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.

Once fu­ri­ous over No­var­tis’ da­ta ma­nip­u­la­tion scan­dal, the FDA now says it’s noth­ing they need to take ac­tion on

Back in the BP era — Before Pandemic — the FDA ripped Novartis for its decision to keep the agency in the dark about manipulated data used in its application for Zolgensma while its marketing application for the gene therapy was under review.

Civil and criminal sanctions were being discussed, the agency noted in a rare broadside at one of the world’s largest pharma companies. Notable lawmakers cheered the angry regulators on, urging the FDA to make an example of Novartis, which fielded Zolgensma at $2.1 million — the current record for a one-off therapy.

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Covid-19 roundup: GSK, Am­gen tai­lor R&D work to fit the coro­n­avirus age; Doud­na's ge­nomics crew launch­es di­ag­nos­tic lab

You can add Amgen and GSK to the list of deep-pocket drug R&D players who are tailoring their pipeline work to fit a new age of coronavirus.

Following in the footsteps of a lineup of big players like Eli Lilly — which has suspended patient recruitment for drug studies — Amgen and GSK have opted to take a more tailored approach. Amgen is intent on circling the wagons around key studies that are already fully enrolled, and GSK has the red light on new studies while the pandemic plays out.

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In a stun­ning set­back, Amarin los­es big patent fight over Vas­cepa IP. And its high-fly­ing stock crash­es to earth

Amarin’s shares $AMRN were blitzed Monday evening, losing billions in value as reports spread that the company had lost its high-profile effort to keep its Vascepa patents protected from generic drugmakers.

Amarin had been fighting to keep key patents under lock and key — and away from generic rivals — for another 10 years, but District Court Judge Miranda Du in Las Vegas ruled against the biotech. She ruled that:
(A)ll the Asserted Claims are invalid as obvious under 35 U.S.C.§ 103. Thus, the Court finds in favor of Defendants on Plaintiff’s remaining infringementclaim, and in their favor on their counterclaims asserting the invalidity of the AssertedClaims under 35 U.S.C. § 103.

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Covid-19 roundup: J&J, BAR­DA set ear­ly 2021 fin­ish line for $1B vac­cine race; FDA al­lows emer­gency drug use, ahead of piv­otal da­ta

J&J has zeroed in on a Covid-19 vaccine candidate that it hopes to begin testing in humans by September this year — with the extraordinary goal of getting it ready for emergency use in early 2021. And together with BARDA, it’s committing $1 billion to make it happen.

That kind of accelerated timeline would fall on the fast side of NIAID director Anthony Fauci’s well-publicized prediction that it would be another 12 to 18 months before a vaccine can be available for public use. A Phase I trial of Moderna’s mRNA vaccine began two weeks ago, and both the biotech and fellow mRNA player CureVac have discussed similar, if not even faster, timelines for emergency use among healthcare workers.

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As­traZeneca says its block­buster Farx­i­ga proved to be a game-chang­er in CKD — wrap­ping PhI­II ear­ly

If the FDA can still hold up its end of the bargain, AstraZeneca is already on a short path to scooping up a cutting-edge win with a likely approval for their SGLT2 drug Farxiga in cutting the risk of heart failure. Now the pharma giant says it can point to solid evidence that the drug — initially restricted to diabetes — also works for chronic kidney disease, potentially adding a blockbuster indication for the franchise.

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It is 'kind of a proven tech­nol­o­gy': Hep B vac­cine mak­er joins glob­al hunt for coro­n­avirus vac­cine

Using lab-grown proteins that are engineered to mimic the architecture of viruses to induce an immune response, VBI Vaccines is joining the hunt for a coronavirus vaccine — harnessing technology that has initially been proved safe in early trials as a prophylactic for cytomegalovirus (CMV) infection.

Unlike the raft of the companies in the Covid-19 vaccine race — including Moderna, CureVac and J&J — VBI is taking a pan-coronavirus approach, by developing a vaccine that will encompass Covid-19, severe acute respiratory syndrome (SARS), and Middle East respiratory syndrome (MERS).

Can a pair of top AveX­is alum­ni steer a new gene ther­a­py up­start to R&D glo­ry? 3 VCs bet $60M on it

VCs love few things more than a proven executive team when it comes to launching a new company. And now a group of A-listers has turned to a pair of top execs out of AveXis to steer the latest gene therapy player into the clinic.

The biotech is Waltham, MA-based Affinia and the two execs are Sean Nolan and Rick Modi — the former CEO and CBO respectively of AveXis, the gene therapy pioneer that fetched $8.7 billion in a sale to Novartis. Nolan has now taken the chairman’s role at Affinia while Modi moves up to the CEO post at the company.

Un­de­terred by a pan­dem­ic, Gilde Health­care rais­es their largest fund yet

When Pieter van der Meer started raising the capital for Gilde Healthcare’s fifth fund in the waning months of 2019, he had his eyes on a different chain of events that could change the healthcare system and perhaps even play to his firm’s advantage: The US presidential election.

Since raising their third fund in 2011, the 34-year-old Dutch firm had focused on value-based care. They chose late-stage biotechs that came up with new devices and delivery systems for de-risked established compounds, and when they chose preclinical biotechs, they spoke with potential pharma partners, payers and regulators to ask where and at what prices the drug made sense. As the Democratic primary became a contest over how to lower healthcare costs, it looked like a strategy that could pay off.

Daniel O'Day (AP Images)

Gilead CEO Dan O'­Day of­fers a de­tailed ex­pla­na­tion on remde­sivir ac­cess — re­as­sur­ing an­a­lysts that Covid-19 da­ta are com­ing fast

After coming under heavy fire from consumer groups ready to pummel them for grabbing the FDA’s orphan status for remdesivir — reserved to encourage the development of rare disease therapies — Gilead CEO Daniel O’Day had some explaining to do about the company’s approach to providing access to this drug to patients suffering from Covid-19. And he set aside time over the weekend to patiently explain how they are making their potential pandemic drug available in a new program — one he feels can better be used to address a growing pack of infected patients desperately seeking remdesivir under compassionate use provisions.

In addition to trying to reassure patients that they will once again have an avenue to pursue access, O’Day also reassured some analysts who had been fretting that China’s quick comeback from the coronavirus outbreak could derail its ultra-fast schedule for testing the drug in patients. The data are still expected in a few weeks, he says in the letter, putting the readout in April.

O’Day emphasizes that Gilead intends to pursue a pricing approach that will make this drug widely available — if it proves effective and safe. But no one is quite sure just what the longterm value would be, given the work being done on a variety of vaccines that may be rolled out as early as this fall — at least to the most heavily threatened groups.

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