Se­ma4 sees a fu­ture where pre­ci­sion med­i­cine is the stan­dard of care, and ge­net­ic test­ing is the key to get­ting there. That’s where GeneDx comes in.

Er­ic Schadt

The Stam­ford, CT-based AI com­pa­ny is putting down up to $623 mil­lion to buy out GeneDx, a sub­sidiary of the di­ag­nos­tics com­pa­ny OP­KO Health. Af­ter the deal clos­es next quar­ter, Se­ma4 chief Er­ic Schadt and GeneDx head Kather­ine Stue­land will team up as co-CEOs, aim­ing to serve both pa­tients and phar­ma part­ners with ma­chine learn­ing and ge­nom­ic test­ing tech­nol­o­gy.

“Er­ic and I had our first cof­fee a few months ago, and it was like, every­thing was so com­pli­men­ta­ry,” Stue­land told End­points News. “I think this struc­ture en­ables Er­ic and I, we both get to work in our re­spec­tive ar­eas where we have strength.”

Kather­ine Stue­land

While Stue­land fo­cus­es on the di­ag­nos­tics busi­ness and over­all op­er­a­tional suc­cess, Schadt will turn his at­ten­tion to the over­ar­ch­ing da­ta strat­e­gy, as well as op­por­tu­ni­ties to serve health sys­tems and drug de­vel­op­ers. The plans have piqued in­ter­est from a slate of in­vestors — in­clud­ing Pfiz­er — who pitched in­to a $200 mil­lion pri­vate place­ment that will close con­cur­rent­ly with the buy­out next quar­ter.

“I think we have, as a com­pa­ny and as a cul­ture, al­ways start­ed with da­ta as a pri­ma­ry ca­pa­bil­i­ty that we want to build over time,” Se­ma4 CFO Isaac Ro said. “I think as we look at the next few years, it is high­ly like­ly that any com­pa­ny in this space is go­ing to need to have ex­cel­lent NGS lab ca­pa­bil­i­ty as a pri­ma­ry as­set.”

Se­ma4 sees a va­ri­ety of us­es for its tech plat­form, from match­ing pa­tients to the most ef­fec­tive treat­ments, to iden­ti­fy­ing and pri­or­i­tiz­ing drug tar­gets for de­vel­op­ment. In the last few years, it has worked with a suite of Big Phar­ma play­ers, in­clud­ing Sanofi, Glax­o­SmithK­line, Eli Lil­ly and J&J’s Janssen.

Mean­while, GeneDx has be­come a leader in ge­nom­ic test­ing since it was found­ed in 2000 by two NIH sci­en­tists. It’s bring­ing more than 300,000 clin­i­cal ex­omes and 2.1  mil­lion an­no­tat­ed phe­no­types to strength­en Se­ma4’s trove of da­ta.

Isaac Ro

“I think this trans­ac­tion is go­ing to ac­cel­er­ate that fam­i­ly of re­la­tion­ships while al­so open­ing the door for a num­ber of new ones,” Ro said. “And there’s no ques­tion, as Er­ic point­ed out, that rare dis­ease in par­tic­u­lar is an ex­treme­ly im­por­tant area of drug de­vel­op­ment where we to­geth­er will have a much stronger fran­chise.”

Se­ma4 is shelling out $150 mil­lion in cash plus 80 mil­lion shares up­front, and po­ten­tial­ly an­oth­er $150 mil­lion in rev­enue-based mile­stones over the next two years. Al­to­geth­er, the up­front pay­ment is worth about $473 mil­lion.

“Even to­day, just the thought of NGS test­ing is still a bit of a nov­el thing,” Ro said. “This is where you know, GeneDx is so com­pelling, be­cause they’ve re­al­ly — and I would say a lit­tle bit qui­et­ly — de­vel­oped what we think is the best-in-class so­lu­tion for that.”

GSK, newly branded and soon-to-be demerged, shared interim results from its Phase II trial on its chronic hepatitis B treatment, one that it says has the “potential to lead to a functional cure.”

At a presentation at the EASL International Liver Congress, GSK shared that in around 450 patients who received its hep B drug bepirovirsen for 24 weeks, just under 30% had hepatitis B surface antigen and viral DNA levels that were too low to detect.

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.