GSK bags Tesaro for $5B as it leaps back in­to com­mer­cial on­col­o­gy and beefs up can­cer drug pipeline

Glax­o­SmithK­line has struck a deal to buy Tesaro $TSRO in a $5.1 bil­lion deal that will vault the phar­ma gi­ant in­to the com­mer­cial on­col­o­gy mar­ket as it stakes out a big new role for it­self in the boom­ing can­cer field.

Long dis­cussed af­ter Tesaro man­age­ment put out the word on sev­er­al oc­ca­sions in the past year that it was look­ing to sell the com­pa­ny and its PARP in­hibitor Ze­ju­la, GSK is pay­ing $75 a share, trig­ger­ing an in­stant 60% spike in the stock this morn­ing as in­vestors caught up to the news to­day.

Wait­ing out the ear­ly buzz al­lowed GSK to pick this com­pa­ny up for a rel­a­tive bar­gain. Tesaro start­ed 2018 at $82 a share, but watched its share price slide 42% un­til to­day as an­a­lysts beat them up over their poor sales per­for­mance. In ear­ly 2017, the stock hit a high of $190. That helps ex­plain why Tesaro was nev­er able to suc­ceed at auc­tion­ing the com­pa­ny ear­li­er, when its share price was still in­flat­ed.

Ze­ju­la is one of sev­er­al PARPs to hit the mar­ket af­ter As­traZeneca pi­o­neered the field with the first ap­proval for Lyn­parza, though lit­tle Tesaro has strug­gled to play catch-up along­side Clo­vis and Pfiz­er, which won a re­cent ap­proval for its PARP, ob­tained in the Medi­va­tion buy­out.

It won’t be easy. As­traZeneca and its new part­ners at Mer­ck have poured re­sources in­to the Lyn­parza fran­chise, win­ning block­buster re­turns as they widen their lead over the pack. And the ac­qui­si­tion wasn’t ex­act­ly cheered by GSK in­vestors, who drove the stock down a painful 8% af­ter the news hit.

The ac­qui­si­tion, though, gives Hal Bar­ron’s resur­gent can­cer re­search group un­der Ax­el Hoos a new drug to work with, as GSK pur­sues new in­di­ca­tions in a range of clin­i­cal tri­als aimed at ex­pand­ing its mar­ket pres­ence in on­col­o­gy.

GSK is just now jump­ing back in­to the com­mer­cial can­cer field af­ter strik­ing a deal with No­var­tis to flip its late-stage and mar­ket­ed on­col­o­gy prod­ucts for a port­fo­lio of vac­cines.

The move comes about a year af­ter Bar­ron — who had a leg­endary run at Genen­tech — took the top R&D job at GSK. As he told me ear­li­er this year, his new team — in­clud­ing new BD chief Kevin Sin — was hard at it scour­ing the globe for deals that made sense for the com­pa­ny.

At this point, a weary Tesaro and Ze­ju­la looked un­der­val­ued. And that made it a prime tar­get for the phar­ma com­pa­ny. GSK has been a ma­jor play­er in HIV and vac­cines, but its phar­ma R&D ops are the weak­est in its heavy­weight class.

This new deal brings a pipeline that al­so adds a PD-1 — one in a tidal wave of check­points — as well as TIM-3 and LAG-3 as­sets, which are al­so not so un­com­mon. In the mean­time, Bar­ron made it clear in a call with re­porters this morn­ing that he was ea­ger to see about the po­ten­tial to ex­pand Ze­ju­la in­to the broad­er HRD-pos­i­tive com­mu­ni­ty, which would dra­mat­i­cal­ly in­crease the size of the mar­ket.

PARPs work by in­ter­fer­ing with DNA re­pair mech­a­nisms that al­low can­cer cells to sur­vive, open­ing up an av­enue that could re­late to a va­ri­ety of can­cers.

So what hap­pens to the 800 or so staffers at Tesaro? 

Em­ma Walm­s­ley

In a call with re­porters Mon­day morn­ing, CEO Em­ma Walm­s­ley not­ed that the deal wasn’t be­ing dri­ven by cost syn­er­gies and al­so brings com­mer­cial ca­pa­bil­i­ties back to a com­pa­ny that cur­rent­ly doesn’t have an on­col­o­gy sales force. In time, she added, they’ll look at syn­er­gies — code for cuts — but it’s ear­ly days on that.

Walm­s­ley al­so de­clined to say just what kind of peak sales they can ex­pect from Ze­ju­la. In the past, though, peak sales es­ti­mates have climbed to $2 bil­lion.

“Our strong be­lief is that PARP in­hibitors are im­por­tant med­i­cines that have been un­der ap­pre­ci­at­ed in terms of the im­pact they can have on can­cer pa­tients,” Bar­ron not­ed in a state­ment. “We are op­ti­mistic that Ze­ju­la will demon­strate ben­e­fit in pa­tients with ovar­i­an can­cer be­yond those who are BR­CA-pos­i­tive as front-line treat­ment. We are al­so very ex­cit­ed that through this trans­ac­tion, we will have the op­por­tu­ni­ty to work with an out­stand­ing Boston-based on­col­o­gy group with deep clin­i­cal de­vel­op­ment ex­per­tise and to­geth­er we will ex­plore Ze­ju­la’s ef­fi­ca­cy be­yond ovar­i­an can­cer in­to mul­ti­ple tu­mour types to help many more pa­tients.”


Im­age: Ax­el Hoos, Hal Bar­ron, John Lep­ore, Kevin Sin and Tony Wood.

