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

Ugur Sahin, BioNTech CEO (Bernd von Jutrczenka/dpa via AP Images)

BioN­Tech is spear­head­ing an mR­NA vac­cine de­vel­op­ment pro­gram for malar­ia, with a tech trans­fer planned for Africa

Flush with the success of its mRNA Covid-19 vaccine, BioNTech is now gearing up for one of the biggest challenges in vaccine development — which comes without potential profit.

The German mRNA pioneer says it plans to work on a jab for malaria, then transfer the tech to the African continent, where it will work with partners on developing the manufacturing ops needed to make this and other vaccines.

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How one start­up fore­told the neu­ro­science re­nais­sance af­ter '50 years of shit­show'

In the past couple of years, something curious has happened: Pharma and VC dollars started gushing into neuroscience research.

Biogen’s controversial new Alzheimer’s drug Aduhelm has been approved on the basis of removing amyloid plaque from the brain, but the new neuro-focused pharma and biotechs have much loftier aims. Significantly curbing or even curing the most notorious disorders would prove the Holy Grail for a complex system that has tied the world’s best drug developers in knots for decades.

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Why is On­col­o­gy Drug De­vel­op­ment Re­search Late to the Dig­i­tal Bio­mark­ers Game?

During the recent Annual ASCO Meeting, thousands of cancer researchers and clinicians from across the globe joined together virtually to present and discuss the latest findings and breakthroughs in cancer research and care. There were more than 5000+ scientific abstracts presented during this event, yet only a handful involved the use of motion-tracking wearables to collect digital measures relating to activity, sleep, mobility, functional status, and/or quality of life. Although these results were a bit disappointing, they should come as no surprise to those of us in the wearable technology field.

Bob Bradway, Amgen CEO (Scott Eisen/Bloomberg via Getty Images)

Am­gen bel­lies back up to the M&A ta­ble for an­oth­er biotech buy­out, this time with a $2.5B deal for an an­ti­body play­er fo­cused on PS­MA

Five months after Amgen CEO Bob Bradway stepped up to the M&A table and acquired Five Prime for $1.9 billion, following up with the smaller Rodeo acquisition, he’s gone back in for another biotech buyout.

This time around, Amgen is paying $900 million cash while committing up to $1.6 billion in milestones to bag the privately held Teneobio, an antibody drug developer that has expertise in developing new bispecifics and multispecifics. In addition, Amgen cited Teneobio’s “T-cell engager platform, which expands on Amgen’s existing leadership position in bispecific T-cell engagers by providing a differentiated, but complementary, approach to Amgen’s current BiTE platform.”

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J&J’s Rem­i­cade — the poster child for how to block biosim­i­lars — fi­nal­ly set­tles Pfiz­er suit

Biosimilars have proven time and again (although mostly in Europe) that competition works to bring down the cost of a once-pricey biologic, and can even expand its use.

J&J’s Remicade, however, has always proven to be an outlier.

Back in 2016, Pfizer won FDA approval for its infliximab biosimilar, known as Inflectra, but when the launch foundered, the company sued J&J, claiming that the company’s plan to block biosimilar competition worked incredibly well. Pfizer even went on to win FDA approval for a second infliximab biosimilar in 2017, known as Ixifi, but decided to never launch it.

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Art Levinson (Calico)

Google-backed Cal­i­co dou­bles down on an­ti-ag­ing R&D pact with Ab­b­Vie as part­ners ante up $1B, start to de­tail drug tar­gets

Seven years after striking up a major R&D alliance, AbbVie and Google-backed anti-aging specialist Calico are doubling down on their work with a joint, $1 billion commitment to continuing their work together. And they’re also beginning to offer some details on where this project is taking them in the clinic.

According to their statement, each of the two players is putting up $500 million more to keep the labs humming.

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UP­DAT­ED: Pan­el of neu­ro­science ex­perts lays out the com­pli­ca­tions with us­ing Bio­gen's new Alzheimer's drug

Treatment of early Alzheimer’s patients with Biogen’s new drug Aduhelm should closely resemble how the drug was studied in its pivotal clinical trials, according to new recommendations from a panel of neuroscience experts led by UNLV’s Jeffrey Cummings.

“Those considering aducanumab therapy should understand that the expected benefit is slowing of cognitive and functional decline; improvement of the current clinical state is not anticipated,” they wrote Tuesday in The Journal of Prevention of Alzheimer’s Disease, noting that some of their recommendations are more specific or more restrictive than the information provided in the FDA’s prescribing information.

Busi­ness­es and schools can man­date the use of Covid-19 vac­cines un­der EUAs, DOJ says

As public and private companies stare down the reality of the Delta variant, many are now requiring that their employees or students be vaccinated against Covid-19 prior to attending school or to returning or starting a new job. Claims that such mandates are illegal or cannot be used for vaccines under emergency use authorizations have now been dismissed.

Setting the record straight, the Department of Justice on Monday called the mandates legal in a new memo, even when used for people with vaccines that remain subject to EUAs.

No­var­tis reshuf­fles its wild cards; Tough sell for Bio­gen? Googling pro­teins; Ken Fra­zier's new gig; and more

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If you enjoy the People section in this report, you may also want to check out Peer Review, my colleagues Alex Hoffman and Kathy Wong’s comprehensive compilation of comings and goings in biopharma.

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