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Mergers & Acquisitions

Deals proliferate in biotech industry

Takeovers by Big Pharma firms come amid a biotech industry slump

by Shi En Kim
August 11, 2022 | A version of this story appeared in Volume 100, Issue 28


The chemical structure of voxelotor.

Early August has seen a flurry of biotech deals: On Aug. 4, Gilead Sciences disclosed that it would acquire MiroBio for $405 million, and Amgen announced plans to nab ChemoCentryx for $3.7 billion. On Aug. 8, Pfizer said it would pay $5.4 billion in cash for Global Blood Therapeutics; the next day, CSL completed its purchase of Vifor Pharma for $11.7 billion, the largest deal announced in the industry lastyear.

The chemical structure of avacopan.

UK-based MiroBio specializes in developing a class of antibodies called immune inhibitory receptor agonists to treat autoimmune diseases. The molecules “agonize” overactive immune cells by binding to their receptors to quiet them.

“We’re targeting very specific immune cell receptors,” says Eliot Charles, MiroBio’s chair. “The hope is that this is going to translate to safer medicines, because we’re not just dampening down the whole immune system but going after very specific pathways.”MiroBio’s lead investigational antibody is in Phase 1 clinical trials.

Two of the other acquired companies, ChemoCentryx and Global Blood Therapeutics, have arsenals that include approved small-molecule drugs to treat inflammatory disorders and sickle cell disease, respectively.

ChemoCentryx’s avacopan, marketed as Tavneos, treats autoimmune diseases that involve inflammation in small blood vessels. Global Blood’s voxelotor, sold as Oxbryta, is a reversible covalent drug that binds to hemoglobin to increase its oxygen affinity. Tavneos netted sales of $5.4 million in the first quarter of 2022, while Oxbryta brought in $55.2 million.

The shopping spree is more evidence that an acquisition drought has ended in the biotech sector, says Daniel Chancellor, a consulting director at Citeline, a provider of pharmaceutical business intelligence.

The drought was part of a wider slowdown in biotech. Venture capital investment surged in 2020 and early 2021, but investors began to fear overvaluation, and the sector fell into a slump. The silver lining has been lower company valuations, which translate to cheaper acquisition price tags. Pfizer’s purchase of Biohaven Pharmaceuticals in May was the first in a string of purchases across the industry that marked the end of the dry spell.

Valuations have gone down, which might make deals a bit more attractive.
Daniel Chancellor, consulting director, Citeline

“We’re seeing this market correction,” Chancellor says. “Valuations have gone down, which might make deals a bit more attractive.”

Behemoths like Pfizer profited handsomely during the pandemic, so they’re well positioned to snap up targets like Global Blood Therapeutics. According to Chancellor, Pfizer’s priority is to springboard off massive revenue gains from its COVID-19 vaccine and antiviral pill. While not risk-free, acquisitions bring in new sales much faster than does developing new compounds from scratch, he says.


This story was updated on Aug. 18, 2022, to add the missing words “Early August has” to the first sentence.



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