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.”

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.

The End­points 11: They've got mad mon­ey and huge am­bi­tions. It's time to go big or go home

These days, selecting a group of private biotechs for the Endpoints 11 spotlight begins with a sprint to get ahead of IPOs and the M&A teams at Big Pharma. I’ve had a couple of faceplants earlier this year, watching some of the biotechs on my short list choose a quick leap onto Nasdaq or into the arms of a buyer.

Vividion, you would have been a great pick for the Endpoints 11. I’m sorry I missed you.

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Dave Lennon, former president of Novartis Gene Therapies

So what hap­pened with No­var­tis Gene Ther­a­pies? Here's your an­swer

Over the last couple of days it’s become clear that the gene therapy division at Novartis has quietly undergone a major reorganization. We learned on Monday that Dave Lennon, who had pursued a high-profile role as president of the unit with 1,500 people, had left the pharma giant to take over as CEO of a startup.

Like a lot of the majors, Novartis is an open highway for head hunters, or anyone looking to staff a startup. So that was news but not completely unexpected.

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Who are the women su­per­charg­ing bio­phar­ma R&D? Nom­i­nate them for this year's spe­cial re­port

The biotech industry has faced repeated calls to diversify its workforce — and in the last year, those calls got a lot louder. Though women account for just under half of all biotech employees around the world, they occupy very few places in C-suites, and even fewer make it to the helm.

Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

FDA au­tho­rizes Pfiz­er's vac­cine boost­er for se­niors, those at high risk for se­vere Covid-19

The Biden administration’s goal of kicking off its booster shot drive for the entire US population this week is not quite going as planned.

First, Pfizer applied for approval of a supplemental application for the booster shots, but since last Friday’s adcomm reviewing them, the plan has devolved into an EUA, which the FDA issued late Thursday evening.

The population that is now eligible for the booster, six months after receiving the first pair of Pfizer-BioNTech vaccines, also narrowed from what Pfizer applied for (everyone who’s eligible for the initial Pfizer shots) to just those who are 65 or older, or at high-risk of a Covid infection, including health care workers and others with occupational hazards.

Stéphane Bancel, AP Images

Fi­nal analy­sis of US-fund­ed Mod­er­na Covid vac­cine tri­al shows 98% ef­fi­ca­cy against se­vere dis­ease

A final look at the results of the placebo-controlled Moderna trial in the New England Journal of Medicine, published Thursday afternoon, shows how the vaccine continues to prevent Covid-19 and severe cases after more than five months following the second shot.

Of the more than 30,000 enrolled in the trial that ultimately led to the vaccine’s EUA, only two people in the vaccine group got a severe form of the disease, compared to 106 in the placebo group — leading to an efficacy of 98%.

Emma Walmsley, GlaxoSmithKline CEO (Credit: Fang Zhe/Xinhua/Alamy Live News)

The fire un­der Glax­o­SmithK­line's Em­ma Walm­s­ley grows as an­oth­er well-known ac­tivist in­vestor grabs its pitch­fork — re­port

Bluebell Capital Partners, a proxy brawler fresh off a campaign to oust global food giant Danone’s CEO and most of its board of directors, has bought a stake in UK drugmaker GlaxoSmithKline with its eyes trained directly on Emma Walmsley, the Financial Times reported Wednesday.

The London-based hedge fund joins another notorious activist firm in Paul Singer’s Elliott Management, which earlier this year called for a shakeup in leadership at GSK to handle what the company described as a wealth of riches across the drug giant’s portfolio hindered by limited vision from top staff.

FDA+ roundup: Bs­U­FA III ready for show­time, court tells FDA to re-work com­pound­ing plan, new guid­ance up­dates and more

The FDA has now spelled out what exactly will be included in the third iteration of Biosimilar User Fee Act (BsUFA) from 2023 through 2027, which similarly to the prescription drug deal, sets fees that industry has to pay for submitting applications, in exchange for firm timelines that the agency must meet.

This latest deal includes several sweeteners for the biosimilar industry, which has yet to make great strides in the US market, with shorter review timelines for safety labeling updates and updates to add or remove an indication that does not contain efficacy data.

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Paul Hudson, Sanofi CEO (Raphael Lafargue/Abaca/Sipa USA; Sipa via AP Images)

In­side look: How a po­ten­tial part­ner­ship turned in­to a $1.9B buy­out for Sanofi

A couple of months before the FDA was set to make a decision on Kadmon’s so-called “knock-your-socks-off kind of results” for its chronic graft-versus-host disease drug, Sanofi put out feelers for a potential collaboration. But an early approval triggered an offer to buy the company outright — and Sanofi didn’t win without a fight, according to an inside look.

Sanofi’s head of business development and licensing Matthieu Merlin reached out to Kadmon on June 26 with a simple request: He wanted to introduce himself and explore potential partnerships, according to an SEC filing. It had been several months since Kadmon’s belumosudil arrived on the FDA’s doorstep, and after delaying their decision once, regulators said they’d have an answer by Aug. 30. But Sanofi wasn’t the only company interested in getting to know the execs over at Kadmon.

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