Is Juno worth a $10B-$12B buy­out price? An­a­lysts see megabucks deal in the mak­ing on re­port­ed Cel­gene talks

Just a week af­ter bag­ging a blood can­cer drug at the FDA’s thresh­old in a multi­bil­lion-dol­lar deal, Cel­gene is re­port­ed­ly in talks to buy Juno Ther­a­peu­tics in a move that would give it a ma­jor, late-stage ef­fort on the CAR-T front.

The Wall Street Jour­nal is re­port­ing that sources close to the deal are telling them Cel­gene is in the hunt, and some an­a­lysts say that any fi­nal price could hit close to or even sur­pass the $10 bil­lion mark.

A spokesper­son for the biotech tells me that Juno doesn’t com­ment on mar­ket ru­mors. But you can be­lieve that there are plen­ty of pun­ters who are bet­ting that there’s fire un­der all that bil­low­ing smoke. Juno’s shares are up 55% in pre­mar­ket trad­ing Wednes­day. Be­fore the big spike, its mar­ket cap sat at $5.2 bil­lion.

Typ­i­cal­ly, with a mar­ket cap that big, a buy­out could be ex­pect­ed to ring up around a 50% pre­mi­um. But an­a­lysts who have been fol­low­ing these com­pa­nies say that’s all wrong. Cel­gene, they say, paid $93 a share to buy in­to Juno, and they ex­pect CEO Mark Alles to go all in on a deal that could range as high as $12 bil­lion.

Michael Schmidt at Leerink not­ed:

If a deal hap­pens like­ly de­pends on the price and if oth­er bid­ders emerge. We’d be sur­prised if JUNO would ac­cept an of­fer low­er than KITE’s ac­qui­si­tion price of $11.9Bn, giv­en the com­pa­ny’s high lev­el con­vic­tion of hav­ing de­vel­oped a best-in-class CAR-T plat­form and that CELG pre­vi­ous­ly ac­quired 10% of JUNO shares at $93/share.

Cel­gene will clear­ly be fo­cused on gain­ing the same ca­chet that Gilead found when it ac­quired Kite just ahead of its first land­mark ap­proval. But this one will take more time to bear reg­u­la­to­ry fruit. Nev­er­the­less, Ge­of­frey Porges al­so says it could wind up in the same ball­park as Gilead’s $12 bil­lion deal to ac­quire Kite. He notes:

We would ex­pect Cel­gene to pay up to at least the val­u­a­tion where they made their pri­or in­vest­ment ($93/share) in Juno. This would make it a ~$10bn trans­ac­tion, or a 98% or 82% pre­mi­um to Juno’s 30 day ($46.98) and 90 day ($50.82) trail­ing stock price. This would al­so, co­in­ci­den­tal­ly, put the trans­ac­tion price ($11bn gross with Juno’s cash) in the same range as the to­tal pay­ment by Gilead (GILD, MP) for Kite ($12bn), which al­so seems rea­son­able giv­en the sub­stan­tial sim­i­lar­i­ty be­tween the com­pa­nies.

There’s like­ly to be plen­ty of kick­back on that set of num­bers, though. Juno’s stock has re­gained much of its lost val­ue since the lead tri­al de­ba­cle, and pay­ing dou­ble the cur­rent mar­ket cap would like­ly raise ques­tions about Alles’ ne­go­ti­at­ing abil­i­ties. Bloomberg an­a­lyst Max Nisen counts him­self among the skep­tics, not­ing that Cel­gene it­self has al­ready pro­ject­ed peak sales for Juno’s JCAR017 at an unim­pres­sive $1 bil­lion.

Juno has al­so been spot­light­ing its own BC­MA CAR-T, leav­ing Cel­gene — close­ly part­nered with blue­bird bio on a close­ly-watched BC­MA pro­gram — with a po­ten­tial prob­lem that could lead to ei­ther elim­i­nat­ing one or see­ing one go to an­oth­er com­pa­ny.

Once a leader in the race to field the first CAR-T, Juno was slammed af­ter its lead drug had to be scrapped fol­low­ing a string of deaths in the piv­otal study. But armed with what it had learned in the process, the biotech was well along the way in mount­ing a come­back with a new lead ther­a­py that has pro­duced some stel­lar ef­fi­ca­cy and safe­ty da­ta.

