Ulf Mark Schneider (AP)

The cen­tral fig­ure in Nestlé's $2.6B Aim­mune buy­out? Covid-19

Nestlé sur­prised few this sum­mer when they spent $2.6 bil­lion to buy­out Aim­mune. The Swiss But­terfin­gers-and-health con­glom­er­ate had long shown more in­ter­est in them and Pal­forzia, their re­cent­ly ap­proved peanut al­ler­gy treat­ment, than any of the tra­di­tion­al Big Phar­mas.

When talks be­gan, though, in the sec­ond quar­ter, Aim­mune was on­ly look­ing for a part­ner to help them com­mer­cial­ize the ther­a­py in Eu­rope. In fact, as part of its se­ries of in­vest­ments in the com­pa­ny, Nestlé had signed a “Stand­still Agree­ment,” that would pre­vent them from ac­quir­ing the biotech un­til No­vem­ber 202o.

That, though, was be­fore Covid-19 struck the US, shut­ting down much of the coun­try, re­shap­ing the med­ical sys­tem, and set­ting Aim­mune’s plans for a large com­mer­cial roll­out ablaze. The SEC’s in­sid­er ac­count of ne­go­ti­a­tions doesn’t di­rect­ly link the buy­out to the pan­dem­ic and its toll on Pal­forzia’s launch. But it does note the size of the of­fer com­pared to Aim­mune’s new­ly de­pressed stock price, grim worst-case sce­nario pro­jec­tions from man­age­ment at the height of ne­go­ti­a­tions, and the role the “po­ten­tial ef­fects of COVID-19 on Aim­mune’s busi­ness and the long-range plans of Aim­mune” played as the two sides tum­bled to­wards a deal that like­ly would have been re­ject­ed just 6 months pri­or.

By the time ne­go­ti­a­tions be­gan, Nestlé al­ready owned 25.6% of the Cal­i­for­nia biotech. They had first in­vest­ed in 2016 and 2018 and put an­oth­er $200 mil­lion in on Feb­ru­ary 4, buy­ing up shares for $31.97 five days af­ter Pal­forzia won ap­proval. The mon­ey was sup­posed to fi­nance Pal­foriza’s com­mer­cial de­but. Aim­mune had just hired a team of ex­pe­ri­enced 80 ac­count man­agers and laid out plans for ex­ten­sive ed­u­ca­tion plans, with pre­sen­ta­tions and work­shops for hun­dreds of physi­cians and al­ler­gists across the coun­try.

“Aim­mune man­age­ment demon­strat­ed that they have done their home­work on the launch strat­e­gy for Pal­forzia,” Baird an­a­lyst Bri­an Sko­r­ney, an Aim­mune bull, said in a note on Feb­ru­ary 3, “and we ex­pect their ex­ten­sive mar­ket re­search and plan­ning should in­crease the odds of com­mer­cial suc­cess.” He added on Feb­ru­ary 5 that the Nestlé in­vest­ment should be “more than enough to fund the launch of Pal­forzia.”

But on May 11, in their Q1 call, the com­pa­ny an­nounced Covid-19 had ground­ed com­mer­cial­iza­tion to a halt. Shares, mean­while, tum­bled to $11.48 in the Feb­ru­ary stock crash and nev­er re­cov­ered.

At the same time, Aim­mune was look­ing for a part­ner to com­mer­cial­ize in Eu­rope, where they were ex­pect­ing ap­proval by year’s end. Nestlé emerged as one of sev­er­al in­ter­est­ed par­ties.

Paul Bul­cke

Then in Ju­ly, the Nestlé board of di­rec­tors, re­view­ing the part­ner­ship, be­gan con­sid­er­ing a larg­er trans­ac­tion. They di­rect­ed chair­man Paul Bul­cke and CEO Ulf Mark Schnei­der to re­view an un­spec­i­fied rec­om­men­da­tion from the board. Three days lat­er, on a tele­con­fer­ence with Aim­mune’s di­rec­tors, the two ex­ec­u­tives raised the prospect of a buy­out, float­ing a price per share of $30 — which was $6 less than the com­pa­ny’s Jan­u­ary mar­ket peak.

The di­rec­tors passed it on­to man­age­ment in a meet­ing on Ju­ly 13. In ad­di­tion to the usu­al M&A dis­cus­sions, the Aim­mune team was faced with the ques­tion of whether the of­fer jus­ti­fied wav­ing the stand­still agree­ment that pre­clud­ed Nestlé from buy­ing the com­pa­ny. It did not.

Nestlé came back a week lat­er with an of­fer of $32.50, rough­ly dou­ble the stock price — not enough, Aim­mune di­rec­tors de­ter­mined, for a full waiv­er of the agree­ment but enough for a par­tial waiv­er that would al­low the Aim­mune team to give a half-day pre­sen­ta­tion and ex­plain fur­ther their Pal­forzia plans.

