What's worth $500M-plus? The Big 6 deals of Q2 show you where the mon­ey is — and is­n't

You thought it was get­ting qui­et on the deal front? You’re right. Those big li­cens­ing deals bio­phar­ma loves to boast about were on the wane in Q2.

An­a­lysts for Cortel­lis tracked the big li­cens­ing game po­ten­tial­ly worth a half bil­lion dol­lars or more, and came up with on­ly 7 in Q2, way down from the 17 seen in Q1. Al­to­geth­er, they record­ed 967 new deals of all sizes, down 8% from the 1,050 seen in the first three months of the year.

Quite a few bio­phar­ma writ­ers love to pooh-pooh these deals, par­tic­u­lar­ly when they are weight­ed to mile­stones. And in Q2, biobucks clear­ly ruled the game. But the way the deals are struc­tured tells you a lot about where the most promi­nent drug de­vel­op­ers are mak­ing their bets and bud­get­ing hard R&D cash. Stay­ing fo­cused on de­vel­op­ment deals, I dropped Cortel­lis’ 7th pact, which high­light­ed a mar­ket­ing deal be­tween Pfiz­er and Basilea on an ap­proved drug.

(Ed­i­tor’s note: I’m adding in the Mer­ck KGaA and F-star deal from June, which ev­i­dent­ly was over­looked in this roundup.  The Ger­man Mer­ck picked up rights to a bis­pe­cif­ic check­point pro­gram and a slate of op­tions on pre­clin­i­cal pro­grams in the deal. Mer­ck KGaA is pay­ing $130 mil­lion in the first two years with an op­tion that brings the to­tal to $1 bil­lion-plus. That would rank as a close tie for third place. You can read more about it here.)

Here are the top 6, ranked by grand to­tals:

As­traZeneca and Pieris start small with $2.1B PRS-060 deal

The scoop: Pieris is charged with tak­ing their lead res­pi­ra­to­ry drug — PRS-060, an An­ti­calin against in­ter­leukin-4 re­cep­tor al­pha — in­to a Phase I asth­ma tri­al. Once they do that, they can score $12.5 mil­lion to add to the $45 mil­lion up­front they are get­ting in the pact. That’s a tiny part of this deal, which scales up to $2.1 bil­lion if every­thing works. It’s a small gam­ble on As­traZeneca’s part, if you ex­am­ine what Pieris gets to bank on.

Bot­tom line: For a Big Phar­ma play­er, As­traZeneca’s R&D group does not have a lot of hard cash to play with. So it’s no won­der they beefed up the biobucks and stuck with the small num­bers for the up­front.

Bio­gen ad­vances on tau as Bris­tol-My­ers re­treats from neu­ro­sciences

The scoop: Bio­gen gets con­trol of Bris­tol-My­ers’ BMS-986168, an an­ti-eTau com­pound in clin­i­cal de­vel­op­ment for Pro­gres­sive Supranu­clear Pal­sy, for $300 mil­lion up­front and $410 mil­lion in mile­stones. Bio­gen is al­so as­sum­ing the oblig­a­tions Bris­tol-My­ers took on when it ac­quired iP­ier­ian in 2014 for $175 mil­lion in cash and $550 mil­lion in mile­stones. To­tal deal pack­age: $1.26 bil­lion. That iP­ier­ian deal fo­cused heav­i­ly on the tau pro­gram, along with Bris­tol’s in­ter­est in pur­su­ing it as a com­bo for Alzheimer’s — which odd­ly ar­rived months af­ter Bris­tol’s de­ci­sion to re­treat from neu­ro­sciences work in 2013. But in re­cent years Bris­tol’s in­ter­est in Alzheimer’s has fad­ed, while Bio­gen has been ex­cit­ing the in­dus­try with ear­ly-stage da­ta on ad­u­canum­ab, an amy­loid ther­a­py.

Bot­tom line: Bio­gen’s new CEO is all-in on neu­ro­sciences, and he needs to do some deals to quick­ly build up the late-stage pipeline. He has the cash and the in­cli­na­tion, but good pro­grams will be hard to find. Bris­tol, mean­while, will keep its fo­cus on im­muno-on­col­o­gy, li­cens­ing out non-core pro­grams.

J&J has a Pep­tiDream, and in it they spend more than a $1B

The scoop: Here’s an­oth­er heav­i­ly back-end­ed dis­cov­ery deal, this time be­tween J&J and Tokyo-based Pep­tiDream. Worth more than a bil­lion dol­lars in to­tal, we prob­a­bly won’t hear much more about this for years, if ever. In the deal Pep­tiDream will use its plat­form tech to “iden­ti­fy macro­cyclic/con­strained pep­tides against mul­ti­ple meta­bol­ic and car­dio­vas­cu­lar tar­gets of in­ter­est se­lect­ed by Janssen, and to op­ti­mize hit pep­tides in­to ther­a­peu­tic pep­tides or small mol­e­cule prod­ucts.”

