Endpoints assesses the big biopharma R&D stories of the week, with a little added commentary on what they mean for the industry.
A Bristol-Myers Squibb takeover? Not a great idea
This week murmurs about a possible takeover of Bristol-Myers Squibb turned into a shout after Carl Icahn reportedly stepped up to buy into the big biotech. After a series of painful setbacks on Opdivo, BMS has suddenly traded in its white hat for a black one as investors switched allegiance to Merck.
No doubt, part of the problem at Bristol-Myers was self inflicted. The company became too ambitious and set itself up for a Phase III fall on lung cancer. And investors can be quite unforgiving these days.
But a takeover?
The rationale here is that additional consolidation is needed in the biopharma world. But if there is a buyout — particularly if Pfizer should decide to do this — we all know the outcome. Thousands of jobs will be cut for no good reason. A fine R&D group with a history of success and the probability of more good things to come will be destroyed. Two companies that spent a combined $13 billion on research would become one with $8 billion. Maybe $8.5 billion.
We know that megamergers are a bad idea. They’ve happened before and they universally destroy value. Pfizer, quite capable at designing and executing Phase III studies, is hardly an innovative company. Most Big Pharmas aren’t. Bristol-Myers, though, is innovative. They can survive the setbacks. A megamerger is an awful idea. Let’s all hope the rumors don’t come true.
Scott Gottlieb should be named FDA commissioner, ASAP
After so much talk and speculation about who will be named the next FDA commissioner, I decided to take a closer look at what Scott Gottlieb is likely to do as the nation’s drug development czar — provided he gets the nomination.
What emerges from an examination of the public record is a leading candidate who’s big on accelerated pathways for complex generics and rare diseases and ready to reorganize the agency’s review process to help speed approvals.
But while there are ways to take the extraordinary record of achievement in oncology and duplicate it in other divisions, there won’t be a wholesale deregulation that will make it possible for anyone, just about any time, to get a fast approval on an unproven therapy.
This is the kind of agenda that the FDA and biopharma can get behind. Intelligently resetting the bar with a clear outline of instructions for accelerated approvals — with the right kind of expertise in place to help that process — would be an advance. It’s no easy task. And there is a likely risk that the FDA will become too aggressive in granting quick OKs. But the overall direction is right for the agency and right for the industry.
Now let’s all hope that Gottlieb gets the tap. Some of the alternatives are truly frightening.
Compared to 2016, M&A trends look strong this year
Evaluate crunched the numbers on M&A deals last year, noting a distinct cool down from the boom. That’s not unexpected, but the near coma reflected in Q4 underscored the uncertainty over the election as well as tax reform for Big Pharma.
We probably won’t have long to wait before tax reform comes along. It’s one of President Trump’s signature issues. And after that the pent up demands for acquiring assets are likely to play out in predictable ways.
Valuations are high in biotech. Big premiums are the order of the day for the most promising drugs in the pipeline. Deals are happening. And there’s still plenty of time to see some ambitious acquisitions in the wake of the Actelion deal.
We’re anxiously awaiting the next chapter in the Jackie Fouse story
One of the reasons why biopharma has become so much stronger in recent years is that the talent pool in the US is wide and deep. Executives from the big companies have been migrating to biotech, in the executive suite as well as in finance. And Jackie Fouse, once she completes her departure plan from the president’s role at Celgene, won’t have any lack of offers as she considers her next step.
Another big company job or a jump to biotech are both possible for Fouse. Wherever she goes — and it will likely take some time — the cross-fertilization of fresh ideas and strong leadership benefits us all. Drug development is a dynamic business because of the outstanding people who are attracted to it and lead it. One person’s success is a boost to everyone. And that’s something we should all celebrate.
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