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4 Small Biotech M&A Targets for Gilead
https://www.biospace.com/article/unique-4-small-biotech-m-and-a-targets-for-gilead/
Investors and analysts had been encouraging Gilead Sciences to acquire something for a long time, so they were mostly happy when it bought Kite Pharma in September. Then in December, Gilead and Kite decided to buy Cell Design Labs. Again, mostly happy, but investors still note Gilead has about $36.7 billion in cash, cash equivalents, and marketable securities at the end of 2017. With its hepatitis C franchise faltering, probably permanently, investors hope Gilead will continue to buy companies to give it a new focus and return to growth.
Keith Speights, with The Motley Fool, offers four potential acquisition targets for Gilead.
1. CRISPR Therapeutics
As its name suggests, CRISPR Therapeutics focuses on developing therapies using CRISPR/Cas9 gene editing technology. In mid-December, CRISPR partnered with Vertex Pharmaceuticals to co-develop and co-commercialize CTX001, an investigational gene editing treatment for beta-thalassemia and sickle cell disease.
Speights writes, “There are a couple of advantages for CRISPR. One is that while the biotech is collaborating with Vertex on three programs, it doesn’t have a big partner for its cell therapy program. Another is that CRISPR Therapeutics appears to be on track to file an Investigational New Drug application in the fourth quarter of 2018 to advance one of its cell therapy programs into clinical testing.”
2. Editas Medicine
Editas is also a CRISPR gene-editing company. It is also working on therapeutics for sickle cell disease and beta-thalassemia. If Gilead wants to get into the gene-editing business, is one a better fit than the other? Speights writes, “Editas … has a partnership with Juno Therapeutics with its cell therapy program. With Celgene in the process of acquiring Juno, Gilead could find itself in a bidding war with Celgene if it chose to go after Editas. However, Editas claims intellectual-property rights for use of CRISPR/Cas9 in humans, so paying a premium now for the small biotech could be worth it over the long run.”
3. Madrigal Pharmaceuticals
Based in West Conshohocken, Pennsylvania, Madrigal is focused on developing drugs for cardio-metabolic and fatty liver diseases. Its lead product candidate is MGL-3196 for non-alcoholic steatohepatitis (NASH) and familial dyslipidemias/hypercholesterolemias. NASH is a fatty-liver disease similar to cirrhosis in people who don’t drink alcohol. It is associated with the obesity epidemic and related disorders such as diabetes. There’s a huge unmet medical need, and because it is liver-based, would dovetail with Gilead’s expertise in hepatitis and other liver diseases.
Speights writes, “Gilead currently has three NASH candidates in its pipeline: ASK-1 inhibitor selonsertib, FXR agonist GS-9674, and ACC inhibitor GS-0976. The addition of MGL-3196, a thyroid hormone receptor beta-selective agonist, would give the big biotech another approach to treating NASH. Buying Madrigal could lock up another potentially effective drug that Gilead could use as a monotherapy or in combinations with its other drugs.”
4. Galapagos NV
Headquartered in Mechelen, Belgium, Galapagos already has a global collaboration deal with Gilead to develop and commercialize filgotinib to treat several inflammatory diseases, and in December, Galapagos opted in to co-promote the drug in eight European countries, Germany, France, Italy, Spain, the UK, the Netherlands, Belgium and Luxenbourg. For the most part, the company is working to develop drugs to treat rheumatoid arthritis, inflammatory bowel disease and fibrosis.
Speights thinks this is a longshot, even though Gilead owns 13 percent of the company. Although if it bought the company, it wouldn’t have to split the profits on the filgotinib deal, he says, “Perhaps the biggest reason is that Galapagos apparently doesn’t want to be acquired. Galapagos CEO Van de Stolpe is reportedly trying to secure a European pharmaceutical company to acquire at least a 10 percent stake in Galapagos to thwart a takeover bid from Gilead.”
