Se­ma4 shells out $623M to scoop up a lead­ing di­ag­nos­tics play­er and its trove of da­ta

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.”

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; 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.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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David Loew (Ipsen)

Ipsen snags an ap­proved can­cer drug in $247M M&A deal as an­oth­er bat­tered biotech sells cheap

You can add Paris-based Ipsen to the list of discount buyers patrolling the penny stock pack for a cheap M&A deal.

The French biotech, which has had plenty of its own problems to grapple with, has swooped in to buy Epizyme $EPZM for $247 million in cash and a CVR with milestones attached to it. Epizyme shareholders, who had to suffer through a painfully soft launch of their EZH2a inhibitor cancer drug Tazverik, will get $1.45 per share along with a $1 CVR tied to achieving $250 million in sales from the drug over four consecutive quarters as well as an OK for second-line follicular lymphoma by 1 Jan. 2028.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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invoX Pharma CEO Ben Toogood (L) and F-star CEO Eliot Forster

F-star bought out in $161M all-cash deal as Hong Kong's Sino Bio­pharm looks to­ward in­ter­na­tion­al ex­pan­sion

After more than a decade and a half of charting its own course, F-star Therapeutics will now settle under a new umbrella company.

The UK biotech will be acquired by invoX Pharma, a subsidiary of Hong Kong’s Sino Biopharm, in a roughly $161 million all-cash deal, the companies announced Thursday morning. F-star’s buyout will value its shares $FSTX at $7.12 apiece, nearly an 80% premium above Wednesday’s closing price.

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GSK says its drug for chron­ic hep B could ‘lead to a func­tion­al cure’ — but will it be alone or in com­bi­na­tion?

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 a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

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.

Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

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.”

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

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.