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.”

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus — chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

“To be out of cardiovascular and diabetes is not easy for a company like ours with an incredibly proud history,” Hudson said on a call with reporters, according to the Wall Street Journal. “As tough a choice as that is, we’re making that choice.”

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Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

This is the second biotech buyout pact today, marking a brisk tempo of M&A deals in the lead-up to the big JP Morgan gathering in mid-January. It’s no surprise the acquisitions are both for cancer drugs, where Sanofi will try to make its mark while Merck beefs up a stellar oncology franchise. And bolt-ons are all the rage at the major pharma players, which you could also see in Novartis’ recent $9.7 billion MedCo buyout.

ArQule — which comes out on top after their original lead drug foundered in Phase III — highlighted early data on ‘531 at EHA from a group of 6 chronic lymphocytic leukemia patients who got the 65 mg dose. Four of them experienced a partial response — a big advance for a company that failed with earlier attempts.

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Paul Hudson, Sanofi

Paul Hud­son promis­es a bright new fu­ture at Sanofi, kick­ing loose me-too drugs and fo­cus­ing on land­mark ad­vances. But can he de­liv­er?

Paul Hudson was on a mission Tuesday morning as he stood up to address Sanofi’s new R&D and business strategy.

Still fresh into the job, the new CEO set out to convince his audience — including the legions of nervous staffers inevitably devoting much of their day to listening in — that the pharma giant is shedding the layers of bureaucracy that had held them back from making progress in the past, dropping the duds in the pipeline and reprioritizing a more narrow set of experimental drugs that were promised as first-in-class or best-in-class.  The company, he added, is now positioned to “go after other opportunities” that could offer a transformational approach to treating its core diseases.

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Am­gen puts its foot down in shiny new South San Fran­cis­co hub as it re­or­ga­nizes R&D ops

Amgen has signed up to be AbbVie’s neighbor in South San Francisco as it moves into a nine-story R&D facility in the booming biotech hub.

The arrangement gives Amgen 240,000 square feet of space on the Gateway of Pacific Campus, just a few minutes drive from its current digs at Oyster Point. The new hub will open in 2022 and house the big biotech’s Bay Area employees working on cardiometabolic, inflammation and oncology research.

Ab­b­Vie, Scripps ex­pand part­ner­ship, for­ti­fy fo­cus on can­cer drugs

Scripps and AbbVie go way back. Research conducted in the lab of Scripps scientist Richard Lerner led to the discovery of Humira. The antibody, approved by the FDA in 2002 and sold by AbbVie, went on to become the world’s bestselling treatment. In 2018, the drugmaker and the non-profit organization signed a pact focused on developing cancer treatments — and now, the scope of that partnership has broadened to encompass a range of diseases, including immunological and neurological conditions.

South Ko­rea jails 3 Sam­sung ex­ecs for de­stroy­ing ev­i­dence in Bi­o­Log­ics probe

Three Samsung executives in Korea are going to jail.

The convictions came in what prosecutors had billed as “biggest crime of evidence destruction in the history of South Korea”: a case of alleged corporate intrigue that was thrown open when investigators found what was hidden beneath the floor of a Samsung BioLogics plant. Eight employees in total were found guilty of evidence tampering and the three executives were each sentenced to up to two years in prison.

Nick Plugis, Avak Kahvejian, Cristina Rondinone, Milind Kamkolkar and Chad Nusbaum. (Cellarity)

Cel­lar­i­ty, Flag­ship's $50M bet on net­work bi­ol­o­gy, mar­ries ma­chine learn­ing and sin­gle-cell tech for drug dis­cov­ery

Cellarity started with a simple — but far from easy — idea that Avak Kahvejian and his team were floating around at Flagship Pioneering: to digitally encode a cell.

As he and his senior associate Nick Plugis dug deeper into the concept, they found that most of the models others have developed take a bottom-up approach, where they assemble the molecules inside cells and the connections between them from scratch. What if they opt for a top-down approach, aided by single-cell transcriptomics and machine learning, to gauge the behavior of the entire cellular network?

Left top to right: Mark Timney, Alex Denner, Vas Narasimhan. (The Medicines Company, Getty, AP/Endpoints News)

In a play-by-play of the $9.7B Med­Co buy­out, No­var­tis ad­mits it over­paid while of­fer­ing a huge wind­fall to ex­ecs

A month into his tenure at The Medicines Company, new CEO Mark Timney reached out to then-Novartis pharma chief Paul Hudson: Any interest in a partnership?

No, Hudson told him. Not now, at least.

Ten months later, Hudson had left to run Sanofi and Novartis CEO Vas Narasimhan was paying $9.7 billion for the one-drug biotech – the largest in the string of acquisitions Narasimhan has signed since his 2017 appointment.

The deal was the product of an activist investor and his controversial partner working through nearly a year of cat-and-mouse negotiations to secure a deal with Big Pharma’s most expansionist executive. It represented a huge bet in a cardiovascular field that already saw two major busts in recent years and brought massive returns for two of the industry’s most eye-raising names.

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