Bot­tom line: J&J was one of the few big play­ers this year to ac­tu­al­ly do some­thing big in M&A when it bagged Acte­lion for $30 bil­lion. The BD team is very se­lec­tive when it comes to spend­ing the big bucks, but they have a rep for find­ing suc­cess­ful late-stage drugs for the phar­ma gi­ant.

J&J inks an­oth­er $1B deal, but it’s most­ly mile­stones

The scoop: J&J has come in with a $50 mil­lion up­front — a siz­able amount for a pre­clin­i­cal pro­gram — and a full slate of mile­stones worth up to $940 mil­lion to gain ex­clu­sive world­wide li­cens­ing rights to Pro­tag­o­nist’s PTG-200.The IL-23 pep­tide an­tag­o­nist is be­ing built to treat Crohn’s dis­ease, one of its top in­flam­ma­to­ry bow­el dis­ease tar­gets.

Bot­tom line: An­oth­er small ante for some­thing we won’t hear about for quite some time. In Big Phar­ma, the re­al mon­ey is in play for late-stage as­sets, and most of the ex­ecs don’t like the val­u­a­tions Phase III pro­grams can fetch.

Pfiz­er demon­strates zeal for gene ther­a­py in $545M Sang­amo pact

The scoop: Pfiz­er has been a se­ri­ous play­er in gene ther­a­py of late, buy­ing in new pro­grams and lin­ing up the man­u­fac­tur­ing and more need­ed to roll out some of the ear­ly ther­a­pies ex­pect­ed to hit the mar­ket. The phar­ma gi­ant un­der­scored all that with a $70 mil­lion up­front and $475 mil­lion in mile­stones to part­ner on Sang­amo’s he­mo­phil­ia A pro­gram, which in­cludes SB-525.

Bot­tom line: Pfiz­er has been will­ing to do a bliz­zard of deals to beef up its pipeline where it wants new drugs. They’ve hit the pause but­ton on M&A for now, but their BD team stays ac­tive. They have the cash and the in­cli­na­tion.

Shire stays fo­cused on eye dis­eases with $535M Par­i­on pact

The scoop: Lex­ing­ton, MA-based Shire agreed to pay Par­i­on $40 mil­lion in an up­front and near-term cash to get its hands on world­wide rights to a Phase II dry eye dis­ease drug. Hun­dreds of mil­lions more are on the ta­ble in promised mile­stones, bring­ing the po­ten­tial deal val­ue up to $535 mil­lion. Shire has been drawn to the biotech’s work on ENaC — ep­ithe­lial sodi­um chan­nel — in­hibitor mol­e­cules. In this case P-321 is de­signed to amp up tear vol­ume on the eye sur­face, and in­ves­ti­ga­tors have some pre­lim­i­nary ef­fi­ca­cy da­ta from a Phase I/II safe­ty study that in­di­cates they may be on to some­thing.

Bot­tom line: It’s ear­ly days on this drug, but Shire CEO Flem­ming Orn­skov has a stub­born in­ter­est in build­ing an eye drug fran­chise, and he’s still will­ing to in­vest mod­er­ate amounts to bring in new drugs. Again, though, we’re see­ing a deal heav­i­ly tilt­ed to biobucks, de-risk­ing the ef­fort.


Im­age: Shut­ter­stock

John Hood [file photo]

UP­DATE: Cel­gene and the sci­en­tist who cham­pi­oned fe­dra­tinib's rise from Sanofi's R&D grave­yard win FDA OK

Six years after Sanofi gave it up for dead, the FDA has approved the myelofibrosis drug fedratinib, now owned by Celgene.

The drug will be sold as Inrebic, and will soon land in the portfolio at Bristol-Myers Squibb, which is finalizing a deal to acquire Celgene.

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UP­DAT­ED: AveX­is sci­en­tif­ic founder was axed — and No­var­tis names a new CSO in wake of an ethics scan­dal

Now at the center of a storm of controversy over its decision to keep its knowledge of manipulated data hidden from regulators during an FDA review, Novartis CEO Vas Narasimhan has found a longtime veteran in the ranks to head the scientific work underway at AveXis, where the incident occurred. And the scientific founder has hit the exit.

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Ab­b­Vie gets its FDA OK for JAK in­hibitor upadac­i­tinib, but don’t look for this one to hit ex­ecs’ lofty ex­pec­ta­tions

Another big drug approval came through on Friday afternoon as the FDA OK’d AbbVie’s upadacitinib — an oral JAK1 inhibitor that is hitting the rheumatoid arthritis market with a black box warning of serious malignancies, infections and thrombosis reflecting fears associated with the class.

