Mer­ck and No­var­tis chiefs out­line what's on the M&A menu in 2017

Ken Fra­zier, Mer­ck

Every quar­ter Big Phar­ma CEOs al­most in­evitably get to an­swer at least one ques­tion from a promi­nent an­a­lyst about their next ac­qui­si­tion. This year, the ques­tions have be­come more point­ed as more of the Big 10 play­ers talk a good game, but rarely seem to de­liv­er—un­less their name is Pfiz­er.

Here’s the bot­tom line on what we found out on Tues­day: Bolt-ons are still all the rage in M&A.

Mer­ck, which has been a very cau­tious play­er since its Cu­bist buy­out, wants any­thing new on the deal ta­ble to be eas­i­ly clipped in­to the com­pa­ny’s cur­rent struc­ture. Sound fa­mil­iar?

Basel-based No­var­tis, which spent part of the morn­ing re­view­ing a dozen po­ten­tial block­buster pro­grams, is in ex­act­ly the same spot.

And Mer­ck ex­ecs are not re­al­ly too con­cerned about be­ing dis­tract­ed from Keytru­da. Though that may be be­cause that with 360 clin­i­cal tri­als for the check­point un­der­way, in­clud­ing 200 com­bo stud­ies, Keytru­da is ab­sorb­ing mas­sive amounts of at­ten­tion that would make ne­glect all but im­pos­si­ble on that front.

Mer­ck’s most re­cent deal to buy Af­fer­ent for $500 mil­lion down and $750 mil­lion in mile­stones pro­vides an ex­am­ple of what the phar­ma gi­ant is think­ing these days. It al­so likes to pick up new tech for its im­mune-on­col­o­gy group, as it proved ear­ly this year with the ac­qui­si­tion of the small UK com­pa­ny IOmet.

Here’s Ken Fra­zier, an­swer­ing a ques­tion from Tim An­der­son:

So I said that it re­mains an im­por­tant pri­or­i­ty, and you should know we’re ac­tive­ly en­gaged and look­ing for ways of aug­ment­ing our pipeline. And in so do­ing, it’s im­por­tant to re­mem­ber that we are not lim­it­ed by size or by phase. We’re go­ing to con­tin­ue to look for the best part­ner­ships and col­lab­o­ra­tions. But fun­da­men­tal­ly, we’re look­ing for bolt-on op­por­tu­ni­ties as a com­pa­ny. Your ques­tion about whether or not Keytru­da changes our ap­proach to busi­ness de­vel­op­ment; not re­al­ly. We need to aug­ment our pipeline. We con­tin­ue to be ac­tive in that area. But I would not say that the Au­gust 5 news has changed our fun­da­men­tal ap­proach to busi­ness de­vel­op­ment.

No­var­tis CEO Joe Jimenez

No­var­tis doesn’t seem pre­oc­cu­pied with M&A right now. Here’s CEO Joe Jimenez an­swer­ing the M&A ques­tion from An­drew Baum at Cit­i­group:

And then An­drew on your ques­tion on large-scale M&A. Look, we have been pret­ty clear that bolt-on strat­e­gy is re­al­ly where we are fo­cused at this point, that is…we won’t do large-scale, but it would have to be very, very at­trac­tive for No­var­tis share­hold­ers, if we did. Right now, we’re fo­cused on bolt-on and I think if you look at our pipeline, if you look at the un­der­ly­ing growth of this com­pa­ny, as soon as we get through 2017, which will be the fi­nal year of the Gleevec patent ex­pi­ra­tion in Eu­rope, the true growth rate of this com­pa­ny is go­ing to come through in 2017 – in 2018, 2019 and 2020. So to­wards the back end of 2017, 2018, 2019 and 2020 and with – that’s with­out the 12 block­busters that you just saw up there on the list. So on top of that, I think, we’re in a po­si­tion of not, you know, hav­ing to do large-scale M&A and there are some com­pa­nies in our sec­tor that will just pick from a pipeline stand­point. And so, we’re go­ing to see how things play out, but re­al­ly fo­cus on bolt-ons at this point.

Did I say megamerg­ers are out? I prob­a­bly shouldn’t have to at this stage. But count Mer­ck and No­var­tis out. Eli Lil­ly as well, though they didn’t have much to say about M&A in their call. That might be a sign of the progress they’ve had with their pipeline.

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.

Busy Gilead crew throws strug­gling biotech a life­line, with some cash up­front and hun­dreds of mil­lions in biobucks for HIV deal

Durect $DRRX got a badly needed shot in the arm Monday morning as Gilead’s busy BD team lined up access to its extended-release platform tech for HIV and hepatitis B.

Gilead, a leader in the HIV sector, is paying a modest $25 million in cash for the right to jump on the platform at Durect, which has been using its technology to come up with an extended-release version of bupivacaine. The FDA rejected that in 2014, but Durect has been working on a comeback.

In­tec blitzed by PhI­II flop as lead pro­gram fails to beat Mer­ck­'s stan­dard com­bo for Parkin­son’s

Intec Pharma’s $NTEC lead drug slammed into a brick wall Monday morning. The small-cap Israeli biotech reported that its lead program — coming off a platform designed to produce a safer, more effective oral drug for Parkinson’s — failed the Phase III at the primary endpoint.

Researchers at Intec, which has already seen its share price collapse over the past few months, says that its Accordion Pill-Carbidopa/Levodopa failed to prove superior to Sinemet in reducing daily ‘off’ time. 

Cel­gene racks up third Ote­zla ap­proval, heat­ing up talks about who Bris­tol-My­ers will sell to

Whoever is taking Otezla off Bristol-Myers Squibb’s hands will have one more revenue stream to boast.

The drug — a rising star in Celgene’s pipeline that generated global sales of $1.6 billion last year — is now OK’d to treat oral ulcers associated with Behçet’s disease, a common symptom for a rare inflammatory disorder. This marks the third FDA approval for the PDE4 inhibitor since 2014, when it was greenlighted for plaque psoriasis and psoriatic arthritis.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors.

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Apotex, though, has been a disaster ground. The manufacturer voluntarily yanked the ANDAs on 31 drugs — in late 2017 — after the FDA came across serious manufacturing deficiencies at their plants in India. A few days ago, the FDA made it official.

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