Merck Does a Fine Deal, But Not the One It Needs
https://www.bloomberg.com/gadfly/articles/2018-02-21/merck-viralytics-deal-just-doubling-down-on-keytruda
Instead of finding new growth sources, the drugmaker doubles down on Keytruda.
...Merck is overly dependent on Keytruda, which is expected to account for 14 percent of revenue in 2018 and 25 percent in 2022. And it seems laser-focused on deepening that commitment. Its previous big deal, the $137 million acquisition of Rigontec GmbH in September, was also IO-focused. Its licensing deal for AstraZeneca PLC's cancer drug Lynparza will generate revenue, but will likely only really pay off if the drug succeeds in combination with Keytruda.
...
And the pipeline is thin outside of Keytruda. Merck recently canceled a highly anticipated late-stage Alzheimer's trial. There are some vaccines, a few other cancer programs, and a heart drug in late-stage trials. But there's nothing to particularly excite investors. The company is badly in need of other sources of potential growth.
This isn't an abstract concern -- it's a weight on Merck's stock price. Shares still haven't recovered from Roche Holding AG's November release of positive data from a competing combination study in lung-cancer patients -- even though Merck has since produced impressive combo data in the same group.
Doctors In China Lead Race To Treat Cancer By Editing Genes
https://www.npr.org/sections/health-shots/2018/02/21/585336506/doctors-in-china-lead-race-to-treat-cancer-by-editing-genes
Merck bags oncolytics player Viralytics for $394M (160% premium)
https://endpts.com/merck-executes-an-ma-deal-for-its-pd-1-cancer-franchise-buying-an-oncolytics-biotech-for-394m/
Forget the Amazon announcement: Roche acquiring Flatiron Health is the biggest looming healthcare disruption.
https://medium.com/@travismay/forget-the-amazon-announcement-d92160837f80
By Travis May and Eric Perakslis. Eric Perakslis is the former Chief Information Officer of the FDA, and Chief Scientific Officer of Datavant. Travis May is Founder and President of Datavant, and Former CEO of LiveRamp.
Last week, Roche (the world’s second largest pharma company) announced a $1.9 billion acquisition of Flatiron Health (an oncology data company that captures data from hospitals and health centers about how drugs impact patients’ cancer treatments).
In the world of startup tech acquisitions, any deal this size is notable. But this particular deal is more than notable: the announcement foreshadows a disruption in how drugs are discovered, tested, and delivered to patients—changing the fundamental business model of healthcare and the pace of medical innovation.
Let’s walk through the implications.
Implication #1: Roche is now a data company that happens to manufacture drugs. With the Flatiron acquisition, Roche now owns a rich, proprietary dataset about how oncology drugs impact patients over time in the real world, providing thousands of times the data that most pharma companies would collect in a clinical trial context. Access to this dataset will impact every part of Roche’s business, from the way it discovers drugs, to the way it designs clinical trials, to the way it markets approved medicines to patients. This data will become Roche’s proprietary edge against other pharma companies.
Put another way: Roche is now a data business. It is building a large enough data asset to begin wielding that as its primary differentiator. Its strategy will be to glean more and more data over time, ensure that the data remains proprietary, ensure that it is used in a way that advantages its entire business, and continue building a data edge over its competitors.
Implication #2: Pharma is now a network-effect driven industry. Welcome to the biggest platform war yet. Data businesses are inherently network-effect driven: as Roche develops more drugs, it will collect more proprietary data, making it even more effective at developing additional drugs in the future. This virtuous cycle creates a structural advantage and a moat for a business.
These winner-take-all dynamics invite a war between healthcare companies to gain the dominant data edge. Platform wars have shaken most other industries, as every business Amazon has touched can attest to. Healthcare, given its size and importance to the economy, will be the largest platform war yet. Roche has taken an early lead in this war, but expect it to be long and bloody, as other pharma companies seek to respond.
