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

Albert Bourla appears before the Senate Committee on Finance for a hearing on prescription drug pricing on Capitol Hill in Washington, DC, February 26, 2019. Chris Kleponis for CNP via AP Images

UP­DAT­ED: Pfiz­er CEO Al­bert Bourla is back in the M&A game, but why is he pay­ing $11.4B for Ar­ray?

Pfiz­er $PFE has cut short its time on the side­lines of bio­phar­ma M&A.

Mon­day morn­ing the phar­ma gi­ant un­veiled an $11.4 bil­lion deal to ac­quire Ar­ray Bio­Phar­ma, beef­ing up its on­col­o­gy work and adding a new re­search hub in Boul­der, Col­orado to its glob­al op­er­a­tions.

At $48 a share, Ar­ray $AR­RY in­vestors will be get­ting a 62% pre­mi­um off the Fri­day close of $29.59.

Pfiz­er, which has strug­gled to gain all the up­side promised in past buy­outs like Medi­va­tion, high­light­ed the ac­qui­si­tion of 2 ap­proved drugs in the deal — Braftovi (en­co­rafenib) and Mek­tovi (binime­tinib).

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Gene ther­a­py R&D deals turn red hot as Big Phar­ma steps up to play

This September will mark the 20th anniversary of the death of Jesse Gelsinger, a young man suffering from X-linked genetic disease of the liver. He was killed in a gene therapy study conducted by Penn’s James Wilson, and the entire field endured a lengthy deep freeze as the field grappled with the safety issues inherent in the work.

Some thought gene therapy R&D would never survive. But it did. And this year marked a landmark approval for Zolgensma, a new gene therapy for spinal muscular atrophy Novartis priced at $2.1 million.

“Gene therapy is the hottest item on the block now. But there was a time when we first got into this trial, where there wasn’t a person in the world who believed that gene therapy would work. We have to remember that,” noted gene therapy investigator Jerry Mendell told SMA News Today.

We’re still right on the pioneering frontier when it comes to getting approvals for gene therapies and launching marketing campaigns with the European green light for bluebird's leading program last Friday underscoring the nascent nature of the field. But gene therapy R&D is booming, and has been for several years now.

The rapid growth of gene therapy clinical development is well known, but we decided to put some numbers on it, to quantify what’s going on. DealForma chief Chris Dokomajilar took a lot over the past 10 years, as the number of deals, R&D partnerships and buyouts steadily gained steam, spiking last year and on track to maintain the surge in 2019.

The upfronts and totals for the dollars on deals so far in 2019 is already close to the 2018 mark, underscoring a new phase of negotiations as the major players step up to gain a piece of the late-stage and commercial action.

Once again, we’re looking at an “overnight” biotech success story, decades in the making.

At some point, that may start to brake the numbers we’re seeing. But for now, as rivals line up to compete for frontline prominence across a range of diseases, the arrows are all pointed north.

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A uni­corn stalks Wall Street in search of IPO cash; CASI Phar­ma in-li­cens­es CD19 ther­a­py from Chi­na’s Ju­ven­tas

→ A herd of up­start biotechs will look to Wall Street for some ma­jor wind­falls this week as a burst of new of­fer­ings con­tin­ues to feed cash in­to the R&D sys­tem. To­day we learned that Bridge­Bio will look to raise in the neigh­bor­hood of $225 mil­lion by of­fer­ing 15 mil­lion shares for $14 to $16 each. And they have a string of joint bookrun­ners: J.P. Mor­gan, Gold­man Sachs, Jef­feries, SVB Leerink, KKR, Piper Jaf­fray, Mizuho Se­cu­ri­ties, BMO Cap­i­tal Mar­kets and Ray­mond James. If suc­cess­ful, Bridge­Bio will emerge with a mar­ket cap of around $1.7 bil­lion. There are 5 biotechs look­ing to IPO this week, in­clud­ing Akero and Pre­vail.

