Category Archives: Acquisitions

Buy-out sets sights on glucose responsive insulin

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

Diabetes specialists Novo Nordisk have acquired Ziylo, a University of Bristol spin-out company.

Based at Unit DX science incubator in Bristol, Ziylo has been pioneering the use of its platform technology – synthetic glucose binding molecules – for therapeutic and diagnostic applications.

The acquisition gives Novo Nordisk full rights to Ziylo’s glucose binding molecule platform to develop glucose responsive insulins. The development of glucose responsive insulins is a key strategic area for Novo Nordisk in its effort to develop this next generation of insulin which would lead to a safer and more effective insulin therapy.

“Novo Nordisk is the ideal company to maximise the potential of the Ziylo glucose binding molecules in glucose responsive insulins and diabetes applications, and it brings hope of a truly groundbreaking treatment to diabetes patients,” said Dr Harry Destecroix, chief executive officer and co-founder of Ziylo. “Novo Nordisk is the leader in the diabetes field, with deep clinical development and regulatory expertise and an established commercial infrastructure to deliver important new therapies to patients.”

Ziylo’s glucose binding molecules are synthetic molecules that were designed by Professor Anthony Davis at the University of Bristol. These stable, synthetic molecules exhibit an unprecedented selectivity to glucose in complex environments such as blood. The combination of this technology with state-of-the-art insulin engineering pioneered by Novo Nordisk aims to develop the world’s first glucose responsive insulin and transform the treatment of diabetes.

Novo Nordisk acquires all shares in Ziylo for an upfront payment and earn-outs with contingent milestone payments. Total payments under the agreement could ultimately exceed 800 million dollars upon the achievement of certain development, regulatory and sales milestones by Novo Nordisk.

SOURCE: www.labnews.co.uk/news

Takeda could sell Shire eye care business after merger

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

Takeda could be considering selling Shire’s eye care business after their $62 billion merger next year to cut debts, according to press reports.

Citing sources close to the matter Bloomberg said the Shire’s Xiidra eye drug is among the potential divestments being assessed by Takeda.

Another possible sell-off could be Shire’s Natpara medicine, used to control low blood calcium related to parathyroid hormone, according to Bloomberg’s anonymous sources.

Takeda could raise between $4 billion and $5 billion depending on the assets that get sold, according to the sources.

Discussions are at an early stage and Takeda has not made a firm decision about what to sell off, according to Bloomberg.

There has also been interest in Takeda’s OTC business, according to the report, but Takeda’s CEO Christophe Weber told Japan’s Nikkan Kogyo newspaper in July that the company does not intend to sell its OTC operations in the island nation.

The rationale behind the merger is to reshape Takeda so that it has a suite of rare disease drugs, which Shire has assembled through its own acquisition spree over the last few years.

Takeda already has a $31 billion loan facility in place to help pay for the acquisition, the largest borrowing ever by a Japanese company for an acquisition.

Bloomberg said that neither Shire or Takeda’s representatives were prepared to comment.

The deal is set to close in the first half of 2019 if approved by shareholders, if it obtains regulatory approvals in more than 20 markets and if approved at an extraordinary general meeting of shareholders.

Competition regulators in the US and Brazil have already backed the deal, and Takeda has asked for clearance in China, Canada and Mexico.

Markets where Takeda still needs clearance include Japan and the EU – and Bloomberg noted that the merger could face tougher scrutiny in the EU where reviews assess how pharma companies compete in each of its 28 nations.

Another possible spanner in the works could come from the influential family that originally founded Takeda, who are fighting the deal along with a group of other shareholders.

Last week, Kazu Takeda, from the family group, reportedly said the takeover could be “disastrous” and risked undoing the company’s corporate philosophy called “Takeda-ism” – this states that profit comes from making people happy.

SOURCE: www.pharmaphorum.com/news

Boehringer Ingelheim joins the crowd and goes all-in on oncolytic viruses, buying ViraTherapeutics in $244M deal

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Boehringer Ingelheim decided 3 years ago it that would take an active role in fostering the oncolytics virus biotech ViraTherapeutics.