Mark Alles

Cel­gene, mean­while, has been forced to mount a come­back ef­fort of its own af­ter Alles man­aged to rat­tle the mar­ket last year with a shaky fi­nan­cial per­for­mance that raised doubts about its con­tin­ued fast growth. Much of its growth now is due to hik­ing the price of its fran­chise drug Revlim­id. And af­ter a late-stage test proved mon­gersen was a flop, most eyes had turned to up­com­ing da­ta on ozan­i­mod for proof that Cel­gene has the goods to please a de­mand­ing set of in­vestors.

That set the stage for last week’s $1.1 bil­lion up­front deal to ac­quire Im­pact, a com­pa­ny that had been new­ly float­ed to take a sec­ond stab at run­ning the myelofi­bro­sis drug fe­dra­tinib back in front of FDA reg­u­la­tors af­ter John Hood, a co-in­ven­tor, made the case that the safe­ty is­sues that had tor­pe­doed the drug at Sanofi were in­ac­cu­rate.

In their ab­stract out for ASH last fall, Juno ex­ecs spelled out a key piece of da­ta for the high dose arm of the ear­ly study on JCAR017. Ze­ro­ing in on that one snap­shot, re­searchers say they tracked an 80% over­all re­sponse rate and a 73% com­plete re­sponse rate at 3 months for the high dose among a “piv­otal core” group of 15 pa­tients.

But Brad Lon­car, an in­de­pen­dent in­vestor who set up the Lon­car Can­cer Im­munother­a­py ETF $CN­CR, hasn’t been a big fan of Juno’s.

Once fu­ri­ous over No­var­tis’ da­ta ma­nip­u­la­tion scan­dal, the FDA now says it’s noth­ing they need to take ac­tion on

Back in the BP era — Before Pandemic — the FDA ripped Novartis for its decision to keep the agency in the dark about manipulated data used in its application for Zolgensma while its marketing application for the gene therapy was under review.

Civil and criminal sanctions were being discussed, the agency noted in a rare broadside at one of the world’s largest pharma companies. Notable lawmakers cheered the angry regulators on, urging the FDA to make an example of Novartis, which fielded Zolgensma at $2.1 million — the current record for a one-off therapy.

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Covid-19 roundup: GSK, Am­gen tai­lor R&D work to fit the coro­n­avirus age; Doud­na's ge­nomics crew launch­es di­ag­nos­tic lab

You can add Amgen and GSK to the list of deep-pocket drug R&D players who are tailoring their pipeline work to fit a new age of coronavirus.

Following in the footsteps of a lineup of big players like Eli Lilly — which has suspended patient recruitment for drug studies — Amgen and GSK have opted to take a more tailored approach. Amgen is intent on circling the wagons around key studies that are already fully enrolled, and GSK has the red light on new studies while the pandemic plays out.

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In a stun­ning set­back, Amarin los­es big patent fight over Vas­cepa IP. And its high-fly­ing stock crash­es to earth

Amarin’s shares $AMRN were blitzed Monday evening, losing billions in value as reports spread that the company had lost its high-profile effort to keep its Vascepa patents protected from generic drugmakers.

Amarin had been fighting to keep key patents under lock and key — and away from generic rivals — for another 10 years, but District Court Judge Miranda Du in Las Vegas ruled against the biotech. She ruled that:
(A)ll the Asserted Claims are invalid as obvious under 35 U.S.C.§ 103. Thus, the Court finds in favor of Defendants on Plaintiff’s remaining infringementclaim, and in their favor on their counterclaims asserting the invalidity of the AssertedClaims under 35 U.S.C. § 103.

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Covid-19 roundup: J&J, BAR­DA set ear­ly 2021 fin­ish line for $1B vac­cine race; FDA al­lows emer­gency drug use, ahead of piv­otal da­ta

J&J has zeroed in on a Covid-19 vaccine candidate that it hopes to begin testing in humans by September this year — with the extraordinary goal of getting it ready for emergency use in early 2021. And together with BARDA, it’s committing $1 billion to make it happen.

