- Biogen Inc. will hand $1 billion in cash to Ionis Pharmaceuticals Inc., betting in a wide-ranging research deal that the biotech, which developed the rare disease drug Spinraza, can discover other blockbuster medicines like it.
- Over the next two years, Biogen hopes the expanded collaboration with Ionis will result in as many as seven new drug candidates for neurological diseases and help diversify a pipeline weighted toward higher-risk targets like Alzheimer's.
- Per the new deal, Biogen will pay Ionis $375 million upfront and invest $625 million in Ionis common stock valued at a 19% premium to Thursday's closing price. In return, Biogen will have the option to license antisense drug compounds found by Ionis.
Having found one soon-to-be blockbuster drug by partnering with Ionis, Biogen hopes to strike biotech gold again.
Spinraza (nusinersen), which was developed by the two companies and approved in late 2016 for spinal muscular atrophy, has quickly become a commercial success. Last year, Biogen recorded $884 million in global sales of Spinraza, and investors see the drug as a key component of the company's future growth.
"The transformational success of Spinraza has given us increased confidence that antisense therapeutics have the potential to address many diseases of the central nervous system that were previously untreatable," said Michael Ehlers, head of R&D at Biogen, in a April 20 statement.
Already partnered on two other early-stage drugs besides Spinraza, Biogen and Ionis crafted an expanded 10-year collaboration aimed at discovering new treatments for neurological diseases with few current treatments. Dementia, neuromuscular diseases and movement disorders will be a focus, as will eye-related diseases and neuropsychiatry.
Jefferies analyst Michael Yee called the deal a "long-term good" in an April 20 research note, while acknowledging that many on Wall Street will still look for more meaningful M&A activity from Biogen.
Biogen's relative lack of action on that front contrasts with stepped-up dealmaking from its large-cap biotech peers Gilead Sciences Inc. and Celgene Corp. More recently, Swiss pharma Novartis AG bought AveXis Inc. and its experimental gene therapy for spinal muscular atrophy (SMA) for $8.7 billion.
AveXis was floated by some on Wall Street as a potential takeover target for Biogen, which could have bought the smaller biotech to consolidate its position in SMA.
Biogen management previously indicated they didn't expect to dive into major M&A, saying instead the focus would be in the company's "sweet spot" of developing earlier assets.
Increased competition to the company's multiple sclerosis business and a pipeline that's headlined by a risky bet on Alzheimer's, however, limit how patient Biogen can be. Investors may not wait around.