The German company’s venture arm invested in the fledgling’s biotech’s tiny $4 million A round in the summer of 2015. BI execs came back with a $230 million discovery deal — building in a buyout option — and then added a second program. And this morning they’re going all in, buying the company in a deal valued at $244 million.

BI is keeping the company — a spinout of Austria’s Medical University of Innsbruck — right where it is, adding the group and the regional connections they have on campus as a subsidiary as they look to jump into the clinic with a lead program.

Boehringer first tied up with ViraTherapeutics just months ahead of Amgen’s landmark approval of T-Vec, the world’s first marketed oncolytic virus. And since then the field has exploded with new research projects as dozens of new players brewed up to beat the pioneer.

Earlier this year J&J executed one of its classic billion-dollar deals to buy BeneVir. Merck’s R&D chief Roger Perlmutter — who steered the T-Vec deal at Amgen — bagged Viralytics for $394 million. A recent study from the Cancer Research Institute found 69 OVs in clinical development and another 95 in a preclinical program.

What’s the big deal?

Oncolytic viruses are the Trojan horse of immuno-oncology. The viruses are designed to infect cancer cells, invading the disease, and then exploding them, which subsequently signals the immune system to mount an attack on the survivors. There’s a clear clinical track record showing how they work. And now a host of rivals like PsiOxus and many, many others believe that systemic administration will do a better job.

ViraTherapeutics execs — led by MorphoSys vet Heinz Schwer — have also been busy engineering an OV therapy that they believe can do a better job of initially evading detection by the immune system, avoiding triggering any antibodies and theoretically making it possible to do repeat administrations.

Not surprisingly, BI also plans to whip up a pipeline of combination approaches, arming their OV with cancer drugs that can both amp up the immune system attack and charge directly at cancer cells.

SOURCE: www.endpts.com

Demographic shifts create biotechnology opportunities

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

Ageing populations which are increasingly wealthy means opportunities for biotech and healthcare investors.

Globally, populations are rapidly growing, ageing and becoming richer. It is estimated that within 25 years, the number of over 65s in Asia will exceed the total populations of the eurozone and US combined.

This progression, accompanied by declining birth rates in the developed world, is creating a growing demographic imbalance. Simultaneously, incomes are rising in developing economies, so emerging market consumers are increasingly entering the global middle class.

When populations become wealthier, healthcare spending infallibly increases and pockets of new healthcare needs (in response to lifestyle changes) often emerge. The consequences of these demographic shifts – both current and emerging – include far greater pressures on healthcare and a greater reliance on the private sector to provide care solutions.

Against this backdrop, biotechnology (or biotech) businesses can minimise the strain of (and theoretically profit from) global demographic adjustment. The biotech sector is broad-based, but primarily seeks to improve healthcare and treat disease through clinical research and drug development. Crucially for long-term investors, the sector also benefits from the relatively non-discretionary nature of demand for its products and services.

We have been taking advantage of these opportunities since 2016, when we began investing in an actively managed healthcare and biotech investment trust. We see high growth potential and strong structural tailwinds in the industry, and have since added to our exposure by investing in a passive exchange-traded fund (ETF) tracking the Nasdaq Biotechnology Index.

Having fallen sharply between late 2014 and 2016, the Nasdaq Biotechnology Index has been tracking steadily upward ever since. Despite its considerable growth potential and solid performance since 2017, the sector continues to trade at relatively attractive valuations; since the 2014-2016 sell-off, the sector’s price-to-earnings ratio has languished below that of the broader market for the first time in history.

As any excess capital is generally reinvested into further research and development, the majority of returns from the biotech sector are driven by mergers and acquisition activity and – crucially – the number of new drug approvals in a given year. The latter is positive news for investors, as approvals are on track for near-record levels in 2018, backing up strong years in 2015 and 2017.

For the sector’s world leaders in the US, biotech activities are tightly regulated by the Food and Drugs Agency (FDA). However, in a characteristically controversial manoeuvre, President Trump recently found himself on the biotech frontline when signing the ‘Right-to-try’ law – legislation permitting terminally ill patients to bypass the FDA to gain faster, unhindered access to experimental treatments. While not universally supported, and not without ethical constraints, the act should widen the pipeline of information on the effectiveness of potential new treatments. In turn, this could accelerate decision making over the fate of these new drugs. 

