So what’s hold­ing back Pfiz­er and Gilead from the re­al­ly big M&A deals we’ve all been wait­ing for?

Ja­mi Ru­bin, Gold­man Sachs

Ja­mi Ru­bin at Gold­man Sachs doesn’t mess around. So when her turn came to ask Pfiz­er CEO Ian Read a ques­tion dur­ing the Q1 call with an­a­lysts, she was her typ­i­cal­ly blunt self.

Ru­bin: You and the se­nior man­age­ment team have for some time now been sig­nal­ing a de­sire to go big­ger, do­ing a larg­er-scale trans­ac­tion, and I’m just cu­ri­ous to know what’s hold­ing you back. It’s now May 2, not that I’m im­pa­tient, but is it cor­po­rate tax re­form? Is it some­thing else? Can you re­mind us what you’re look­ing for ex­act­ly, and what are the trig­ger points for mak­ing you de­cide to pull the trig­ger?

Ian Read, Pfiz­er CEO

Read: From a macro stand­point, Ja­mi, I be­lieve the in­dus­try will con­tin­ue to con­sol­i­date over time. I be­lieve there is sim­ply too much re­dun­dan­cy and frag­men­ta­tion, both glob­al­ly and in the U.S., for the sec­tor to con­tin­u­al­ly ef­fi­cient­ly de­liv­er med­i­cines to so­ci­ety. Pfiz­er has been, and I ex­pect will con­tin­ue to be, ac­tive in­dus­try con­sol­ida­tors. How­ev­er, there is a lack of clar­i­ty on po­ten­tial tax re­form, health­care poli­cies of the U.S., and un­cer­tain­ties in the Eu­ro­pean mar­kets both with the French elec­tion and the U.K. snap elec­tion. And on top of that, cer­tain large com­pa­nies have sig­nif­i­cant, al­most bi­na­ry, risks em­bed­ded with­in their busi­ness and pipelines, which could mean­ing­ful­ly al­ter their val­ues.

So we re­main pru­dent in our eval­u­a­tion process re­gard­less of tar­get size. We will con­tin­ue to eval­u­ate deals. We nev­er say nev­er, but I be­lieve the cur­rent en­vi­ron­ment needs to sta­bi­lize in or­der to be an ad­van­ta­geous mar­ket for big deals.

It prob­a­bly didn’t help that Pfiz­er had to start out its call ex­plain­ing that its last big ac­qui­si­tion, the $14 bil­lion Medi­va­tion buy­out, net­ted a prod­uct — Xtan­di — that is ex­pe­ri­enc­ing de­clin­ing sales. That’s not what Pfiz­er, or its in­vestors, had fig­ured on when Read de­ployed the biggest M&A check­ing ac­count in the in­dus­try.

Then last night it was John Mil­li­gan’s turn to talk about Gilead, which has been ad­vised and scold­ed for not putting its big re­serves to work as its hep C for­tunes con­tin­ue to slide at a dra­mat­ic pace.

That talk about tax re­form? Mil­li­gan isn’t lis­ten­ing.

John Mil­li­gan, Gilead CEO

Mil­li­gan: So first of all, with re­gard to Wash­ing­ton, I think that un­cer­tain­ty in Wash­ing­ton seems to be the norm in my 27 years here. So I think we’ve kind of learned to fil­ter that out and fo­cus on the things that are right for the com­pa­ny. There may be tax re­form. There may be repa­tri­a­tion, but you can’t count on it and you can’t wait for it ei­ther.

So we’ve fo­cused our ef­forts — I’ll turn to what you asked last, which is we re­al­ly fo­cused our ef­forts on broad­en­ing our team, adding some depth both sci­en­tif­i­cal­ly and with busi­ness de­vel­op­ment ex­pe­ri­ence so that we in fact have much, much greater ca­pac­i­ty to as­sess things and are in fact ful­ly en­gaged with our teams as­sess­ing a num­ber of dif­fer­ent op­por­tu­ni­ties, which we think could play out over the com­ing year as we start to make progress in get­ting part­ner­ships and po­ten­tial ac­qui­si­tions to­geth­er. So we’re go­ing to just fo­cus on what’s right for Gilead, try to ig­nore the noise glob­al­ly on terms of tax re­form, and do the best thing for the com­pa­ny and for the share­hold­ers in the long term. And we re­al­ly have a great team right now.

Mil­li­gan went on to pro­vide some in­sights in­to what it’s af­ter.

Mil­li­gan: With re­gard to fu­ture legs of stool, I think it’s pret­ty clear we’re look­ing for an­oth­er av­enue to in­crease our op­por­tu­ni­ty for rev­enue, and al­so for help­ing pa­tients with the con­sid­er­able heft that we have, and it’s clear we’ve been fo­cus­ing on on­col­o­gy, where the ques­tion is there in the area, where we can use our re­sources to ac­cel­er­ate prod­ucts to mar­ket and build a mean­ing­ful fran­chise in on­col­o­gy. And that was the hir­ing of Alessan­dro Ri­va; that was the for­ay we made with our busi­ness de­vel­op­ment peo­ple to broad­en and then to look at oth­er things that can build this.

And so I feel very good that we’ve got a num­ber of dif­fer­ent ways to ac­cel­er­ate growth for the com­pa­ny in­to the fu­ture so that a decade from now we’re a very dif­fer­ent com­pa­ny, hav­ing rein­vent­ed our­selves be­yond an­tivi­rals in­to a re­al­ly mul­ti-ther­a­peu­tic area com­pa­ny.

So there you have it. Two big com­pa­nies with plen­ty of fi­nan­cial fire­pow­er and a de­sire to do some­thing im­pres­sive — when the time is ripe. Pfiz­er’s Read is known as the last big megamerg­er play­er while Gilead ac­tu­al­ly turned its ac­qui­si­tion of Phar­mas­set in­to a block­buster — al­though a block­buster that’s cur­ing pa­tients faster than they can di­ag­nose new cas­es.

Every­thing is on the ta­ble right now, from Bris­tol-My­ers Squibb to the lat­est up­start biotech with new tech. But what­ev­er the rea­son, sev­er­al of the big play­ers are still not re­al­ly in the game. And Roche, Sanofi and oth­ers are clear­ly turned off by high val­u­a­tions. It’s a sell­er’s mar­ket right now, and deals aren’t as eas­i­ly come by as every­one ex­pect­ed so far this year.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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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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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.