Greg Be­har

Af­ter a phone call be­tween Aim­mune chair­man Mark Mc­Dade and Nestlé Health CEO Greg Be­har, the two sides signed a con­fi­den­tial­i­ty pact. (Be­har, though a mem­ber of Aim­mune’s board through Nestlé’s pri­or in­vest­ments, did not take part in Aim­mune’s di­rec­tor dis­cus­sions).

Aim­mune gave the pre­sen­ta­tion and then, while they wait­ed to hear back from Nestlé, di­rec­tors and man­age­ment met on Au­gust 4 to iden­ti­fy ad­di­tion­al par­ties that could have in­ter­est at the pre­mi­um Nestlé was of­fer­ing. They al­so dis­cussed the toll Covid-19 was tak­ing on the com­pa­ny. Their Q2 earn­ings, an­nounced the same day as the Nestlé pre­sen­ta­tion, had shown ze­ro Pal­forzia sales. At the meet­ing, mean­while, man­age­ment gave new pre­sen­ta­tions. In a best-case sce­nario, sales would go back on track and they would sur­pass the $1.2 bil­lion in rev­enue by 2024 an­a­lysts had pro­ject­ed for Pal­forzia. But in a worst-case, rev­enue would be cut in half all the way through 2025.

Nes­tle re­turned with an of­fer of $34.00 to con­tin­ue dis­cus­sions. Aim­mune’s reps reached out to five dif­fer­ent com­pa­nies about a buy­out, four by email and one by phone. Over the next two weeks, all five said they had no in­ter­ests.

Over the next two weeks, Aim­mune would agree to par­tial­ly waive the stand­still and en­ter late-stage talks on a $34.00 ba­sis.

Mark Mc­Dade

Then on Au­gust 24, Nestlé said they had fur­ther con­cerns. Their re­view had turned up hard ques­tions over the cost of de­vel­op­ing the rest of Aim­mune’s pipeline, which in­cludes Pal­forzia-like treat­ments for egg and tree nut al­ler­gies and a Xen­cor-li­censed an­ti­body for food al­ler­gies, and they were wor­ried about the net rev­enue from Pal­foriza sales. Still, they said, they were will­ing to dis­cuss a deal at $34. “There were val­u­a­tion con­cerns,”

Aim­mune re­it­er­at­ed they were worth more, press­ing for $35 and told Mc­Dade to call back Be­har to say the board “were not in con­sen­sus as to the ad­vis­abil­i­ty of a po­ten­tial trans­ac­tion” at $34. The stock, mean­while, had fall­en to less than $13.

Nesté told Aim­mune the next morn­ing they were prepar­ing an of­fer for $34.50. Af­ter a “ro­bust” de­bate lat­er that same morn­ing, the di­rec­tors agreed to take it if it came. The of­fer came in writ­ing that night. They signed the deal and waived the stand­still. A press re­lease fol­lowed on the 31st.

Susan Galbraith, AstraZeneca EVP, oncology R&D, at EUBIO22 (Rachel Kiki for Endpoints News)

Up­dat­ed: As­traZeneca jumps deep­er in­to cell ther­a­py 2.0 space with $320M biotech M&A

Right from the start, the execs at Neogene had some lofty goals in mind when they decided to try their hand at a cell therapy that could tackle solid tumors.

Its founders have helped hone a new approach that would pack in multiple neoantigen targets to create a personalized TCR treatment that would not just make the leap from blood to solid tumors, but do it with durability. And they managed to make their way rapidly to the clinic, unveiling their first Phase I program for advanced tumors just last May.

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Ei­sai’s ex­pand­ed Alzheimer’s da­ta leave open ques­tions about safe­ty and clin­i­cal ben­e­fit

Researchers still have key questions about Eisai’s investigational Alzheimer’s drug lecanemab following the publication of more Phase III data in the New England Journal of Medicine Tuesday night.

In the paper, which was released in conjunction with presentations at an Alzheimer’s conference, trial investigators write that a definition of clinical meaningfulness “has not been established.” And the relative lack of new information, following topline data unveiled in September, left experts asking for more — setting up a potential showdown to precisely define how big a difference the drug makes in patients’ lives.

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Illustration: Assistant Editor Kathy Wong for Endpoints News

Twit­ter dis­ar­ray con­tin­ues as phar­ma ad­ver­tis­ers ex­tend paus­es and look around for op­tions, but keep tweet­ing

Pharma advertisers on Twitter are done — at least for now. Ad spending among the previous top spenders flattened even further last week, according to the latest data from ad tracker Pathmatics, amid ongoing turmoil after billionaire boss Elon Musk’s takeover now one month ago.

