Jack Kenny, CEO of Meridian Bioscience

Ko­re­an di­ag­nos­tics biotech goes transpa­cif­ic, agree­ing to shell out $1.5B to take Merid­i­an pri­vate

A Ko­re­an di­ag­nos­tics play­er that made mil­lions of Covid-19 tests in the ear­ly stages of the pan­dem­ic is now ex­pand­ing in­to the US mar­ket.

Cincin­nati-based Merid­i­an Bio­science put up no­tice Thurs­day morn­ing that it’s go­ing to be ac­quired by SD Biosen­sor, ac­com­pa­nied by in­vest­ment firm SJL Part­ners for $1.53 bil­lion in cash.

How the trans­ac­tion will work, ac­cord­ing to Merid­i­an, is that a “new­ly formed af­fil­i­ate ve­hi­cle” formed by SD Bio and SJL will ac­quire the com­pa­ny. In ex­change, Merid­i­an share­hold­ers will re­ceive $34 per share, a 32.4% pre­mi­um over the com­pa­ny’s share price $VI­VO when an of­fer was first made af­ter mar­ket close on March 17. The biotech’s price at that time was $25.67 per share.

Young Shik Cho

The deal is ex­pect­ed to close some­time in Q4 2022.

SD Biosen­sor chair­man Young Shik Cho said in a state­ment that “We are pleased to be a fam­i­ly with Merid­i­an Bio­science as a great part­ner for ac­cel­er­at­ing our en­try in­to the U.S. IVD (in vit­ro di­ag­nos­tics) mar­ket.”

SD Biosen­sor was the same com­pa­ny that Gingko Bioworks ac­quired its 50 mil­lion rapid anti­gen tests from in 2020.

Merid­i­an, formed in 1976, sells di­ag­nos­tic tests for dif­fer­ent dis­eases, in­clud­ing Covid-19 — along with test­ing reagents.

As part of the merg­er agree­ment, the new­ly formed “ve­hi­cle” will get all of Merid­i­an’s out­stand­ing shares. And the trans­ac­tion is not com­plete­ly set in stone yet — while Merid­i­an’s board has al­ready agreed to the deal, the trans­ac­tion is sub­ject to a few more things. Those in­clude ap­proval by Merid­i­an share­hold­ers, re­ceipt of re­quired reg­u­la­to­ry ap­provals, and the ab­sence of spec­i­fied “ma­te­ri­al­ly ad­verse out­comes” of Merid­i­an’s pre­vi­ous­ly dis­closed and on­go­ing in­ves­ti­ga­tion by the DOJ, among oth­ers.

That DOJ in­ves­ti­ga­tion is around Merid­i­an’s sub­sidiary, ac­cord­ing to the com­pa­ny’s most re­cent 10-K with the SEC in No­vem­ber 2021. Back in 2018, Merid­i­an’s sub­sidiary Mag­el­lan re­ceived a sub­poe­na from the DOJ re­gard­ing its Lead­Care prod­uct line — a blood test to de­tect lead poi­son­ing. Last year, the de­part­ment is­sued four more sub­poe­nas — two for an ex-em­ploy­ee and a cur­rent em­ploy­ee to tes­ti­fy be­fore a grand ju­ry in H1, and two more for both wit­ness­es and doc­u­ments in H2. The in­ves­ti­ga­tion is still on­go­ing.

Once the trans­ac­tion clears, Merid­i­an not­ed that SDB will own ap­prox­i­mate­ly 60% and SJL will own ap­prox­i­mate­ly 40% of the com­pa­ny, which will no longer be trad­ed or list­ed on a pub­lic ex­change.

The re­lease added that SDB and SJL plan “to op­er­ate Merid­i­an as an in­de­pen­dent en­ti­ty fol­low­ing the com­ple­tion of the trans­ac­tion and the Com­pa­ny’s lead­er­ship team and head­quar­ters are ex­pect­ed to re­main in place.”

An­a­lysts with William Blair not­ed that the of­fer was 4.5 times the last 12 months of Merid­i­an’s sales. Not­ed in the re­port,

In terms of per­for­mance, Merid­i­an has been a stand­out in a dis­as­trous year for the sec­tor (and broad­er mar­ket) with the stock up 65% year-to-date and up 52% over the last 12 months.De­spite this, in­vestor in­ter­est had been rather lim­it­ed un­til the last cou­ple of weeks when we start­ed to re­ceive a flur­ry on in­ter­est on the name with a fo­cus on why the stock had been so strong.

Merid­i­an de­clined to com­ment for this sto­ry. How­ev­er, Merid­i­an CEO Jack Ken­ny said in a re­lease that “We are ex­cit­ed to an­nounce this new chap­ter for Merid­i­an af­ter the many years spent trans­form­ing the Com­pa­ny for sus­tain­able growth.”

Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; 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.

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Paul Perreault, CSL Behring CEO

CSL lands FDA ap­proval for he­mo­phil­ia B gene ther­a­py, sets $3.5M list price

The FDA has approved the world’s first gene therapy for hemophilia B, ushering into the market a treatment that’s historic in both what it promises to do and how much it will cost.