As with all sectors, biotech has its weaknesses. The most commonly highlighted risks are the binary nature of research results and the subsequent price movements in individual companies. More recently, political pressure to address fears around drug pricing is also mounting.

Mindful of these risks, but also seeking to harness biotech’s many compelling opportunities, our diversified positioning aims to limit the portfolios’ exposure to stock-specific risk, while allowing access to the benefits of powerful demographic shifts.

SOURCE: www.moneyobserver.com/demographic-shifts-create-biotechnology-opportunities

Bristol diabetes spin-out company acquired by Novo Nordisk

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

The global healthcare company has acquired all of the shares of the Bristol supramolecular chemistry company, of which total payments under the agreement could ultimately exceed $800 million.

Novo Nordisk has acquired all of the shares of Ziylo, a University of Bristol spin-out company based at the Unit DX science incubator in Bristol, UK.

Ziylo has been pioneering the use of its platform technology – synthetic glucose binding molecules – for therapeutic and diagnostic applications.

The acquisition gives Novo Nordisk full rights to Ziylo’s glucose binding molecule platform to develop glucose responsive insulins.

The development of glucose responsive insulins is a key strategic area for Novo Nordisk in its effort to develop this next generation of insulin, which would lead to a safer and more effective insulin therapy.

A glucose responsive insulin would help eliminate the risk of hypoglycaemia, which is the main risk associated with insulin therapy and one of the main barriers for achieving optimal glucose control. Thus, a glucose responsive insulin could also lead to better metabolic control and overall reduce the burden of diabetes for people living with the disease.

Prior to closing of the acquisition, certain research activities have been spun out of Ziylo to a new company, Carbometrics. Carbometrics has entered into a research collaboration with Novo Nordisk to assist with ongoing optimisation of glucose binding molecules for use in glucose responsive insulins.

Carbometrics has licenced rights to develop non-therapeutic applications of glucose binding molecules, with a focus on developing continuous glucose monitoring applications.

Ziylo’s glucose binding molecules are synthetic molecules that were designed by Professor Anthony Davis at the University of Bristol. These stable, synthetic molecules exhibit an unprecedented selectivity to glucose in complex environments such as blood.

The combination of this technology with engineered insulin pioneered by Novo Nordisk aspires to realise the world’s first glucose responsive insulin and transform the treatment of diabetes.

“We believe the glucose binding molecules discovered by the Ziylo team together with Novo Nordisk world-class insulin capabilities have the potential to lead to the development of glucose responsive insulins, which we hope can remove the risk of hypoglycaemia and ensure optimal glucose control for people with diabetes,” said Marcus Schindler, senior VP, Global Drug Discovery, Novo Nordisk.

“Novo Nordisk is the ideal company to maximise the potential of the Ziylo glucose binding molecules in glucose responsive insulins and diabetes applications, and it brings hope of a truly groundbreaking treatment to diabetes patients,” said Dr Harry Destecroix, CEO and cofounder of Ziylo.

Novo Nordisk has acquired all shares in Ziylo for an upfront payment and earn-outs with contingent milestone payments. Total payments under the agreement could ultimately exceed $800 million upon the achievement of certain development, regulatory and sales milestones by Novo Nordisk.

SOURCE: www.manufacturingchemist.com/news

Eli Lilly buys ARMO BioSciences for $1.6bn

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

Eli Lilly has announced that it will acquire immuno-oncology company ARMO BioSciences, including the company’s lead immuno-oncology product pegilodecakin, in an all-cash transaction of $50 per share, or approximately $1.6bn.

The addition of promising cancer drug candidate pegilodecakin will bolster Lilly’s immune-oncology portfolio. The drug is currently undergoing Phase III testing in pancreatic cancer as well as earlier-Phase trials in lung and renal cell cancer, melanoma and other solid tumour types. It has demonstrated clinical benefit as a single agent and also in combination with both chemotherapy and checkpoint inhibitor therapy across several tumour types.