Implication #3: Expect the lines to blur between insurer, provider, and pharma. The platform war isn’t limited to just pharma. The healthcare industry is traditionally split into the three major constituencies, with significant tension between the players, but these lines are blurring. Flatiron’s software is used by providers—the physicians and hospitals that actually deliver care to patients—and Roche will need to maintain close relationships with providers for the acquisition to be successful. Moreover, the data Flatiron has is valuable to all three of those constituencies, meaning a future Roche-affiliated provider could potentially deliver better care based on Flatiron’s data.
As pharma companies, insurers, and providers all become data companies, the three categories will blur and become more competitive, with each vying to become the dominant platform.
Implication #4: Patient privacy is about to take center stage. The core of Flatiron’s model is collecting large amounts of de-identified information about patients, and as data becomes more central to pharma strategies, a dialog around patient privacy will take center stage. Patient data, initially and ultimately, should always belong to the patients, and it will be critical that uses of data are always centered around improving patient outcomes. Beyond Flatiron, physician society initiatives are collecting and aggregating data from oncology practices to support greater outcomes and to guide and ensure quality standards are met. Many hospitals and medical systems are seeking to monetize patient data to offset the significant costs of health IT infrastructure. Indeed, the time has come for a robust patient-centric data economy, but individual patients must benefit first and foremost and their privacy and security must be upheld. It’s time for a robust dialog that has happened too late in many other industries.
Implication #5: We’re going to see an inflection point in patient outcomes, survival rates, and life expectancy. This is the most exciting news. All of our cumulative scientific discovery as a society has led us to still understanding only a small fraction of how the human body works. While there is so much we don’t know, understanding medical outcomes is as much a problem of data as it is a problem of biology.
Sadly, while technology has driven dramatic productivity gains in most other sectors, overall drug development productivity has declined over the last 60 years: more than 90% of drugs fail clinical trials, and the drug development process costs billions of dollars per successful drug. A data-driven process promises to reverse this trend, as data can be used to more effectively discover drugs, understand who those drugs will be effective for, optimize the clinical trial process, and help those drugs reach the right consumer; all of these effects have the potential to slash the costs of drug development and increase the odds of success.
Roche’s acquisition of Flatiron is the first move in a process that will fundamentally change the healthcare industry—as pharma companies shift from molecule-driven to data-driven. The next five years will be an exciting time for patients, and a transformational time for the industry.
30+ New Antidepressants (2018): Drugs In Clinical Trials
https://mentalhealthdaily.com/2018/02/13/new-antidepressants-2018-drugs-in-clinical-trials/
14. Ganaxolone
Mechanism: GABAA receptor modulator
Status: Phase II
Developer: Marinus Pharmaceuticals
Ganaxolone is a drug being developed by Marinus Pharmaceuticals for the treatment of postpartum depression, as well as several other conditions such as: epilepsy and Fragile X syndrome. Pharmacodynamic assessments indicate that Ganaxolone functions as a selective positive allosteric modulator of the GABAA receptor. When administered to animals, Ganaxolone yields antiepileptic and anxiolytic effects whereby it respectively protects against seizures and reduces anxiety-like behavior.
Its action as a positive allosteric modulator of both synaptic and extrasynaptic GABAA receptors aids in the normalization of over-excited neurons and excitotoxicity. Like other GABAA receptor modulators, Ganaxolone binds to allosteric sites of the GABAA receptor which triggers opening of the chloride ion channel to hyperpolarize the neuron. Hyperpolarization of the neuron yields an inhibitory effect upon neurotransmission whereby likelihood of action potentials is reduced.
Compared to other agents that modulate the GABAA receptor, Ganaxolone may be unique in its ability to act upon extrasynaptic receptor sites. Currently, Ganaxolone is in phase II of clinical trials. The most common side effects associated with Ganaxolone reported thus far include: sleepiness, dizziness, and fatigue – (most of which should be expected with GABAA receptor modulation).
30+ New Antidepressants (2018): Drugs In Clinical Trials
https://mentalhealthdaily.com/2018/02/13/new-antidepressants-2018-drugs-in-clinical-trials/
Takeda rides the neuro R&D Wave with latest biotech pact
https://www.fiercebiotech.com/biotech/takeda-rides-neuro-r-d-wave-latest-biotech-pact
Perennial biotech dealmaker Takeda is at it again, striking a new pact with Wave Life Sciences with a focus on a series of difficult-to-treat neurological disorders.
