Web Date: January 9, 2017
Deal deluge hits at start of JPMorgan Healthcare meeting
Rain and wind might have caused travel turmoil for the hordes descending upon San Francisco for the annual J.P. Morgan Healthcare Conference this week, but the weather did not slow down the pharmaceutical deal-making. The first official day of the event brought a cluster of pacts, kicking off a year expected to be heavy with biotech acquisitions.
The biggest deal is Takeda Pharmaceuticals’ $5.2 billion purchase of cancer drug developer Ariad Pharmaceuticals. Takeda gains the rights to Iclusig, already approved to treat two types of blood cancer, and brigatinib, an ALK inhibitor expected to gain FDA’s nod in the first half of this year as a treatment for non-small cell lung cancer.
The high price tag—Takeda is paying $24.00 per share for Ariad, a 75% premium over its closing price last Friday—is good news for other firms with marketed cancer drugs. It “highlights the scarcity value” of those firms, Leerink stock analyst Michael Schmidt said in a note to investors.
Ipsen and Amgen also unveiled expansions to their oncology portfolios. Ipsen will pay $575 million up front for the rights to Merrimack Pharmaceuticals’ cancer assets, which include the approved pancreatic cancer treatment Onivyde. Amgen is shelling out $30 million up front to Immatics Biotechnologies as part of a collaboration to develop next-generation T-cell-engaging bispecific immunotherapies.
Meanwhile, Celgene and Sanofi both announced partnerships in autoimmune disease. Celgene is paying privately-held Anokion $45 million up front for access to its antigen engineering technology in a deal that includes an option to purchase the biotech firm. Sanofi will pay an undisclosed sum for rights to ImmuNext’s INX-021, a CD40L antibody in preclinical development with potential to treat a swath of autoimmune diseases.
Lastly, Allergan continued its months-long shopping spree with two more pacts. The specialty pharmaceuticals firm has taken an option to buy Lysosomal Therapeutics after seeing the data from Phase Ib studies of Lysosomal’s Parkinson’s disease drug LTI-291. In a separate deal, Allergan will pay $50 million up front for the rights to Assembly Biosciences’ microbiome gastrointestinal therapy programs.
The deals announced at the kick-off of the annual health care meeting are the first in what is expected to be a blockbuster 2017 for mergers and acquisitions, according to a report released today by Ernst & Young.
“With new regulatory and tax environments expected following the changing geopolitical landscape, most notably in the postelection U.S., expectations are that the industry may roar past the $200 billion in global M&A deal volume seen in the last three years,” the report says. Big pharma firms, it adds, will be responsible for much of that activity.
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