ARMO also has a number of other immuno-oncology product candidates in various stages of pre-clinical development.

Lilly Oncology global development and medical affairs senior vice-president Dr Levi Garraway said: “As we develop our immuno-oncology portfolio, Lilly will pursue medicines that use the body’s immune system in new ways to treat cancer. We believe that pegilodecakin has a unique immunologic mechanism of action that could eventually allow physicians to offer new hope for many cancer patients.”

ARMO BioSciences is a late-stage immuno-oncology company focused on developing product candidates that use the immune system of cancer patients to recognise and eradicate tumours. The company went public just months ago in January of this year.

ARMO BioSciences president and CEO Dr Peter Van Vlasselaer said: “ARMO is proud of the work we have done to advance the study of immunotherapies and of the development of pegilodecakin to date. Given the resources that Lilly, a leader in oncology R&D, can bring to bear to maximise the value of pegilodecakin and the rest of the ARMO pipeline, we believe it is in the best interest of ARMO, our stockholders and the patients we serve, to execute this transaction.”

With the total immuno-oncology market is expected to be worth $34 billion by 2024, pharmaceutical companies, including Lilly, are keen to invest in this cutting-edge therapeutic area that is already making a significant impact on oncology.

The announcement comes just weeks after the company recruited Dr Leena Gandhi to oversee the development of Lilly’s immuno-oncology portfolio.

The transaction is expected to close by the end of the second quarter of 2018.

SOURCE: www.pharmaceutical-technology.com/news

Merck KGaA finds consumer health buyer in P&G for €3.4bn

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

Merck KGaA has successfully found a buyer for its healthcare unit, after Proctor & Gamble announced that it was prepared to part with €3.4 billion to gain the rights to a portfolio that includes Seven Seas and Bion3 supplements.

To push the deal through, it is assumed that Merck had to climb down slightly on its valuation of the business, which it had initially pegged at around €4 billion. However, now that the deal has gone through, the company will be able to focus on its pharmaceutical business and potentially use the extra cash to grow its pipeline.

The company’s decision not to play hardball on price may well have been influenced by watching Pfizer’s failure to offload its on healthcare business.

Pfizer had a firm valuation of the business at $20 billion, a figure that all of the companies interested in taking on the business were disinclined to match.

GSK, for instance, took a look at the possibility before deciding to spend $13 billion buying Novartis out of their joint healthcare venture.

While P&G had actually previously shown interest in Pfizer’s unit, which is three times the size of Merck’s, but did not want to pay more than $15 billion for it.

All of which meant that Pfizer has been unable to find a buyer and has spent a large amount of time for no productive end – clearly Merck did not want this to be the case in its own sale.

“We like the steady, broad-based growth of the OTC Health Care market and are pleased to add the Consumer Health portfolio and people of Merck KGaA, Darmstadt, Germany, to the P&G family,” said David Taylor, Chairman of the Board, President and Chief Executive Officer.

P&G’s acquisition will see 3,300 Merck employees move over as part of the transaction, which is expected to close during the 2018/2019 financial year.

The steady growth Taylor references is the fact that Merck has achieved 6% growth for the last two years. However, Merck wants to pull away from this sector because pharmaceuticals can offer for greater return – though with an equivalent risk of any potential drug failures, as it is has found after being stung by trial failures with Bavencio.

SOURCE: www.pharmafile.com/news/517106

Lundbeck takes risk on Parkinson’s treatment, €905m on table

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

CNS’ treatments are notoriously risky, especially those that are still at an early stage; however, Lundbeck has decided to take a calculated risk on Prexton Therapeutics and its sole candidate for Parkinson’s.

Lundbeck will buy out the company for €100 million up-front, with a further €805 million locked into development, regulatory and sales milestones.

The compound, foliglurax, is currently undergoing Phase 2 testing, after developing promising data in pre-clinical, animal models and a good safety profile in a Phase 1 trial. The data was enough to secure €29 million in a Series B financing round just over a year ago.

Foliglurax is being lined up as an adjunctive therapy for patients already taking levodopa, as the latter drug becomes less effective and side-effects being to take their toll on patients, such as compromised motor function. The aim for the treatment is that it is able to manage resting tremors, muscle rigidity and uncontrolled movements.

