Biotech M&A is back. Ipsen set to fork out up to $1.3B for rare dis­ease spe­cial­ist Clemen­tia

Merg­er Mon­day is back in full swing. Along with Roche buy­ing Spark Ther­a­peu­tics $ONCE, Parisian biotech Ipsen (Eu­ronext: $IPN) is beef­ing up its rare dis­ease ar­se­nal by ac­quir­ing Cana­da’s Clemen­tia Phar­ma­ceu­ti­cals, less than two years af­ter the Mon­tre­al-based drug de­vel­op­er’s $120 mil­lion IPO.

Un­der the terms of the deal, Ipsen will pay $25 per Clemen­tia share — a rough­ly 68% pre­mi­um to its Fri­day close — for a to­tal of $1.04 bil­lion, in ad­di­tion to an­oth­er $6/share if Clemen­tia’s lead ex­per­i­men­tal drug, palo­varotene, can be used to treat a rare bone dis­ease called mul­ti­ple os­teo­chon­dro­mas (MO), which could trans­late to an­oth­er $263 mil­lion.

Clemen­tia’s shares $CM­TA sky­rock­et­ed 73.5% in pre­mar­ket trad­ing.

Palo­varotene has been re­pur­posed by Clemen­tia for a pair of rare dis­eases, af­ter Roche failed to show the retinoic acid re­cep­tor gam­ma (RARγ) se­lec­tive ag­o­nist could work against em­phy­se­ma, a form of chron­ic ob­struc­tive pul­monary dis­ease (COPD).

The Swiss drug­mak­er had plans to shelve the drug, but re­searchers un­der­scored the po­ten­tial of the class of drugs in pre­vent­ing bone for­ma­tion and fi­bro­sis (retinoic acid sig­nal­ing is be­lieved to play a role in mus­cle cell gen­er­a­tion). Clemen­tia took the drug off Roche’s shelf, for two bone dis­or­ders: fi­brodys­pla­sia os­si­f­i­cans pro­gres­si­va (FOP) and MO.

A mar­ket­ing ap­pli­ca­tion for the drug to treat episod­ic flare-ups as­so­ci­at­ed with FOP is ex­pect­ed to be sub­mit­ted to the FDA in the sec­ond half of this year — and if ap­proved the drug is set for launch mid-2020. For the FOP in­di­ca­tion, the FDA has laid out a red car­pet for the drug, with or­phan drug des­ig­na­tion, break­through ther­a­py sta­tus, fast track sta­tus and rare pe­di­atric dis­ease des­ig­na­tion, so the odds are in its fa­vor for an ac­cel­er­at­ed re­view, if the NDA is ac­cept­ed.

In an ini­ti­a­tion note pub­lished last month Baird an­a­lysts cheered the po­ten­tial of the drug: “(With) strik­ing ef­fi­ca­cy and a po­ten­tial ac­cel­er­at­ed NDA fil­ing in an ul­tra-rare con­di­tion, we have con­vic­tion that pa­lo can dom­i­nate the FOP ther­a­peu­tic land­scape.”

A Phase III study test­ing the treat­ment as a chron­ic dos­ing reg­i­men for FOP, a Phase II tri­al for MO, and a Phase I tri­al for dry eye dis­ease are al­so on­go­ing.

In a note on Mon­day, Leerink’s Joseph Schwartz said the on­go­ing phase III study test­ing palo­varotene in FOP pa­tients could fur­ther demon­strate and sup­ple­ment its ef­fi­ca­cy in the pa­tient pop­u­la­tion, es­ti­mat­ing peak sales of more than $400 mil­lion for the in­di­ca­tion by 2030.

Schwartz ex­pects in­ter­im da­ta from on­go­ing MO study in pe­di­atric pa­tients by the end of next year, and topline da­ta by 2021. On the ba­sis of a “sig­nif­i­cant­ly high­er pro­ject­ed preva­lence of MO”, he fore­cast peak sales of over $1 bil­lion by 2030.

The deal is ex­pect­ed to be con­sum­mat­ed in the sec­ond quar­ter, and will have a lim­it­ed di­lu­tive im­pact on Ipsen’s core op­er­at­ing mar­gin for 2019 and 2020, the com­pa­ny said on Mon­day.

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; 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.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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Seagen interim CEO Roger Dansey and Daiichi Sankyo CEO Sunao Manabe

Paving the way for Mer­ck­'s buy­out, Seagen los­es ar­bi­tra­tion dis­pute with Dai­ichi over ADC tech

As Seagen awaits a final buyout offer from Merck that could be in the territory of $40 billion, Seagen revealed Friday afternoon that it lost an arbitration dispute with Daiichi Sankyo relating to the companies’ 2008 collaboration around the use of antibody-drug conjugate (ADC) technology.

But that loss likely won’t matter much when it comes to Merck’s deal.

After breaking off its pact with Daiichi in mid-2015, the two companies battled over “linker” tech — a chemical bridge between an ADC’s antibody component and the cytotoxic payload — that Seagen claims Daiichi would improve upon and implement in its current generation of ADCs.

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Alessandro Maselli, Catalent CEO

Catal­ent ac­quires North Car­oli­na CD­MO for $475M, boost­ing oral solids work

As Catalent has been expanding its reach in the US this year, as well as recently completing a C-suite shuffle, the company announced last night that it has acquired the CDMO Metrics Contract Services for $475 million from Mayne Pharma Group.

The acquisition will increase Catalent’s capabilities in oral solid formulation development, manufacturing and packaging as well as expand its capacity to handle more highly potent compounds.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.