Will some pent-up deal pres­sure amp up a biotech ral­ly?

Over the last 6 weeks we’ve seen the Nas­daq biotech in­dex surge 21%, an ear­ly-stage com­pa­ny just up­sized its IPO and stuck to the range, sec­ondary of­fer­ings are do­ing bet­ter and a whole slate of big biotechs and phar­mas have made it plain that they’re hunt­ing for sig­nif­i­cant new deals be­fore the end of this year.

It’s the kind of en­vi­ron­ment that has peren­ni­al en­thu­si­asts cheer­ing a ral­ly that the in­dus­try hopes has legs need­ed to con­tin­ue past the dog days of sum­mer. And it has some big im­pli­ca­tions for the deal teams bar­ter­ing over biotech as­sets.

While Medi­va­tion $MD­VN is def­i­nite­ly in play, ru­mors abound that big out­fits like As­traZeneca $AZN and Bio­gen $BI­IB con­tin­ue to at­tract takeover in­ter­est. Most buy­ers these days, though, are look­ing to fol­low up on strate­gies adopt­ed by the likes of Al­ler­gan or Gilead. Al­ler­gan likes bit-sized deals – “step­ping stones,” if you ask CEO Brent Saun­ders — tar­get­ing late-stage as­sets that fit neat­ly in­to its core de­vel­op­ment ar­eas. Gilead has been stalk­ing li­cens­ing ef­forts that re­quire big up­front pay­ments. Ab­b­Vie $AB­BV may have set the stan­dard on over-ea­ger­ness when it paid $9.8 bil­lion for Stem­cen­trx in April. And Bio­gen ex­ecs have been talk­ing about deals for a sol­id year now.

But big game hunts have been sparse, more smoke than fire.

Val­u­a­tions, of course, are still well off the heights scaled a year ago, which may al­so help con­cen­trate ef­forts at the deal ta­ble. But they’re climb­ing, al­low­ing com­pa­nies like Bio­Marin (al­so reg­u­lar­ly fea­tured in the ru­mor mill) to raise more mon­ey. If sell­ers have more op­tions than tak­ing any­thing that’s put on the ta­ble, that can on­ly dri­ve deal val­ues fur­ther north.

For all the con­stant chat­ter about M&A, though, the re­al­i­ty is that plung­ing stocks have yet to trig­ger a much dis­cussed wave of ac­qui­si­tions.

Dealog­ic tracked $45 bil­lion in U.S. phar­ma and biotech M&A in the first half, a first-half low we haven’t seen since 2012, when the biotech boom was just start­ing to take off.

An­oth­er bit of food for thought: EP Van­tage just list­ed the most valu­able as­sets in the pipeline, based on sell-side analy­sis, top­ping it with Ax­o­vant’s $AX­ON late-stage drug for Alzheimer’s. In-li­censed from Glax­o­SmithK­line for $5 mil­lion in cash plus promis­es of more if it makes the grade, the bil­lions in val­ue at­trib­uted to such high-risk ef­forts un­der­scores that there may not be as many great deals avail­able as you might be­lieve.

Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Ma­gen­ta halts stem cell work and may sell it­self fol­low­ing pa­tient death, clin­i­cal hold

Magenta Therapeutics said it is halting work on its stem cell transplant drug pipeline and may sell itself, a week after the company reported the death of a patient in an early stage trial of its antibody-drug conjugate.

The Cambridge, MA-based company said it will conduct a “review of strategic alternatives,” and that could include an “acquisition, merger, business combination, or other transaction.”

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How to use ex­ter­nal con­trols: FDA spells out think­ing in new draft guid­ance

The use of real-world evidence to inform the FDA’s decision-making continues apace, with the agency releasing new draft guidance yesterday on how sponsors can compare outcomes of trial participants receiving a test treatment with outcomes in a group of people external to the trial.

The practice of externally controlled trials is common, particularly in oncology or other difficult areas where it’s not ethical or feasible to use internal controls.

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The Big Phar­ma axe: Mer­ck cuts chikun­gun­ya vax, Bris­tol My­ers drops Cy­tomX-part­nered pro­gram, and more

As fourth quarter earnings come in, Big Pharmas are disclosing changes to their pipelines during their investor calls, and sometimes more quietly in presentation appendices.

Merck dropped its chikungunya vaccine candidate, which completed a Phase II study. Merck acquired the vaccine through its purchase of Themis Bioscience in 2020. In developing a vaccine for chikungunya, a mosquito-borne virus, Valneva is the frontrunner, as it submitted its vaccine to the FDA at the end of December.

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Goldfinch Bio CEO Tony Johnson (L) and Karuna Therapeutics CEO Bill Meury

Karuna li­cens­es Goldfinch as­sets to com­pete with Boehringer In­gel­heim in neu­ro­science

Karuna Therapeutics is looking to compete with Boehringer Ingelheim on depression and anxiety with a new license to Goldfinch Bio’s assets, starting with $15 million to the shuttered biotech.

Karuna steps into an arena already being tested by Boehringer in multiple Phase II studies — the two are targeting transient receptor potential canonical 4 and 5, or TRPC4/5, which is thought to have a role in neuroscience indications. Goldfinch’s asset went through a Phase II in kidney diseases, but Karuna’s sights are set on mood and anxiety disorders for now.

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Teresa Graham, incoming Roche Pharmaceuticals CEO

In­com­ing Roche CEO builds out his top team, tap­ping Genen­tech vet to lead phar­ma di­vi­sion

Roche announced another leadership shuffle Thursday morning – the head of global product strategy, Teresa Graham, will take over as CEO of Roche Pharmaceuticals in March while the company’s corporate executive committee will make a spot for Levi Garraway, CMO and executive VP of global product development.

Thomas Schinecker will take over the top spot as Roche group CEO in March, leaving his spot as head of diagnostics.

Roche's headquarters in Basel, Switzerland (Kyle LaHucik for Endpoints News)

Roche ditch­es fi­nal PhI­II for can­cer hope­ful, re­ports set­back for key drug in $1.4B buy­out

Over the past few years, Roche has released news about its AKT inhibitor ipatasertib in drips — most of them negative. The drug yielded mixed data in a key prostate cancer trial, Phase III flops in triple-negative breast cancer forced the pharma giant to pull the plug there, and in mid-2022 Roche trimmed two more early-stage indications in prostate cancer after completing the trials.

Now, the last piece of the program is gone.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Sanofi scraps PhI­II tri­al for Prin­cip­ia drug af­ter re­view­ing com­pe­ti­tion

Months after the FDA placed Phase III trials of Sanofi’s BTK inhibitor on hold, the company is winding down one of the studies.

Sanofi reported in its Q4 earnings that the URSA study “was discontinued after careful evaluation of the emerging competitive treatment landscape in” myasthenia gravis, a rare disease that causes muscle weakness.

The Phase III, placebo-controlled trial was testing tolebrutinib in patients with the moderate-to-severe form of the disease. It started in late 2021, according to records on clinicaltrials.gov, and was originally designed to recruit 154 participants who were receiving the standard of care.

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