Deal Watch | Issue Seventy Nine | January 2017
MEDIUS DEAL WATCH January 2017 Ring out the old, ring in the new! 2017 arrived bringing with it the poli cal uncertainty from 2016. With the incoming US President’s PR machine in full flow we are drowning in a deluge of unbelievable and extraordinary headlines. But for business, in reality there is no more clarity as to what exactly Brexit means for pharma plus the threat that the new US President will bring pressure to bear on US drug prices and the possible revoca on of Obamacare in part, if not in full. In addi on, early press coverage suggests that there may be an introduc on of a bidding process to bring down the cost of drugs. So, with the recent Chinese New Year, the ancient curse springs to mind, may you live in interes ng mes! However there seems to be no deterrent to the deal makers, January was a bumper month with 25 deals coming in with headline values >$100m and no fewer than nine with headline value deals over a billion dollars. The change in the US poli cal regime may bring an opportunity for some tax reforms but this will, if it comes, be too late for J&J which heads the January DW table spending its overseas dollars on the acquisi on of Actelion for an all cash deal of $30bn (30 mes price to es mated 2018 earnings). Pipping Sanofi to the post, the acquisi on brings a high margin rare disease por olio at the cost of $280 per share represen ng a 23% premium. Please contact us for details about our Client Deal Watch data are available to support www.medius‐associates.com 1
specific services. www.medius‐associates.com your benchmarking and valua ons. Deal Watch | Issue Seventy Nine | January 2017
The acquisi on excludes the R&D por olio which Actelion had spun out into a new standalone company. J&J will hold an ini al 16% stake in this new business with rights to an addi onal 16% plus an op on on ACT‐132577, which is being developed for resistant hypertension (in phase 2 development). In Scotland, the first foot to cross a threshold a er midnight will predict the next year’s fortune. New Year First Footers bear tradi onal gi s such as a loaf for the kitchen, drink for the head of the family and coal to light the fire. Interes ngly 2016 had opened with Shire’s announcement that the Baxalta acquisi on was going ahead resul ng in one of the year’s biggest headlines with its final value of $32bn. And, besides the $30bn Actelion acquisi on, 2017 has had a great start with Takeda making good on last year’s promise to spend some of its £15bn war chest with the acquisi on of Ariad Pharmaceu cals. With an enterprise value of $5.2bn this acquisi on brings access to Iclusig (pona nib), approved for chronic myeloid leukaemia (CML) and acute lymphoblas c leukaemia (ALL), as well as briga nib in phase 2 for lung cancer. Iclusig sales are forecast to reach between $170m and $180m. Takeda is paying $24 per share in cash, a 75% share price premium. The deal is expected to close by the end of February. It proved to be a very busy month for Takeda with the company paying $35m to PvP Biologics for KumaMax for coeliac disease which is in preclinical development. The deal terms include an op on a ached to buy the company, further terms were not disclosed. Using a similar structure, Takeda also announced a collabora on with possible future acquisi on of Maverick which focuses on next‐genera on T‐cell cancer research. With a headline value of $125m this includes an upfront, op on, equity and R&D funding. But it was not all inward traffic with the company announcing a global collabora on with Ovid to jointly develop and commercialise Takeda’s selec ve CH24H inhibitor TAK‐935 for the treatment of rare paediatric epilepsies. Under the agreement there is an equal share of costs and profits. What goes around, comes around The appe te for immuno‐oncology (IO) has survived well into 2017 with Servier closing the biggest IO headline deal in January with Pieris for $1.7bn for ex US rights to several bispecific checkpoint inhibitors. The lead is PS‐332 which is in preclinical development with up to seven addi onal programmes being able to be added in at a later date. Also, hot off the block was Amgen with the purchase of Imma cs’ next‐genera on, T‐cell engaging bispecific immunotherapies. Paying $30m upfront, each programme has a poten al value of $500m reaching a headline value of more than $1bn in total. This builds on Amgen’s agreement with Xencor for its XmAb bispecific technology pla orm signed up in 2015. If the old year goes out like a lion, the New Year will come in like a lamb This month saw BMS/Ono reach an agreement with Merck & Co in their patent dispute over Keytruda (pembrolizumab) therefore avoiding a court appearance scheduled for later in the year. With an immediate ini al payment of $625m, the se lement includes a royalty of 6.5% (due from Jan 1 2017 to Dec 31 2023) and a lower royalty of 2.5% (from Jan 1, 2024 to Dec 31, 2026). In a similar vein, Forward Pharma and Biogen also reached a se lement agreement over the Tecfidera patent dispute by closing an irrevocable licence valued at $1.25bn. www.medius‐associates.com 2
Deal Watch | Issue Seventy Nine | January 2017
