Here’s the in­side ac­count of Gilead­'s 11-week sprint to its $12B Kite buy­out

What start­ed as a ca­su­al dal­liance be­tween ex­ec­u­tives at Gilead and Kite in 2015 marked by some oc­ca­sion­al flir­ta­tion over head-turn­ing tech­nol­o­gy turned se­ri­ous ear­ly this year, prob­a­bly at JP Mor­gan, as two top deal­mak­ers — Gilead’s An­drew Dick­in­son and Kite’s He­len Kim — de­cid­ed to see if they should get se­ri­ous about a union of the two biotechs.

By mid-June the two CEOs, John Mil­li­gan and Arie Bellde­grun, got in­to the act. And over the next 11 weeks the over­ture turned pas­sion­ate enough for Mil­li­gan and Gilead to up their ini­tial of­fer by about $5 bil­lion.

Arie Bellde­grun and John Mil­li­gan

There was an ini­tial bid, which was stiffly re­buffed. The come­back with a sweet­ened of­fer was al­so re­ject­ed, but as the num­bers grew larg­er — so did the in­ter­est in a buy­out as Gilead turned from a spec­ta­tor in the fi­nal leg of one of the most close­ly-watched de­vel­op­ment races in biotech to a jock­ey in the fi­nal stretch.

It’s all spelled out in a new SEC fil­ing that says a lot about how these big deals get done, and the val­u­a­tions that game-chang­ing tech­nolo­gies like CAR-T are fetch­ing.

In a sim­pli­fied blow-by-blow, here are the high­lights:

  • Bellde­grun and Mil­li­gan, chap­er­oned by Gilead COO Kevin Young, had their first sit down about a deal on June 12.
  • At the end of June there was a cru­cial gath­er­ing of Mil­li­gan with the team at Kite to dis­cuss com­mer­cial and man­u­fac­tur­ing plans. Kite had been fine tun­ing this pre­sen­ta­tion for more than a year, and based on Mil­li­gan’s warm com­ments lat­er about the San­ta Mon­i­ca crew at Kite, he clear­ly hit it off with some of the key play­ers.
  • The next key event was No­var­tis’ ODAC com­mit­tee meet­ing at the FDA on Ju­ly 12 for CTL019, which led to a near unan­i­mous vote for an ap­proval. Gilead ex­ecs watched every minute of it. It was a chance to size up an im­por­tant po­ten­tial ri­val. “Al­though Kite’s CAR-T ther­a­py, axi-cel, was sub­mit­ted for ap­proval for a dif­fer­ent in­di­ca­tion, the out­come of the ODAC meet­ing was im­por­tant to fur­ther in­form Par­ent’s (Gilead’s) eval­u­a­tion of Kite and CAR-T ther­a­pies.”
  • The very next day Kite R&D chief David Chang ar­rived at Gilead HQ to dis­cuss his work.
  • It must have gone well. Three days lat­er came the first of­fer: $127 per share in cash, a strong 51% pre­mi­um over the 60-day weight­ed av­er­age.
  • Ju­ly 19, the Kite board slammed the door on that. They not on­ly said no to that price, they added the com­pa­ny was not for sale.
  • Ju­ly 28. How about $160? Bellde­grun said he was still dis­ap­point­ed, but he was al­so clear­ly not of­fend­ed. How about an­oth­er get-to­geth­er in LA? Now, the com­pa­ny was clear­ly for sale.
  • On Au­gust 1 the top ex­ecs at both com­pa­nies gath­ered to dis­cuss not just the lead drug, mar­ket­ing and man­u­fac­tur­ing, but all the next-gen re­search work that Kite has un­der­way.  Bellde­grun to Mil­li­gan: That was a dis­ap­point­ing of­fer, if this is go­ing to hap­pen, you have to make it ‘com­pelling.’ Mil­li­gan to Bellde­grun: That’s go­ing to be a tough sale to the board.
  • On Au­gust 8, af­ter meet­ings and fol­lowup dis­cus­sions, Kite an­nounced with some fan­fare that they had filed their IND and that the FDA would not re­quire a com­mit­tee re­view. The news made a splash, and it didn’t es­cape the at­ten­tion of Mil­li­gan or any­one at Gilead in the know.
  • Au­gust 18. Mil­li­gan and Gilead ex­ec­u­tive chair­man John Mar­tin met with Bellde­grun in New York and in­for­mal­ly of­fered $176 a share. Bellde­grun coun­tered quick­ly, ask­ing for $180, an 82% pre­mi­um.

Due dili­gence fol­lowed. Sul­li­van & Cromwell weighed in. Kite ex­ecs had a chance to talk about re­tain­ing Kite staff. And on Au­gust 28, the deal was done at $180 a share, or close to $12 bil­lion in to­tal.

Bellde­grun’s share of that is about $600 mil­lion based on­ly on his own stock.

There was nev­er a men­tion of any oth­er bid­der or at­tempt to start a bid­ding war, as David Hung had done with great ef­fect when he was di­rect­ing the ne­go­ti­a­tions with Pfiz­er over the $14 bil­lion Medi­va­tion deal.