Rather than wait for the results from its Phase 2 trial, Prexton decided to take the cash whilst it was on the table – given how unpredictable CNS treatment results can be, this seems a sensible option.

As for Lundbeck, it managed to scoop the treatment before results emerge – it is playing with the exact same risk, but the upside could be a successful Phase 2, that’s already underway, and having got in early on the candidate before big players started to circle.

“By acquiring Prexton, Lundbeck will obtain global rights to foliglurax, an exciting first-in-class compound, and gain full control of the asset,” said Anders Götzsche, interim CEO and CFO at Lundbeck. “Foliglurax addresses high unmet needs with its potential indication in Parkinson’s fitting perfectly within Lundbeck’s core areas and this treatment option also appears to be highly interesting for patients, physicians and payers.”

SOURCE: www.pharmafile.com/news/516824

Sanofi, Evotec in major infectious disease R&D transfer and license deal

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Big Pharma Sanofi and German CRO-biotech drug discovery hybrid Evotec are penning a deal that will see Sanofi license out a host of infectious disease assets to the biotech, with 100 staffers also moving into its R&D engine.

Sanofi is paying a one-time, upfront fee of €60 million ($74 million) to Evotec, a small sum, but one backed up with a promise to “provide significant further long-term funding to ensure support and progression of the portfolio,” although exact financial details were not shared.

The deal drills down like this: Sanofi will license most of its infectious disease (ID) research and early-stage portfolio (around 10 assets all-told) and move this unit, with around Sanofi 100 staffers alongside it, into Evotec (although this does not include the French pharma’s vaccine R&D unit).

Evotec, which does its own research and also relies heavily on external collaborations with biopharmas and academic biomedical research, will run this “open innovation platform” near Lyon, France, where Sanofi Pasteur is HQ’d.

Sanofi holds on to certain option rights on the development, manufacturing, and commercialization of anti-infective products and will “continue to be involved in infectious disease through its vaccines research and development and its global health programs,” it says in a statement.

The focus of the Evotec drug discovery will be on “new mode-of-action antimicrobials,” the pair say.

Werner Lanthaler, Ph.D., CEO of Evotec, said: “Since the acquisition of Euprotec (UK) in 2014, Evotec has had a significant strategic interest and demonstrated expertise in infectious diseases research, with an ambition to grow and become the drug discovery and development leader in this space together with its partners.

“We are pleased to be working and expanding our strategic relationship with Sanofi, which has a long history in providing novel anti-infective agents to markets globally. Finding a way to motivate more public funding and academic initiatives for the progress of novel anti-infectives on Evotec’s platform will be a key success factor for this initiative.”

The deal is still being talked over, but should be done in the coming months.

Evotec already has a series of deals with the likes of Eli Lilly, Tesaro, Oxford University, and even has its own spin-out in the form of Topas Therapeutics.

Elias Zerhouni, M.D., president of global R&D for Sanofi, adds: “Research in the field of anti-infectives is an area where building critical mass through partnering is particularly important. This new French-based open innovation center will benefit from the high-quality science ecosystem. Evotec is a trusted partner in drug discovery and has the ambition and capacity to become a real leader in the fight against infectious diseases.”

This also comes as Sanofi continues to retool its R&D, getting back into cancer as well as blood disorders via its $11.6 billion deal for Biogen spin-out Bioverativ.

SOURCE: www.fiercebiotech.com/biotech

How can pharma navigate the complex marketing landscape?

Wax Selection – Leaders in Pharma, Biotech & MedTech Recruitment

The first chapter of pharma’s commercial evolution takes us from the insatiable sales-drive of the 1980s to the present, highly complex marketing landscape.

It is easy to forget that our competitive industry still has 80-90% gross margins and, as a consequence, its traditional commercial model is driven by sales growth, rather than worrying about costs.

Under most circumstances, incremental sales drive incremental profit. Within the affiliates this is obvious, and country managers have often resisted attempts by corporate counterparts to take a centralised approach to sales and marketing, claiming their country’s commercial ecosystem is unique and not amenable to meddling.