The R&D and sales collab, which has not come with any financial details, sees the pair work on antisense oligonucleotides for genetically-defined neurological diseases.
Oligonucleotides are designed to reduce the expression of disease-promoting proteins, or to transform the production of dysfunctional mutant proteins into the production of functional proteins, in what researchers hope will translate into a treatment.
Breaking it down, there are two parts to the deal: first up, Wave will focus on programs targeting Huntington’s disease (HD), amyotrophic lateral sclerosis (ALS), frontotemporal dementia (FTD) and spinocerebellar ataxia type 3 (SCA3).
On this side, both have the option to co-develop and co-sell (should clinical proof of mechanism be found) across three areas:
WVE-120101 and WVE-120102, which selectively target mutant huntingtin and are currently in Phase 1b/2a clinical trials for the treatment of HD;
WVE-3972-01, which targets C9ORF72 and is expected to be evaluated in clinical studies for the treatment of ALS and FTD beginning in Q4 2018;
And Program targeting ATXN3 for the treatment of SCA3.
The second part sees the Japanese pharma take the rights to exclusively license a number of preclinical programs targeting other neurological disorders, including Alzheimer’s (which has not had the best few months, or in fact the best 15 years R&D-wise) and Parkinson’s disease.
And at any one time during a four-year term, the companies may partner up on up to six early-stage programs.
...
AIMT shares surge (12% /PM) as PhIII peanut allergy study wows on the primary endpoint, setting up FDA pitch
https://endpts.com/aimmune-shares-surge-as-phiii-peanut-allergy-study-scores-on-the-primary-endpoint-setting-up-fda-pitch/
PS—Endpoints has made it very hard to copy/paste blurbs from their site. Have to do it in very small chunks at a time.
Statement from FDA Commissioner Scott Gottlieb, M.D. on advancing the development of novel treatments for neurological conditions; part of broader effort on modernizing FDA’s new drug review programs
https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm596897.htm
Roche pays $1.9bn for Alphabet-backed Flatiron Health
https://www.ft.com/content/f79d2cc0-1290-11e8-940e-08320fc2a277
https://fintel.io/sob/us/vktx
Fintel is better imo. Updates most frequently. See “Buyers” from Ownership menu. Default view doesn’t show all for some reason.
Looks great btw! GL all!
MRNS—Notes from Leerink:
https://twitter.com/irishtraveller7/status/964172021730021376
Institutional buys in February:
https://fintel.io/sob/us/mrns
MRNS is a risky bet without a doubt but the valuation gap with SAGE is so big that it may be worth a shot.
Cormorant buys 500,000 shares. Many others with significant positions. Goldman Sachs with a small position as well.
https://fintel.io/sob/us/mrns
MRNS—HC Wainwright starts Buy rating with $33 PT
MRNS—HC Wainwright starts Buy rating with $33 PT
Amgen ‘looking hard’ at striking deals using $27bn cash pile
https://www.ft.com/content/02106674-0867-11e8-9650-9c0ad2d7c5b5
Amgen, the world’s largest biotech company, has said it is “looking hard” for deals to deploy its $27bn cash pile but warned it is struggling to find targets amid soaring valuations in the life sciences sector.
The note of caution comes as mergers and acquisitions activity in the healthcare sector recorded its strongest start to a year in more than a decade, with almost $32bn of global deals announced since the start of January.
...
“We want to deploy any excess cash and our first priority is to do acquisitions and invest in the business,” said David Meline, Amgen’s chief financial officer, in an interview with the Financial Times.
But he added: “We see all of these deals announced, and we participate pretty actively in considering whether to bid, but we haven’t been able to come up with a business case that would make a return for our shareholders.
“We will keep pushing ourselves and keep looking ourselves, because we have lots of financial flexibility.”