UP­DAT­ED: Sanofi Gen­zyme deserts gene ther­a­py de­vel­op­er Voy­ager Ther­a­peu­tics

While gene ther­a­py com­pa­nies re­joice as the sec­tor gains trac­tion with ap­provals and a flur­ry of M&A ac­tiv­i­ty, one play­er is feel­ing the heat.

Back in 2015, Voy­ager Ther­a­peu­tics joined forces with Sanofi Gen­zyme in a deal worth up to $845 mil­lion ($100 mil­lion up­front + a po­ten­tial $745 mil­lion in mile­stones) to co-de­vel­op gene ther­a­pies for se­vere cen­tral ner­vous sys­tem dis­or­ders. But two years lat­er, the French drug­mak­er re­treat­ed, elect­ing to not pick up the op­tion to work on Voy­ager’s Parkin­son’s dis­ease pro­gram. (Last year, the FDA dis­ap­point­ed Voy­ager, telling the com­pa­ny that it was not open to an ac­cel­er­at­ed fil­ing on the Parkin­son’s drug on the ba­sis of Phase II da­ta — in­stead of re­quir­ing an ad­di­tion­al piv­otal study.)

In­vestors fret as VBI's hep B vac­cine fails key sec­ondary PhI­II study goal

Sobered by mount­ing costs, Dy­navax $DVAX last month made the de­ci­sion to fo­cus all its re­sources on its 2017-ap­proved he­pati­tis B vac­cine Hep­lisav-B, which ri­vals and su­per­sedes the ef­fi­ca­cy and con­ve­nience pro­file of GSK’s $GSK es­tab­lished En­ger­ix-B. The Cal­i­for­nia-based com­pa­ny will be on the look­out for an­oth­er com­peti­tor — VBI Vac­cines, which on Mon­day un­veiled late-stage da­ta on its hep B vac­cine: Sci-B-Vac.

John Oyler, Founder & CEO of BeiGene, at the US-China Biopharma Innovation and Investment Summit in Shanghai on October 23, 2018; Credit: Endpoints News, PharmCube

UP­DAT­ED: As Bris­tol-My­ers/Cel­gene tie up loose ends, BeiGene pock­ets $150M from PD-1 breakup

As soon as Bristol-Myers Squibb announced its $74 billion buyout for Celgene, BeiGene emerged as a prominent example of a player whose pact with the big biotech could sour, as its PD-1 candidate seems to overlap with Opdivo. After six months of suspense, the partners say they are finally bringing the 2-year-old deal to an amicable end.

BeiGene $BGNE gets $150 million for the termination in addition to full global rights to tislelizumab. In 2017 Celgene had paid $263 million in upfront license fees to develop the PD-1 inhibitor for solid cancers in the US, Europe, Japan and the rest of the world outside Asia. It also threw in a $150 million equity investment in exchange for BeiGene handling its commercial operations — think Abraxane, Revlimid and Vidaza — in China.

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Exterior of the 1 million square foot Discovery Labs in Upper Merion, PA (PR Newswire)

Philadel­phia cham­pi­ons life sci­ences 'co-work­ing,' re­viv­ing for­mer GSK cam­pus in $500M makeover

In a boost to Philadel­phia’s thriv­ing life sci­ences scene, a for­mer Glax­o­SmithK­line cam­pus and a near­by site has been turned in­to what its de­vel­op­er calls “the largest cowork­ing ecosys­tem” for health­care com­pa­nies in the coun­try.

The Dis­cov­ery Labs, a com­pa­ny spawned by MLP Ven­tures, has se­lect­ed two lo­ca­tions in the King of Prus­sia area as the $500 mil­lion test case for its strat­e­gy of ac­quir­ing and con­vert­ing old phar­ma­ceu­ti­cal R&D fa­cil­i­ties world­wide. The sites add up to 1.64 mil­lion square feet.

Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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