Of course, the modern pharma company will also have to conduct market access, medical education and phase IV studies within its affiliates, but the reality is that most affiliate activity is focused on sales. For large pharma companies the sales and marketing budget usually beats R&D budgets by 1.7 times, and this is becoming increasingly difficult to justify.

Rise of primary care dominance

Throughout the 1980s and 90s the focus on sales-driven growth led to the evolution of some very different ways of working within primary care, from co-promotion and co-marketing with embedded local players, to the ‘petal’ system of multiple salesforces detailing overlapping product ranges.

The purpose of these techniques, together with employment of contract sales teams, was a sort of ‘shock and awe’ strategy which swamped the physician with frequent visits about particular products. The competitive response was usually swift and commensurate, resulting in a commercial arms race between players within a hotly contested therapeutic area.

This was known as the ‘share of voice’ model, and when applied to large primary care categories, it drove top line growth so successfully that governments and institutional payers were forced to find a response to escalating drug bills around the world.

Backlash from health technology

This response varied from country to country, but has taken two main forms; the Health Technology Assessment response and the consolidated payer response. Throughout the 1990s and 2000s, in the UK (NICE), much of Europe, Australia and parts of Asia, there has been systematic developing of a process that assesses whether a product represents value for society.

Much of the health economics work is shared among countries, and pricing comparisons made between the same product in different countries are routine. The benchmarks for the monetary value of a healthy human being are the subject of debate, but are necessary to make budgetary choices in a system without unlimited resources.

The consolidated payer model, operating in the US through pharmacy benefit managers such as Express Scripts, relies on large payers exerting pressure on manufacturers for rebates, with some undifferentiated product portfolios having to rebate as much as 50% of their gross price.

The impact of health technology assessments can be seen today, manifesting itself in pricing pressure, therapeutic substitution, a diminution of decision-making by physicians and a conscious shift towards products with a confirmed medical need. A decline in R&D productivity, however, has not made this process easy.

Dead end: Primary care hits a wall

Many commentators blame the decline in R&D productivity for the steep fall in product approvals through the 2000s but, in reality, there have been several forces at work.

The rise in genomics, together with high-speed screening techniques, led to a belief that chemical libraries could be screened against unprecedented targets and that optimised drug candidates would flood through the discovery phase into phase I trials.

The sharp product rise in the early clinical phases then came to a shuddering halt during phase II ‘proof of concept’ studies, when large numbers of clinical failures unveiled the reality – there is no short cut to understanding disease biology.

As research cul de sacs were explored, a squeeze on primary care products began in the form of price pressure from above and greater safety demands from below. As a consequence, and aided by the rise in technology, a rapid increase in the proportion of newly-approved, biological in origin drugs commenced.

Monoclonal antibodies, vaccines, enzyme replacement therapy and other therapeutic peptides, aided by insatiable demand for insulin, developed strong sales and completely changed the nature of commercial interfacing with physicians.

Biologicals change the commercial dynamic

The pressure on primary care products, together with the impact of the patent cliff in 2012/13, have combined to drive sales of primary care products into stagnation. Much of industry downsizing, particularly within commercial operations, has been in response to this.

Perhaps most merger and acquisition activity within pharma also has its origins in this relentless pressure on primary care sales and the need to reload the pipeline quickly with biologicals and specialties.

The success of biologicals and other specialties, such as oral cancer drugs, in terms of both approval and sales, has required the industry to change its commercial emphasis. The huge traditional focus on primary care or family doctors has changed to specialists, and their support workers within a secondary care or hospital environment.

The increased complexity of the specialty sell, sometimes involving multiple decision-makers, formulary approval, health economic arguments, companion diagnostics and performance-related reimbursement, has required a much smaller, but more skilled group of people to interface with the healthcare network.

Many companies have yet to find the necessary mix of skills within their workforce and are still working under the old assumptions that spending on promotional activities can remain as high as it used to be under traditional models. They do so at their peril. Check out Part 2in the next issue, as promotional resources and modern data come under intense scrutiny.

SOURCE: www.pharmafield.co.uk/features