He cautioned it would be difficult “as long as people are willing to pay levels above what we deem we can make a return on”.
Mr Meline was talking before the recent market gyrations, which have sent valuations for biotech groups lower.
Amgen’s stance runs counter to predictions of a deals frenzy from bankers and lawyers, who say they are working on more M&A leads than they have done in years.
The company’s warnings on valuations carry additional weight because it is among the pharmaceutical companies with the most firepower to do big-ticket acquisitions.
Agreed. (eom)
ASCO abstract titles will be released on April 25, 2018.
I think the earliest (and best time to release it) would be at ASCO in June.
VKTX—Re: liver enzymes, please see thread below.
"elevated liver enzymes" were reported on 2016 poster due to how Metabasis defined an adverse event. Instead of usual (>3X ULN) they defined it as >3X baseline. ALT/AST notorious for changing wildly from week to week for no particular reason. 2809 safety OK so far. $VKTX
— David Bautz, PhD (@DavidBautz) January 19, 2018
Piper Jaffray initiates coverage at overweight with $4 PT
[OT]This new company wants to sequence your genome and let you share it on a blockchain
https://www.technologyreview.com/s/610221/this-new-company-wants-to-sequence-your-genome-and-let-you-share-it-on-a-blockchain/
Cryptocurrency in exchange for your genetic data! Sounds a bit like a scam, but it’s the premise behind a new company founded by a leading geneticist. Nebula Genomics says it plans to sequence your genome for under $1,000, give you insights about it, secure it using a blockchain, and allow you to do whatever you want with the data.
...
When you pay to take a DNA test—through 23andMe, Helix, or Ancestry.com, for example—the company that does the testing owns your genetic data. Nebula wants to sequence people’s entire genomes and let them own it, allowing them to earn digital money by sharing it.
In a white paper released today, Church and his colleagues reason that pharma and biotech companies need large genomic data sets to develop new drugs. Companies typically buy this data from academic institutions or genetic testing companies like 23andMe, often for millions of dollars.
Nebula says it aims to eliminate the middleman so that people can sell their genomic data straight to drug companies and other data buyers.
I have had VTGN on my WL for some time. Thanks for the info ronpopeil.
SAGE is also increasing N to power the SAGE-227 PPD trial to 90% and moving readout from Q2 to Q4 2018.
$SAGE further increased trial size in 217 PPD trial to increase power to 90%. Data 4Q18 from 2Q18
— M (@bio_clouseau) February 7, 2018
Is it safe to assume SAGE does not plan to sell itself this year then?
SAGE $575M secondary offering (eom)
VKTX +16% hitting another 52wk high today (eom).
ARRY(+9%)—Stifel Nicolaus reiterates Buy w/ $23 PT
(No position)
@AF_Biotech posted that (as you may know very well). He is bullish on SAGE and has been dismissive of MRNS.
Re: oral formulation of Ganaxolone, they failed two p3 trials in 2016 because of low oral bioavailability in the smaller dosage used then. Upcoming PPD data is IV based. It will be more potent. Ganaxolone is also going to be Captisol-enabled, just like SAGE-547 was. Even for oral formulation, they (Marinus) are planning to launch the Amaryllis study using a higher dosage.
The CDKL5 data that was reported in September last year produced very good results. They have improved their oral Ganaxolone as you can see.
Is it a sure thing? I can’t say. No one can. But I like the odds for upcoming PPD data.
ARRY(+13%) melanoma drugs show significant survival vs Roche drug in study
https://www.reuters.com/article/us-array-biopharma-melanoma/array-melanoma-drugs-show-significant-survival-vs-roche-drug-in-study-idUSKBN1FQ1U2
A combination of experimental drugs from Array BioPharma Inc kept patients with advanced melanoma associated with a common gene mutation alive for nearly three years and twice as long as a rival Roche Holding AG medicine, according to data from a late stage study released on Tuesday.