It will be sold as Rinvoq — at a wholesale price of $59,000 a year — and will likely soon face competition from a drug that AbbVie once controlled, and spurned. Reuters reports that a 4-week supply of Humira, by comparison, is $5,174, adding up to about $67,000 a year.

The top 10 fran­chise drugs in bio­phar­ma his­to­ry will earn a to­tal of $1.4T (tril­lion) by 2024 — what does that tell us?

Just in case you were looking for more evidence of just how important Amgen’s patent win on Enbrel is for the company and its investors, EvaluatePharma has come up with a forward-looking consensus estimate on what the list of top 10 drugs will look like in 2024.

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UP­DAT­ED: Sci­en­tist-CEO ac­cused of im­prop­er­ly us­ing con­fi­den­tial in­fo from uni­corn Alec­tor

The executive team at Alector $ALEC has a bone to pick with scientific co-founder Asa Abeliovich. Their latest quarterly rundown has this brief note buried inside:

On June 18, 2019, we initiated a confidential arbitration proceeding against Dr. Asa Abeliovich, our former consulting co-founder, related to alleged breaches of his consulting agreement and the improper use of our confidential information that he learned during the course of rendering services to us as our consulting Chief Scientific Officer/Chief Innovation Officer. We are in the early stage of this arbitration proceeding and are unable to assess or provide any assurances regarding its possible outcome.

There’s no explicit word in the filing on what kind of confidential info was involved, but the proceeding got started 2 days ahead of Abeliovich’s IPO.

Abeliovich, formerly a tenured associate professor at Columbia, is a top scientist in the field of neurodegeneration, which is where Alector is targeted. More recently, he’s also helped start up Prevail Therapeutics as the CEO, which raised $125 million in an IPO. And there he’s planning on working on new gene therapies that target genetically defined subpopulations of Parkinson’s disease. Followup programs target Gaucher disease, frontotemporal dementia and synucleinopathies.

But this time Abeliovich is the CEO rather than a founding scientist. And some of their pipeline overlaps with Alector’s.

Abeliovich and Prevail, though, aren’t taking this one lying down.

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Chi­na has be­come a CEO-lev­el pri­or­i­ty for multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies: the trend and the im­pli­ca­tions

After a “hot” period of rapid growth between 2009 and 2012, and a relatively “cooler” period of slower growth from 2013 to 2015, China has once again become a top-of-mind priority for the CEOs of most large, multinational pharmaceutical companies.

At the International Pharma Forum, hosted in March in Beijing by the R&D Based Pharmaceutical Association Committee (RDPAC) and the Pharmaceutical Research and Manufacturers of America (PhRMA), no fewer than seven CEOs of major multinational pharmaceutical firms participated, including GSK, Eli Lilly, LEO Pharma, Merck KGaA, Pfizer, Sanofi and UCB. A few days earlier, the CEOs of several other large multinationals attended the China Development Forum, an annual business forum hosted by the research arm of China’s State Council. It’s hard to imagine any other country, except the US, having such drawing power at CEO level.

As dis­as­ter struck, Ab­b­Vie’s Rick Gon­za­lez swooped in on Al­ler­gan with an of­fer Brent Saun­ders couldn’t say no to

Early March was a no good, awful, terrible time for Allergan CEO Brent Saunders. His big lead drug had imploded in a Phase III disaster and activists were after his hide — or at least his chairman’s title — as the stock price continued a steady droop that had eviscerated share value for investors.

But it was a perfect time for AbbVie CEO Rick Gonzalez to pick up the phone and ask Saunders if he’d like to consider a “strategic” deal.

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As­traZeneca's jug­ger­naut PARP play­er Lyn­parza scoops up an­oth­er dom­i­nant win in PhI­II as the FDA adds a 'break­through' for Calquence

AstraZeneca’s oncology R&D group under José Baselga keeps churning out hits.

Wednesday morning the pharma giant and their partners at Merck parted the curtains on a successful readout for their Phase III PAOLA-1 study, demonstrating statistically significant improvement in progression-free survival for women with ovarian cancer in a first-line maintenance setting who added their PARP Lynparza to Avastin. This is their second late-stage success in ovarian cancer, which will help stave off rivals like GSK.

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ICER blasts FDA, PTC and Sarep­ta for high prices on DMD drugs Em­flaza, Ex­ondys 51

ICER has some strong words for PTC, Sarepta and the FDA as the US drug price watchdog concludes that as currently priced, their respective new treatments for Duchenne muscular dystrophy are decidedly not cost-effective.

The final report — which cements the conclusions of a draft issued in May — incorporates the opinion of a panel of 17 experts ICER convened in a public meeting last month. It also based its analysis of Emflaza (deflazacort) and Exondys 51 (eteplirsen) on updated annual costs of $81,400 and over $1 million, respectively, after citing “incorrect” lower numbers in the initial calculations.