Image courtesy of The Janssen Pharmaceutical Companies of Johnson & Johnson.

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We are living in a new era of healthcare that is rapidly advancing progress impacting patient outcomes and experiences. We’ve seen a remarkable pace of transformational innovation, applied research, and advanced clinical development over the last decade.

Despite this tremendous progress, there is much more work to be done, and patients are counting on us – now more than ever – to continue that momentum. At the heart of our industry is a focus on developing and delivering medicines for some of the world’s most challenging diseases, including those that have few or no effective treatments today.

Roger Perlmutter, Eikon Therapeutics CEO

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Eikon Therapeutics announced three business development deals on Thursday, effectively dropping in a pipeline of cancer drugs alongside more than $100 million in fresh funding.

The Hayward, CA-based company has become one of biotech’s richest startups since its 2019 founding, having raised nearly $775 million. It’s developing a massive, automated research approach built around Nobel Prize-winning microscope science to peer inside cells and watch proteins in action. After its Series B last year, PitchBook reported a $3.02 billion valuation. And while CEO Roger Perlmutter declined to comment on that figure, he said its first tranche of nearly $106 million in Series C funding is a “meaningful step-up to our Series B valuation.”

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Peter van de Sande, Synaffix CEO

Lon­za shells out $107M cash to snap up Synaf­fix and its ADC plat­form

After lining up a string of partnerships over the years, Dutch antibody-drug conjugate specialist Synaffix has found a new home: Lonza, the contract development and manufacturing giant.

Lonza is paying about $107 million (€100 million) in cash to acquire Synaffix, with up to $64 million (€60 million) in “additional performance-based consideration” on the table. Synaffix’s ADC tech platform will now become part of Lonza’s offering for biopharma clients, lending its bioconjugate technologies to not just ADCs but also targeted gene therapy, immune cell engagers and other applications.

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Eu­ro­pean Par­lia­ment calls mem­ber states to ac­tion on an­timi­cro­bial re­sis­tance

Members of the European Parliament have called on EU countries to develop national action plans against antimicrobial resistance (AMR), calling it a top-three priority health threat.

Parliament on Thursday announced recommendations for the fight against AMR, including national action plans that must be updated at least every two years, an EU-level database tracking AMR and antimicrobial use and increased partnership between the pharma industry, patient groups and academia.

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Roche plans to di­vest from lega­cy Genen­tech man­u­fac­tur­ing fa­cil­i­ty in Cal­i­for­nia

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The Swiss pharma announced Wednesday that it plans to divest from Genentech’s manufacturing facility in Vacaville, CA, around 58 miles northeast of San Francisco. According to a statement from Roche, the move is part of a “broader strategy” to bring its manufacturing capabilities in line with its future pipeline. Roche is starting the process of finding a buyer for the site but has not named any candidates yet.

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Who's con­fi­dent­ly in­vest­ing in biotech star­tups dur­ing these tense days? We've got some an­swers

We’ve got a changeup to our event schedule in Boston next week, where we’ll be doing a mix of live/streaming events at our base at The Seaport Hotel as part of a two-day lineup of webinars, virtual firesides and a cocktail hour Q&A with a veteran of the biotech financing scene.

The 9:30-10:30 am ET live slot on Tuesday, June 6, will now feature a panel conversation on the current state of affairs for VC investing in biotech, focusing on what startups are getting cash — and how. Alaa Halawa, head of US ventures at Mubadala, is confirmed, along with Brian Goodman at MPM and Geoff von Maltzahn, a general partner at Moderna-buoyed Flagship. I have a couple of other invites out and will let you know how that plays out.

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The Modulo Bio team with CEO Michael Horowitz (fourth from right in semicircle)

Ex­clu­sive: With $8M, neu­ro start­up Mod­u­lo Bio emerges to test small mol­e­cules for ALS, de­men­tia in CEO’s per­son­al mis­sion

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Albert Bourla, Pfizer CEO (Michel Euler/AP Images, Pool)

FDA ap­proves Pfiz­er’s RSV shot for old­er adults, tee­ing up a com­pet­i­tive $17B vac­cine mar­ket

The FDA approved Pfizer’s RSV vaccine called Abrysvo for older adults on Wednesday, placing another Big Pharma onto the commercial stage ahead of the next RSV season.

Pfizer’s approval comes weeks after GSK won approval for its rival shot, Arexvy. Those two vaccines are both approved for use in adults 60 years and older and will be reviewed by a CDC panel in June before they’re expected to commercially launch this fall. Wall Street analysts see RSV as the next multibillion-dollar vaccine market, with Jefferies analysts recently forecasting the RSV market will grow to $17 billion over the next decade.

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Richard Pazdur, FDA's OCE director (Flatiron Health via YouTube)

FDA's can­cer chief weighs in on com­mon chemo short­ages — re­port

Richard Pazdur, director of the FDA’s Oncology Center of Excellence, attributes the current shortage of two cancer drugs to drug companies that haven’t invested in building out their production capacity.

In an interview with The Cancer Letter, a weekly cancer publication, Pazdur said that the current shortages of cisplatin and carboplatin, a pair of drugs used to treat a wide range of cancer patients, are the result of two problems: manufacturers not investing in enhancing production capacity, and drug companies being dependent on one supplier of raw ingredients. The cisplatin shortage followed an inspection that revealed quality issues at a manufacturing facility, which then led to the shutdown of production. This led to a surge in carboplatin demand, creating a secondary shortage.

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