The oral drugs, encorafenib and binimetinib, are awaiting a U.S. approval decision by June 30 based on promising data on their ability to stall disease worsening, or progression-free survival (PFS). European regulators are also reviewing the treatment.
However, overall survival is seen as the gold standard for cancer treatments and the new data is likely to significantly enhance approval and eventual sales prospects.
Suitors Take Note as Bay Area's Nektar May Be Up for Sale
https://www.biospace.com/article/unique-suitors-take-note-as-bay-area-s-nektar-may-be-up-for-sale/
John Carroll, with Endpoints News, writes, “It hasn’t all been a bed of roses for Nektar over the past year. The biotech attempted to win an accelerated European OK for its cancer drug Onzeald (NKTR-102), but ran straight into a regulatory brick wall. The CHMP voted thumbs down on Onzeald, which was also bad news for Daiichi Sankyo, which bet $20 million upfront on a regional licensing pact for the drug. Daiichi recently signaled that it wanted to bail on the deal.”
The company’s stock has more than tripled in value since early November, largely based on results for NKTR-214. Shares are currently trading at $88. The 52-week high was $99.02 and the 52-week low was $12.50. Nektar has a market cap of $13.857 billion.
The company’s value, and the high-risk aspects of its pipeline, might make buyers uneasy, making licensing or partnership deals more likely.
Bloomberg writes, “A Nektar sale would add to a $25 billion burst of biotechnology and drug deals since Jan. 1, with extra cash from the U.S. tax law passed last year seen as fueling a continuing boom. The tax law should unlock about $160 billion in overseas cash for big drugmakers to spend on takeovers, Goldman Sachs Group Inc. analyst Salveen Richter has estimated.”
...
Brad Loncar, founder of Loncar Investments and the Loncar Cancer Immunotherapy Index, told Bloomberg, “Owning NKTR-214 could either put an acquirer in a league of their own or blow up in their face, because all the excitement surrounding this drug is based on very little patient data, as intriguing as it is.”
Red flags in the data set will probably only become relevant when brexanolone reaches the market and has to compete with other options. True, there is nothing specifically approved to treat the condition, though various anti-depressants are prescribed. But that could change in the near future – Marinus Pharmaceuticals is due to start reporting data from its phase II postpartum depression programme early next year, with a similar agent called ganaxolone. Shares in the company opened 17% higher today on hopes for comparable success.
Results from Marinus will be held up against the data below, which shows that Sage delivered a stronger placebo-adjusted reading in patients with more severe depression. These patients also demonstrated a sustained, significant effect through a 30-day follow up period; a statistically significant difference in effect size was not seen over 30 days in moderate patients.
Amgen’s $70B in ‘deal capacity’ post-tax reform puts the spotlight on ‘big things’ in M&A — analyst
https://endpts.com/amgens-70b-in-deal-capacity-post-tax-reform-puts-the-spotlight-on-big-things-in-ma-analyst/
[OT]This Robot Will Brew Your Coffee and Serve You for $3
http://time.com/money/5132223/robot-barista-tokyo/
NKTR—Buyout buzz hits fever pitch on report that Nektar is ‘exploring options’
https://endpts.com/buyout-buzz-hits-fever-pitch-on-report-that-nektar-is-exploring-options/
When a stock trades like VKTX today on a 500 point Dow plunge day, the market takes notice. Congrats to all longs, wish you further gains in coming days. Any MDGL pop should lift VKTX too, well before their own readout.
Electric Cars and Niche Metals Lure Cash to Africa's Mines
https://www.bloomberg.com/amp/news/articles/2018-02-02/electric-cars-and-niche-metals-lure-cash-back-to-african-mines
Physicians, ethicists urge Congress not to pass ‘right to try’ legislation
https://www.statnews.com/2018/02/01/physicians-ethicists-congress-right-to-try/
Roche silently scraps two one-time blockbuster hopefuls as $725M Seragon deal craters
https://endpts.com/roche-silently-scraps-two-one-time-blockbuster-hopefuls-as-725m-seragon-deal-craters/