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.

Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at help@endpointsnews.com with any issues.

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Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Hal Barron. GSK

GSK's Hal Bar­ron her­alds their sec­ond pos­i­tive piv­otal for cru­cial an­ti-BC­MA ther­a­py, point­ing to a push for quick OKs in a crowd­ed field

Hal Barron has his second positive round of Phase III data in hand for his anti-BCMA antibody drug conjugate belantamab mafodotin (GSK2857916). And GSK’s research chief says the data paves the way for their drive in search of an FDA approval for treating multiple myeloma.

It’s hard to overestimate the importance of this drug for GSK, a cornerstone of Barron’s campaign to make a dramatic impact on the oncology market and provide some long-lost excitement for the pharma giant’s pipeline. They’re putting this BCMA program at the front of that charge — looking to lead a host of rivals all aimed at the same target.

We don’t know what the data are yet, but DREAMM-2 falls on the heels of a promising set of data delivered 5 months ago for DREAMM-1. There investigators noted that complete responses among treatment-resistant patients rose to 15% in the extra year’s worth of data to look over, with a median progression-free survival rate of 12 months, up from 7.9 months reported earlier. The median duration of response was 14.3 months.

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UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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Bob Smith, Pfizer

Pfiz­er is mak­ing a $500M state­ment to­day: Here’s how you be­come a lead play­er in the boom­ing gene ther­a­py sec­tor

Three years ago, Pfizer anted up $150 million in cash to buy Bamboo Therapeutics in Chapel Hill, NC as it cautiously stuck a toe in the small gene therapy pool of research and development.

Company execs followed up a year later with a $100 million expansion of the manufacturing operations they picked up in that deal for the UNC spinout, which came with $495 million in milestones.

And now they’re really going for it.

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Video: Putting the AI in R&D — with Badhri Srini­vasan, Tony Wood, Rosana Kapeller, Hugo Ceule­mans, Saurabh Sa­ha and Shoibal Dat­ta

During BIO this year, I had a chance to moderate a panel among some of the top tech experts in biopharma on their real-world use of artificial intelligence in R&D. There’s been a lot said about the potential of AI, but I wanted to explore more about what some of the larger players are actually doing with this technology today, and how they see it advancing in the future. It was a fascinating exchange, which you can see here. The transcript has been edited for brevity and clarity. — John Carroll

As­traZeneca’s Imfinzi/treme com­bo strikes out — again — in lung can­cer. Is it time for last rites?

AstraZeneca bet big on the future of their PD-L1 Imfinzi combined with the experimental CTLA-4 drug tremelimumab. But once again it’s gone down to defeat in a major Phase III study — while adding damage to the theory involving targeting cancer with a high tumor mutational burden.

Early Wednesday the pharma giant announced that their NEPTUNE study had failed, with the combination unable to beat standard chemo at overall survival in high TMB cases of advanced non-small cell lung cancer. We won’t get hard data until later in the year, but the drumbeat of failures will call into question what — if any — future this combination can have left.

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Why would Am­gen want to buy Alex­ion? An­a­lysts call hot­ly ru­mored takeover un­like­ly, but seize the mo­ment

A rumor that Amgen is closing in on buyout deal for Alexion has sparked a guessing game on just what kind of M&A strategy Amgen is pursuing and how much Alexion is worth.

Mizuho analyst Salim Syed first lent credence to the report out of the Spanish news outlet Intereconomía, which said Amgen is bidding as much as $200 per share. While the source may be questionable, “the concept of this happening doesn’t sound too crazy to me,” he wrote.