Pol­i­tics, pric­ing con­tro­ver­sy, tax re­form and steep val­u­a­tions con­spire to con­fuse Sanofi’s M&A strat­e­gy

Feb 7, 2007: Pres­i­dent George W. Bush and NIH Di­rec­tor Dr. Elias Zer­houni en­joy an ex­change. NIH – Screen­shot

One of the big ques­tions fac­ing the in­dus­try right now is whether or not the M&A train will get rolling in a mean­ing­ful way in 2017. It’s clear that many of the ma­jor play­ers — the ones ex­pect­ed to add bil­lions in meaty deals to the bare bones of what we’ve been see­ing — have been caught at least some­what off bal­ance by a new pres­i­dent that con­stant­ly spouts off about out­ra­geous­ly high drug costs as well as plans to re­form cor­po­rate tax­es.

That in­de­ci­sion was cap­tured per­fect­ly over the week­end by the Fi­nan­cial Times, which in­ter­viewed Sanofi R&D chief Elias Zer­houni. Sanofi has tried, and failed, to bag Medi­va­tion as well as Acte­lion, beat out by big­ger check books (Pfiz­er/Medi­va­tion) and more con­sis­tent play­ers (J&J/Acte­lion). What­ev­er hap­pens to its re­port­ed in­ter­est in Flex­ion, that deal won’t tip the M&A scales very much.

Zer­houni un­der­stands to pric­ing un­cer­tain­ty per­fect­ly.

“There is a lot of un­cer­tain­ty right now in the val­ues of all com­pa­nies be­cause of pric­ing is­sues in the US . . . in par­tic­u­lar, but world­wide,” he told the FT. “And so when you see the val­ues that are be­ing paid you ques­tion your­self as to the sus­tain­abil­i­ty of those val­ues, giv­en the un­cer­tain­ty in the pric­ing en­vi­ron­ment.”

He al­so has the lux­u­ry of count­ing on Re­gen­eron to pro­vide the in­no­va­tion the com­pa­ny has failed to pro­vide for it­self. That is ev­i­dent with the big new ap­proval for Dupix­ent and the con­tin­u­a­tion of its lon­grun­ning le­gal bat­tle with Am­gen. And so there’s some lee­way in when and what Sanofi goes af­ter next, though a num­ber of an­a­lysts and big in­vestors aren’t about to let Sanofi CEO Olivi­er Brandi­court off the hook on M&A. Says Zer­houni:

It’s not fair to say that we’re not in­ter­est­ed, but we’re al­so very dis­ci­plined. There is an in­fla­tion of prices for these as­sets and they are quite un­usu­al.

So val­u­a­tions are high, US pol­i­tics are par­tic­u­lar­ly un­cer­tain and Sanofi ex­ecs nat­u­ral­ly don’t like to sweat in pub­lic. It should be an in­ter­est­ing year, but with the di­a­betes fran­chise on the wane, mark­ing time is not a lux­u­ry that Sanofi can af­ford — what­ev­er Zer­houni says in an in­ter­view.

The M&A train at the French com­pa­ny can’t stay in the sta­tion in­def­i­nite­ly.

Biogen CEO Michel Vounatsos (via Getty Images)

With ad­u­canum­ab caught on a cliff, Bio­gen’s Michel Vounatsos bets bil­lions on an­oth­er high-risk neu­ro play

With its FDA pitch on the Alzheimer’s drug aducanumab hanging perilously close to disaster, Biogen is rolling the dice on a $3.1 billion deal that brings in commercial rights to one of the other spotlight neuro drugs in late-stage development — after it already failed its first Phase III.

The big biotech has turned to Sage Therapeutics for its latest deal, close to a year after the crushing failure of Sage-217, now dubbed zuranolone, in the MOUNTAIN study.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

Pascal Soriot (AP Images)

As­traZeneca, Ox­ford on the de­fen­sive as skep­tics dis­miss 70% av­er­age ef­fi­ca­cy for Covid-19 vac­cine

On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

Af­ter Ko­dak de­ba­cle, US lends $1.1B to a syn­thet­ic bi­ol­o­gy com­pa­ny and their big Covid-19, mR­NA plans

In mid-August, as Kodak’s $765 million government-backed push into drug manufacturing slowly fell apart in national headlines, Ginkgo Bioworks CEO Jason Kelly got a message from his company’s government liaison: HHS wanted to know if they, too, might want a loan.

The government’s decision to lend Kodak three quarters of a billion dollars raised eyebrows because Kodak had never made drugs before. But Ginkgo, while not a manufacturing company, had spent the last decade refining new ways to produce materials inside cells and building automated facilities across Boston.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

In fi­nal days at Mer­ck, Roger Perl­mut­ter bets big on a lit­tle-known Covid-19 treat­ment

Roger Perlmutter is spending his last days at Merck, well, spending.

Two weeks after snapping up the antibody-drug conjugate biotech VelosBio for $2.75 billion, Merck announced today that it had purchased OncoImmune and its experimental Covid-19 drug for $425 million. The drug, known as CD24Fc, appeared to reduce the risk of respiratory failure or death in severe Covid-19 patients by 50% in a 203-person Phase III trial, OncoImmune said in September.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

The ad­u­canum­ab co­nun­drum: The PhI­II failed a clear reg­u­la­to­ry stan­dard, but no one is cer­tain what that means any­more at the FDA

Eighteen days ago, virtually all of the outside experts on an FDA adcomm got together to mug the agency’s Billy Dunn and the Biogen team when they presented their upbeat assessment on aducanumab. But here we are, more than 2 weeks later, and the ongoing debate over that Alzheimer’s drug’s fate continues unabated.

Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

The FDA put out word today that the agency has approved its third drug, lumasiran, for primary hyperoxaluria type 1, better known as PH1. The news comes just 4 days after the European Commission took the lead in offering a green light.

An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,200+ biopharma pros reading Endpoints daily — and it's free.

Ramy Farid, Schrödinger CEO (Schrödinger)

Bris­tol My­ers fronts new Schrödinger al­liance with $55M up­front, ex­pand­ing pre­ci­sion on­col­o­gy pro­file

Bristol Myers Squibb has a new R&D partner, one to which they’re paying a pretty penny to use their discovery platform.

The pharma company is doling out $55 million upfront to Schrödinger $SDGR to work on up to five small molecules, with the potential for $2.7 billion in milestone payments. Schrödinger’s initial targets include HIF-2 alpha and SOS1/KRAS for a type of kidney cancer and KRAS-driven cancers, respectively.

FDA hands Liq­uidia and Re­vance a CRL and de­fer­ral, re­spec­tive­ly, as Covid-19 cre­ates in­spec­tion chal­lenge

Two biotechs said they got turned away by the FDA on Wednesday, in part due to pandemic-related travel restrictions.

North Carolina-based Liquidia Technologies was handed a CRL for its lead pulmonary arterial hypertension drug, citing the need for more CMC data and on-site pre-approval inspections, which the FDA hasn’t been able to conduct due to travel restrictions. The agency also deferred its decision on Revance Therapeutics’ BLA for its frown line treatment, because it needs to inspect the company’s northern California manufacturing facility. The action, Revance emphasized, was not a CRL.