Late Fri­day ap­proval; Trio of biotechs wind down; Stem cell pi­o­neer finds new fron­tier; Biotech icon to re­tire; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

I hope your weekend is off to a nice start, wherever you are reading this email. As for me, I’m trying to catch the tail of the Lunar New Year festivities.

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Pfiz­er lays off em­ploy­ees at Cal­i­for­nia and Con­necti­cut sites

Pfizer has laid off employees at its La Jolla, CA, and Groton, CT sites, according to multiple LinkedIn posts from former employees.

The Big Pharma confirmed to Endpoints News it has let go of some employees, but a spokesperson declined to specify how many workers were impacted and the exact locations affected. Earlier this month, the drug developer had confirmed to Endpoints it was sharpening its focus and doing away with some early research on areas such as rare disease, oncology and gene therapies.

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Eliot Forster, F-star CEO (Rachel Kiki for Endpoints News)

F-star gets down to the wire with $161M sale to Chi­nese buy­er as na­tion­al se­cu­ri­ty con­cerns linger

With the clock ticking on F-star Therapeutics’ takeover by a Chinese buyer, the companies are still scrambling to remove a hold on the deal from the US government’s Committee on Foreign Investment in the United States.

F-star and invoX Pharma said they are “actively negotiating” with CFIUS “about the terms of a mitigation agreement to address CFIUS’s concerns regarding potential national security risks posed by the transaction.”

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Jake Van Naarden, Loxo@Lilly CEO

Lil­ly en­ters ripe BTK field with quick FDA nod in man­tle cell lym­phoma

Eli Lilly has succeeded in its attempt to get the first non-covalent version of Bruton’s tyrosine kinase, or BTK, inhibitors to market, pushing it past rival Merck.

The FDA gave an accelerated nod to Lilly’s daily oral med, to be sold as Jaypirca, for patients with relapsed or refractory mantle cell lymphoma.

The agency’s green light, disclosed by the Indianapolis Big Pharma on Friday afternoon, catapults Lilly into a field dominated by covalent BTK inhibitors, which includes AbbVie and Johnson & Johnson’s Imbruvica, AstraZeneca’s Calquence and BeiGene’s Brukinsa.

Filip Dubovsky, Novavax CMO

No­vavax gets ready to take an­oth­er shot at Covid vac­cine mar­ket with next sea­son plans

While mRNA took center stage at yesterday’s FDA vaccine advisory committee meeting, Novavax announced its plans to deliver an updated protein-based vaccine based on new guidance.

Vaccines and Related Biological Products Advisory Committee (VRBPAC) members voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all future vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

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Alon Seri-Levy, Sol-Gel Technologies CEO

Bridge­Bio com­pa­ny sells off rare dis­ease can­di­date to Gal­der­ma part­ner

Israeli biotech Sol-Gel Technologies announced Friday that it got its hands on a rare disease drug candidate from PellePharm for almost $75 million, amid claims that the drug has the potential to reach a $300 million market.

Execs said on a conference call Friday morning that patidegib, a hedgehog signaling pathway blocker, is being investigated to treat Gorlin syndrome, a rare genetic disorder that increases the risk of developing certain kinds of cancer such as basal cell skin cancer and medulloblastoma, a type of brain cancer. The disease affects around one in every 31,000 people, and an estimated 70,000 people worldwide.

CBER Director Peter Marks (Susan Walsh/AP Images)

FDA ad­vi­so­ry com­mit­tee votes unan­i­mous­ly in fa­vor of bi­va­lent Covid shots re­plac­ing pri­ma­ry se­ries

The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all current vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

The vote marks an effort to clear up confusion around varying formulations and dosing schedules for current primary series and booster vaccines, as well as “get closer to the strains that are circulating,” according to committee member Paul Offit, professor of pediatrics at the Children’s Hospital of Philadelphia.

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Bris­tol My­ers, Charles Riv­er join Se­ries A fund­ing for iVex­Sol

Massachusetts-based iVexSol has secured funding to the tune of $23.8 million in its latest Series A round. The new investors include Bristol Myers Squibb, manufacturer Charles River Laboratories and Asahi Kasei Medical.

iVexSol is a manufacturer of lentiviral vectors (LVV), used in making gene therapies, and this latest round of fundraising brings its total Series A total over $39 million, which will be used to recruit more employees and bolster its technology.

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John Rim, Samsung Biologics CEO (Samsung/PR Newswire)

Sam­sung Bi­o­log­ics spells out ex­pan­sion plans in South Ko­rea and US

The CDMO arm of one of South Korea’s largest conglomerates has posted its year-end results and plans for 2023, which include new construction.

Samsung Biologics netted north of KRW 3 trillion ($2.4 billion) in 2022 revenue and an operating profit of KRW 983.6 billion ($799 million), which the company touted on Friday as “record-high earnings.” The revenue boost was 55% compared to 2021.