Team build­ing. Pipeline re­vamp. For­ward thrust. What does a decade of deals at Gilead tell us about Daniel O’Day’s first M&A moves?

Daniel O’Day during Roche’s annual results media conference in Basel, 2018. AP Images

Today marks the start to Daniel O’Day’s first full week as CEO of Gilead. And if the slate of new hires to the helm of large cap companies over the last 2 years helps highlight the path ahead, one of his first major acts will likely be a full pipeline review with a clean out and some new deals put into play, after he puts his top team together.

Team building is job #1, because the founders are all gone. But with biotech buyouts all the rage right now, can O’Day — a longtime Roche veteran — afford to wait out the M&A game now in full swing?

Gilead has made industry history with 2 big buyouts — the Pharmasset deal, which was incredibly successful though short lived for brilliance, and the more recent Kite acquisition in 2017. Kite vaulted Gilead to the front of the CAR-T line, but it’s brand new, with only a trickle of revenue from a leading drug and lots of questions about new and better rivals in the pipeline.

Their recent $820 million write-off related to Kite has raised alarms about more to come.

The company is seeing dwindling hep C revenue, but has a stable fortune coming in from HIV, where they continue to successfully defend the kingdom with new, easier to use therapies.

That’s not really exciting anyone, though, about a bigger, brighter future. Its big NASH drug selonsertib just flunked a Phase III, as investors are wondering who can really make a dent in that field. As for Gilead, it’s completed a slate of NASH deals, likely in search of a new cocktail that can dominate an emerging market. But that’s going to take time. And while some analysts are speculating about a blockbuster future for filgotinib, Pfizer’s safety issues with its JAK inhibitor Xeljanz has raised serious safety issues for the class.

So where does Gilead turn now?

For some insight, we turned to Chris Dokomajilar at DealForma to give us the panoramic view of Gilead’s dealmaking record over the last 10 years, which you can see in detail below.

The summary:

— 71 deals involving Gilead on either side of the deal since Jan. 2008
— 45 of these with Gilead on the buying side

These include:

— 10 acquisitions
— 23 development and commercialization in-licenses
— 4 R&D partnerships
— 2 academic partnerships
— 6 others, service deals, etc. plus its $125 million deal to buy a priority review voucher

Soon after its Kite deal, Gilead followed up with a pact to scoop up Cell Design Labs for $567 million, fitting squarely into former CEO John Milligan’s plan to remain a leader in the cell therapy field. But Gilead is not typically a blue-sky venturer, looking for lots and lots of discovery deals. The company tends to be highly focused on acquisitions and development deals, with an emphasis on commercialization.

Its R&D group under former research chief Norbert Bischofberger has a reputation for moving fast, efficiently and ruthlessly through Phase III. When they are on track, Gilead can be a very effective R&D machine. But that’s a rep that takes years to build and months to lose.

Just ask Celgene.

Seven of its 23 development and commercialization in-licensing pacts were preclinical, with 9 in the platform realm and the rest scattered from Phase I to Phase III.

We know what Gilead has done. Now it’s up to O’Day to tell us what’s next.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Hal Barron [File photo]

Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Alk­er­mes adds bipo­lar I dis­or­der to its FDA wish­list; Con­go con­firms first Ebo­la case in large city

→ An ever-ambitious Alkermes $ALKS team plans to add bipolar I disorder to its list of conditions for ALKS-3831, which it plans to pitch to the FDA in Q4. Alkermes says they were persuaded to add bipolar I disorder after a pre-NDA meeting with the agency, which came about 7 months after the biotech reported positive data for schizophrenia. The drug is a combo using olanzapine/samidorphan, which they hope will be shown to be as effective as olanzapine without the substantial increase in the risk of weight gain.

Pe­ter Kolchin­sky and Raj Shah raise a $300M fund de­vot­ed to biotech star­tups

Peter Kolchinsky and Raj Shah have another $300 million-plus to play with on the biotech venture side of their investment business. 

The two announced Monday morning that they’ve put together their first pure-play venture fund at RA Capital Management, which has been known to bet on just about every angle in healthcare investing — from rounds to follow-on investments at public companies. This new fund of theirs arrives well into a go-go era of new startup financing, with a particular focus on building new biotechs.

Boehringer buys Swiss biotech in its lat­est M&A deal, go­ing the next-gen can­cer vac­cine route

Boehringer Ingelheim has snapped up a Swiss biotech startup and added their group as a new platform for the oncology pipeline. 

The German biopharma company has bagged Geneva-based AMAL Therapeutics, paying out an unspecified upfront in a $358 million deal — cash, milestones and everything else, all in. Plus there’s 100 million euros on the line for commercial milestones.

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Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.