Among 18 top advertisers tracked for Endpoints News, only two are spending: GSK and Bayer. GSK spending for the full week through Sunday was minimal at just under $1,900. Meanwhile, German drugmaker Bayer remains the industry outlier upping its spending to $499,000 last week from $480,000 the previous week. Bayer’s spending also marks a big increase from a month ago and before the Musk takeover, when it spent $16,000 per week.

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Vi­a­tris with­draws ac­cel­er­at­ed ap­proval for top­i­cal an­timi­cro­bial 24 years lat­er

After 24 years without confirming clinical benefit, the FDA announced Tuesday morning that Viatris (formed via Mylan and Pfizer’s Upjohn) has decided to withdraw a topical antimicrobial agent, Sulfamylon (mafenide acetate), after the company said conducting a confirmatory study was not feasible.

Sulfamylon first won FDA’s accelerated nod in 1998 as a topical burn treatment, with the FDA noting that last December, Mylan told the agency that it wasn’t running the trial.

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iECURE CEO Joe Truitt and founder Jim Wilson

Jim Wil­son biotech iECURE gets fresh $65M to push pe­di­atric liv­er dis­ease gene ther­a­py in­to the clin­ic

Jim Wilson-founded biotech iECURE has wrapped a $65M Series A extension round to get its lead candidate — a gene replacement therapy for a rare inherited liver disease known as ornithine transcarbamylase deficiency, or OTC — into the clinic.

This round was co-led by Novo Holdings and LYFE Capital, followed by initial investors Versant and OrbiMed as well. In September 2021, iECURE raised a $50 million Series A led by the latter two. The new cash infusion will get iECURE through an initial in-human trial, which CEO Joe Truitt told Endpoints News iECURE hopes to read out in 2024.

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Tim Walbert, Horizon Therapeutics CEO (via YouTube)

Hori­zon Ther­a­peu­tics in takeover talks with Am­gen, J&J, Sanofi as po­ten­tial buy­ers

Amgen, J&J’s Janssen and Sanofi are all in talks to acquire Horizon Therapeutics, the rare disease biotech disclosed late Tuesday.

Horizon confirmed “highly preliminary discussions” with those companies regarding a potential buyout offer after the Wall Street Journal reported takeover interest.

Although the company — which commands a market cap of close to $18 billion — emphasized that “there can be no certainty that any offer will be made for the Company,” shares $HZNP still surged 31% in after-hours trading to near $103, bringing it to the point where it started the year.

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John Carroll with David Chang, Allogene CEO (Credit: Jeff Rumans Photography)

Al­lo­gene takes the stage in New York to go deep on its off-the-shelf cell ther­a­pies — de­clar­ing a first for sol­id tu­mors

NEW YORK — In most cases, a biotech like Allogene would wait until the next big science conference to offer its latest series of snapshots of its data. But most biotechs aren’t like Allogene, where the veteran leaders from Kite garnered a substantial number of kudos over the years for their in-depth reviews of the company’s progress.

So on Tuesday, the leaders at Allogene converged on Manhattan once again to give a detailed breakdown of their latest steps forward, looking to stay out front in the busy off-the-shelf cell therapy arena, keep a clean bill of health on the safety front and prove that they can not only match the autologous pioneers they helped create but make the all-important leap into solid tumors. It’s another step forward in a journey that has a long way to go before even the first big regulatory finish lines appear on the track. But for CEO David Chang, who spent some time with me running through the data ahead of the Tuesday session, it all amounts to forward momentum toward the desired goal.

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UK reg­u­la­tor warns of se­vere eye re­ac­tions fol­low­ing use of Sanofi and Re­gen­eron's Dupix­ent

The UK’s Medicines and Healthcare Regulatory Agency (MHRA) on Tuesday warned of some new and serious eye-related side effects following the use of Sanofi and Regeneron’s atopic dermatitis and asthma treatment Dupixent (dupilumab).

While Dupixent is already associated with cases of conjunctivitis and allergic conjunctivitis, dry eye and with infrequent cases of keratitis and ulcerative keratitis, the MHRA is calling on health professionals to be on the lookout for any of these eye-related side effects as “it is not currently possible to predict who may experience the rarer and most severe ocular adverse reactions, such as ulcerative keratitis.”

Bris­tol My­ers scraps gene ther­a­py deal with uniQure for car­dio­vas­cu­lar dis­eases

Bristol Myers Squibb is hitting the exit on a collaboration with a gene therapy biotech.

The Big Pharma company will no longer partner with uniQure on finding new treatments for cardiovascular diseases, the biotech reported to the SEC last week, following a rocky relationship that saw the pair break off an earlier agreement — before coming back to the table. The deal will officially terminate on Feb. 21, 2023.

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