That kind of accelerated timeline would fall on the fast side of NIAID director Anthony Fauci’s well-publicized prediction that it would be another 12 to 18 months before a vaccine can be available for public use. A Phase I trial of Moderna’s mRNA vaccine began two weeks ago, and both the biotech and fellow mRNA player CureVac have discussed similar, if not even faster, timelines for emergency use among healthcare workers.

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As­traZeneca says its block­buster Farx­i­ga proved to be a game-chang­er in CKD — wrap­ping PhI­II ear­ly

If the FDA can still hold up its end of the bargain, AstraZeneca is already on a short path to scooping up a cutting-edge win with a likely approval for their SGLT2 drug Farxiga in cutting the risk of heart failure. Now the pharma giant says it can point to solid evidence that the drug — initially restricted to diabetes — also works for chronic kidney disease, potentially adding a blockbuster indication for the franchise.

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It is 'kind of a proven tech­nol­o­gy': Hep B vac­cine mak­er joins glob­al hunt for coro­n­avirus vac­cine

Using lab-grown proteins that are engineered to mimic the architecture of viruses to induce an immune response, VBI Vaccines is joining the hunt for a coronavirus vaccine — harnessing technology that has initially been proved safe in early trials as a prophylactic for cytomegalovirus (CMV) infection.

Unlike the raft of the companies in the Covid-19 vaccine race — including Moderna, CureVac and J&J — VBI is taking a pan-coronavirus approach, by developing a vaccine that will encompass Covid-19, severe acute respiratory syndrome (SARS), and Middle East respiratory syndrome (MERS).

Can a pair of top AveX­is alum­ni steer a new gene ther­a­py up­start to R&D glo­ry? 3 VCs bet $60M on it

VCs love few things more than a proven executive team when it comes to launching a new company. And now a group of A-listers has turned to a pair of top execs out of AveXis to steer the latest gene therapy player into the clinic.

The biotech is Waltham, MA-based Affinia and the two execs are Sean Nolan and Rick Modi — the former CEO and CBO respectively of AveXis, the gene therapy pioneer that fetched $8.7 billion in a sale to Novartis. Nolan has now taken the chairman’s role at Affinia while Modi moves up to the CEO post at the company.

Un­de­terred by a pan­dem­ic, Gilde Health­care rais­es their largest fund yet

When Pieter van der Meer started raising the capital for Gilde Healthcare’s fifth fund in the waning months of 2019, he had his eyes on a different chain of events that could change the healthcare system and perhaps even play to his firm’s advantage: The US presidential election.

Since raising their third fund in 2011, the 34-year-old Dutch firm had focused on value-based care. They chose late-stage biotechs that came up with new devices and delivery systems for de-risked established compounds, and when they chose preclinical biotechs, they spoke with potential pharma partners, payers and regulators to ask where and at what prices the drug made sense. As the Democratic primary became a contest over how to lower healthcare costs, it looked like a strategy that could pay off.

Daniel O'Day (AP Images)

Gilead CEO Dan O'­Day of­fers a de­tailed ex­pla­na­tion on remde­sivir ac­cess — re­as­sur­ing an­a­lysts that Covid-19 da­ta are com­ing fast

After coming under heavy fire from consumer groups ready to pummel them for grabbing the FDA’s orphan status for remdesivir — reserved to encourage the development of rare disease therapies — Gilead CEO Daniel O’Day had some explaining to do about the company’s approach to providing access to this drug to patients suffering from Covid-19. And he set aside time over the weekend to patiently explain how they are making their potential pandemic drug available in a new program — one he feels can better be used to address a growing pack of infected patients desperately seeking remdesivir under compassionate use provisions.

In addition to trying to reassure patients that they will once again have an avenue to pursue access, O’Day also reassured some analysts who had been fretting that China’s quick comeback from the coronavirus outbreak could derail its ultra-fast schedule for testing the drug in patients. The data are still expected in a few weeks, he says in the letter, putting the readout in April.

O’Day emphasizes that Gilead intends to pursue a pricing approach that will make this drug widely available — if it proves effective and safe. But no one is quite sure just what the longterm value would be, given the work being done on a variety of vaccines that may be rolled out as early as this fall — at least to the most heavily threatened groups.

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