CSL will be marketing the drug, Hemgenix, at a list price of $3.5 million — which sets a new record for the most expensive single-use gene therapy in the US.

In a statement provided to Endpoints News, the Australian company noted that the current costs of treating people with moderate to severe hemophilia B can be significant over a lifetime. By some estimates, healthcare systems could spend more than $20 million per person.

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Rob Davis, Merck CEO

Up­dat­ed: No Seagen here: 'Do more' means a small $1.35B pur­chase of Ima­go for Mer­ck

Merck is making an acquisition, the Big Pharma announced before Monday’s opening bell. No, Seagen is not entering the fold, as had been speculated for quarters.

Folding under Merck’s wings will be Pfizer-backed Imago BioSciences. For nearly a year, Merck CEO Rob Davis has been saying the pharma giant needs to “do more” on the business development front after its 2021 $11.5 billion acquisition of Acceleron.

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Image: Shutterstock

MIT re­searchers re­veal DNA "Paste" tech be­hind lat­est gene edit­ing start­up

MIT scientists have developed a tool that they say can insert large gene sequences where they want in the genome.

In a paper published Thursday in Nature Biotechnology, MIT fellows Omar Abudayyeh, Jonathan Gootenberg and colleagues detail a technology they call PASTE, which they say can potentially be used to insert long strands of DNA and treat genetic diseases caused by many different mutations, such as cystic fibrosis and Leber congenital amaurosis, a rare eye disorder that causes blindness.

Elon Musk (GDA via AP Images)

Biggest drug com­pa­nies halt­ed Twit­ter ad buys af­ter Lil­ly in­sulin spoof

Almost all of the drug industry’s biggest advertisers cut their spending on Twitter to zero or near-zero over the last two weeks amid worries about impersonation of their brands by pranksters and the future of the social media company.

Among 18 of the biggest pharmaceutical advertisers in the US market, 12 cut their Twitter ad spending to nothing for the week beginning Nov. 14, according to Pathmatics, which tracks data on prescription drug ad spending as well as general corporate advertising. The list of drugmakers cutting spending to zero includes Merck, AstraZeneca, Eli Lilly, Novartis, Pfizer and others.

Peter Hecht, Cyclerion CEO

Cy­cle­ri­on board quick­ly nix­es CEO Pe­ter Hecht's un­ortho­dox pitch for low cash re­serves

It’s been less than two months since Cyclerion laid out a new R&D strategy around its lead drug in mitochondrial diseases, one that triggered the company to lay off close to half of its employees and explore licensing deals for the rest of the pipeline. But CEO Peter Hecht apparently has other plans in mind.

Hecht, who led Ironwood for close to 20 years before spinning out Cyclerion, disclosed in an SEC filing Monday that a “newly-formed private company” that he “may have or may acquire an interest” submitted a proposal to Cyclerion the day prior to purchase Cyclerion’s CNS assets, including CY6463 and CY3018 — the top two programs listed in the pipeline.

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J&J's Spra­va­to pulls a PhI­II win against Sero­quel XR in treat­ment-re­sis­tant de­pres­sion

A day before Thanksgiving, J&J’s Janssen has a new cut of Phase III Spravato data to be grateful for.

The pharma giant announced on Wednesday that its nasal spray, also known as esketamine, beat extended-release quetiapine, previously sold by AstraZeneca as Seroquel XR, in treatment-resistant depression (TRD). Of 676 adults, a significantly higher number of patients on Spravato were able to achieve remission and avoid relapse after 32 weeks, according to J&J.

Dermavant Sciences' first consumer TV ad for its Vtama psoriasis med shows people ready for a new topical treatment.

Roivant’s Der­ma­vant de­buts first-ever TV com­mer­cial for pso­ri­a­sis cream Vta­ma

Dermavant Sciences has been marketing its first product, psoriasis med Vtama, to dermatologists for months, but on Tuesday it rolled out its first consumer campaign. The debut DTC effort including a streaming TV commercial encourages patients to a “Topical Uprising” in a nod to Vtama being a topical cream.

In the new commercial, a swell of people discards scarves and jacket coverings, gathering in the street to converge on a pharmacy to demand a steroid-free prescription. A moment of levity follows when a pharmacist says, “You know you can just talk to your doctor, right?” The gathered crowds collectively says, “Oh.”

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FDA preps for DMD drug gener­ics as Sarep­ta has yet to fin­ish its con­fir­ma­to­ry tri­al

The FDA typically releases guidance to help generic drug manufacturers develop new copycats of small molecule drugs, oftentimes in preparation for a brand name product’s patents or exclusivity to expire.

This week, FDA released such bioequivalence guidance for any generic drugmakers looking to take on Sarepta’s Duchenne muscular dystrophy (DMD) drug Exondys 51 (eteplirsen), even though the drug’s sponsor has yet to convert the accelerated approval to a full approval, showing clinical benefit.