- Bioverativ, the hemophilia-focused spin off from Biogen, is picking up rare disease drugmaker True North Therapeutics for what could be upwards of $825 million. But the transaction's substantial price tag isn't stopping Bioverativ from looking for additional targets.
- The deal hands True North $400 million upfront, which will be financed with cash and debt. The small biotech, which develops antibody-based therapies, could also receive up to $425 million in potential milestones for its main asset TNT009, a drug under investigation for a few uncommon conditions, including the blood disorder cold agglutinin disease (CAD).
- "What we lacked is a clinical pipeline; and this lead candidate, TNT009, is ready — close to ready — to go into a registrational study. So this really fills a gap for us as well, and it fits perfectly with our strategy as a company," Bioverativ CEO John Cox said in an interview, adding that his company isn't opposed to more dealmaking, particularly if the target is an early-stage, rare disease asset.
Bioverativ came onto the scene earlier this year with two marketed hemophilia products at its disposal: Eloctate (antihemophilic factor recombinant) and Alprolix (coagulation factor IX recombinant). But with its entire pipeline in pre-clinical and discovery stages, the company faced pressure to add candidates that are either in or ready for human testing.
The hemophilia A drug BIVV001 would have presumably met that goal in the coming months, as Bioverativ expects it to enter Phase 1 testing in the second half of this year. The addition of TNT009, however, speeds up the process.
Deal talks between the two companies got serious a few weeks back, according to Cox, who said his understanding was that True North was mulling the idea of going public before agreeing to be acquired.
"My sense is that when True North was looking for somebody to work with with this type of product, we were the right company to take it to the next level," he said. "They could see the kind of qualities we have as an organization and that we would care about this asset."
True North deferred BioPharma Dive's request for comment to Bioverativ.
TNT009 aims to inhibit C1s, an enzyme that plays a role in a piece of the immune system called the classical complement pathway. The idea is the drug can help CAD patients by preventing their immune cells from destroying red blood cells. TNT009 received Orphan Drug Designation in late 2016, and Breakthrough Designation this month.
The deal with True North also gives Bioverativ ownership of TNT020, a discovery-stage medication that also targets the C1s enzyme.
Biovarativ will likely take on some debt to pay for the transaction, according to a May 23 note from Jefferies analyst Eun Yang. As of March 31, the company had about $359 million in cash and cash equivalents, according to its most recent 10-Q filing with the Securities and Exchange Commission.
But debt isn't dissuading the company from further acquisitions.
"We have plenty of dry powder, we can take on some debt, and if levering the company with some debt makes sense for real thoughtful deals, we can do that," Cox said. "We're not desperate to do another deal, but we certainly are in a position to do more deals if the opportunities are ripe and on point."
True North has also been relatively well-financed since its founding in 2013. Between December 2014 and October 2016, the South San Francisco, Calif.-based drug developer raised $142 million through four rounds of financing. What's more, Bioverativ anticipates it will get about $50 million in tax assets from the target, not including the benefits reaped from an orphan tax credit, according to the Jefferies note.