Headline ($m) Licensor/ Acquired Licensee/ Acquirer Deal type Product Actelion J&J Company acquisi on Rare diseases, op on to R&D pipeline 30,000 Ariad Pharma Takeda Company acquisi on Oncology por olio including iclusig and briga nib 5,200 Assembly Biosciences Allergan ve coli s (ABI‐M201) and Exclusive global licence 2 pc candidates for ulcera
Crohn's disease plus 2 compounds for IBS 3,050 Pieris Pharma Servier Exclusive licence outside USA PRS 332 PD‐1‐targe ng bispecific checkpoint inhibitor and 4 other candidates 1,700 Ionis | Akcea Novar s Exclusive op on to licence AKCEA‐APOCIII‐LRx for heart failure 1,600 Valeant L'Oreal Divestment CeraVe AcneFree AMBI 1,300 Forward Pharma Biogen Patent se lement Tecfidera (dimethyl fumarate) 1,250 Merrimack Pharma Ipsen Acquisi on ‐ asset| product|por olio Onivyde irinotecan liposome injec on 1,025 Imma cs Amgen Licence / joint development Next‐genera on, T‐cell engaging bispecific immunotherapies 1,000 CoLucid Lilly Company acquisi on Lasmiditan for the acute treatment of migraine 960 Valeant Sanpower Group Divestment Dendreon equity interest 820 Delinia Celgene Company acquisi on DEL 106 new IL‐2 mutein Fc fusion protein designed to preferen ally up‐regulate regulatory T‐cells 775 BMS | Ono Merck & Co Patent se lement PD‐1 an body Keytruda (pembrolizumab) 625 Momenta CSL Licence M230 immunomodulator of Fc receptors 600 ImmuNext Sanofi Exclusive worldwide licence INX‐021, a pc CD40L mAb in autoimmune disorders 500 Pala n Technologies AMAG Pharma Exclusive licence for N. Rekynda (bremelano de) for sexual disorder p3 America Abzena Not disclosed Licence Domain Therapeu cs Merck KGaA Research collabora on, Next genera on adenosine receptor programme licence Kite Pharma Daiichi Sankyo Licence Cellular cancer therapy axicabtagene ciloleucel (KTE‐C19) 250 Vertex Merck KGaA Collabora on VX 970 VX 803 and 2 others ATR inhibitors 230 Cymabay Kowa Exclusive licence in the Arhalofenate for gout p3 ready
US Azaya Cytori Company acquisi on Kite Pharma ThioBridge ADC linker technology 465 300 258 205 ATI 0918 liposomal nanopar cle technology pla orm 160 Fosun Pharma Forma on of a JV Autologous T‐cell therapies in cancer 140 Generis Aurobindo Company acquisi on Generic products 135 Maverick Takeda Op on to acquire T‐cell pla orm 125 www.medius‐associates.com 3
Deal Watch | Issue Seventy Nine | January 2017
Sharon Finch, the founder of Medius, has extensive business development experience working both in industry and for over 20 years with Medius. Sharon works primarily on partner searches and transac ons. She is the Editor of the Business Development and Licensing Journal and is the Course Director for the PLG MSc in Pharmaceu cal Business Development & Licensing run by the University of Manchester. Begin the New Year square with every man Valeant has recently been focused on paying off some of its $30bn debt, so it was not surprising to see the company announce some divestments bringing in around $2.1bn in cash. With sales of $168m, L'Oréal acquired three skin care brands CeraVe, AcneFree and AMBI for $1.3bn cash. Bringing in an addi onal $819.9m in cash, Valeant also sold its equity interest in Dendreon (manufacturer of Provenge, a personalised immunotherapy) to the Sanpower Group. Dendreon had only been acquired in February 2015 from bankruptcy for $495m (reported in DW issue no 56). Informa on, informa on, informa on Although not featuring in January’s DW table there is a huge amount of ac vity in the digital/ telemedicine space which is interes ng to note. One common feature is that the financial terms are rarely disclosed but we do expect to see more news flow as companies seek partnerships as the way forward to maintain compe ve advantage in key therapeu c areas. Clearly the major companies such as GSK and Sanofi are able to form joint ventures with companies such as Verily to access digital technologies but smaller and mid cap businesses are keeping up with the trend. Companies Scope of partnership EarlySense/ American Well Partnership for EarlySense con nuous monitoring and American Well's consumer telehealth service Amwell IBM Watson Health/ Illumina Partnership to integrate Watson for Genomics into Illumina’s BaseSpace Sequence Hub and tumour sequencing process to Merck KGaA / Palan r Novo Nordisk/
Glooko Combining Merck’s research with other bioinforma cs for pa ent sub group iden fica on Non‐exclusive collabora on to deliver jointly‐developed and branded digital health solu ons for people with diabetes As you sow, so shall you reap The use of op ons is remaining widespread as noted in the Novar s deal with Ionis and Akcea. Paying up to $1.6bn the agreement covers an exclusive op on to license two inves ga onal cardiovascular products expected to reduce cardiovascular risk in pa ents with elevated lipoproteins. The deal includes an upfront payment of $75m plus a $100m equity investment with agreement to invest a further $50m within 18 months, as well as up to $1.4bn in milestones. So, all in all a buoyant start to the deal making in 2017, it should prove to be an interes ng year. T: +44 (0) 20 8654 6040
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