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

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

UP­DAT­ED: Es­ti­mat­ing a US price tag of $5K per course, remde­sivir is set to make bil­lions for Gilead, says key an­a­lyst

Data on remdesivir — the first drug shown to benefit Covid-19 patients in a randomized, controlled trial setting — may be murky, but its maker Gilead could reap billions from the sales of the failed Ebola therapy, according to an estimate by a prominent Wall Street analyst. However, the forecast, which is based on a $5,000-per-course US price tag, triggered the ire of one top drug price expert.