the Kite team and what they have ac­com­plished, and share their be­lief that cell ther­a­py will be the cor­ner­stone of treat­ing can­cer. Our sim­i­lar cul­tures and his­to­ries of dri­ving rapid in­no­va­tion in or­der to bring more ef­fec­tive and safer prod­ucts to as many pa­tients as pos­si­ble make this an ex­cel­lent strate­gic fit.”

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.

Busy Gilead crew throws strug­gling biotech a life­line, with some cash up­front and hun­dreds of mil­lions in biobucks for HIV deal

Durect $DRRX got a badly needed shot in the arm Monday morning as Gilead’s busy BD team lined up access to its extended-release platform tech for HIV and hepatitis B.

Gilead, a leader in the HIV sector, is paying a modest $25 million in cash for the right to jump on the platform at Durect, which has been using its technology to come up with an extended-release version of bupivacaine. The FDA rejected that in 2014, but Durect has been working on a comeback.

In­tec blitzed by PhI­II flop as lead pro­gram fails to beat Mer­ck­'s stan­dard com­bo for Parkin­son’s

Intec Pharma’s $NTEC lead drug slammed into a brick wall Monday morning. The small-cap Israeli biotech reported that its lead program — coming off a platform designed to produce a safer, more effective oral drug for Parkinson’s — failed the Phase III at the primary endpoint.

Researchers at Intec, which has already seen its share price collapse over the past few months, says that its Accordion Pill-Carbidopa/Levodopa failed to prove superior to Sinemet in reducing daily ‘off’ time. 

Cel­gene racks up third Ote­zla ap­proval, heat­ing up talks about who Bris­tol-My­ers will sell to

Whoever is taking Otezla off Bristol-Myers Squibb’s hands will have one more revenue stream to boast.

The drug — a rising star in Celgene’s pipeline that generated global sales of $1.6 billion last year — is now OK’d to treat oral ulcers associated with Behçet’s disease, a common symptom for a rare inflammatory disorder. This marks the third FDA approval for the PDE4 inhibitor since 2014, when it was greenlighted for plaque psoriasis and psoriatic arthritis.

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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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Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors.

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Apotex, though, has been a disaster ground. The manufacturer voluntarily yanked the ANDAs on 31 drugs — in late 2017 — after the FDA came across serious manufacturing deficiencies at their plants in India. A few days ago, the FDA made it official.

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