Prescribed Reading: Bolt-on deals for Sanofi
A weekly guide to the goings-on in the biopharma industry.
Biopharma is a complex, rapidly evolving industry that is highly regulated and closely watched — and that means there is constant news. Here's a closer look at the clinical trials, M&A, cool science and regulations that are driving the industry this week.
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Mergers & analysis
While Sanofi has yet to ink a major deal that will refill its pipeline or provide it with a new blockbuster to build around, the French drugmaker has made a few small deals that will at least bolster some of its other promising areas. Most recently, Sanofi paid just $26 million upfront to develop nanobody-based drugs for immune-mediated inflammatory diseases with European biotech Ablynx.
This deal follows the $650 million the company paid earlier this month to pick up Protein Sciences, a vaccine drugmaker that will help it pursue non-egg-based flu vaccines — further building out its successful Sanofi Pasteur vaccine business. Meanwhile, Ablynx builds on the recent success that Sanofi has had through its specialty drug unit Sanofi Genzyme and its partnership with big biotech Regeneron.
Sanofi has taken a similar strategy in the past; the company made a slew of small acquisitions in the diabetes space to compensate for falling behind in the market.
Elsewhere, companies have been hammering out deals in the courtroom. After months of arbitration, Exelixis and Roche's Genentech came to a new commercialization agreement for their partnership around Cotellic (cobimetinib), which is used in combination with Zelboraf (vemurafenib), Plexxikon and Genentech's BRAF inhibitor for the treatment of melanoma.
Sarepta and BioMarin also finally found some common ground for the patent estate related to the DMD exon-skipping drugs they were both developing. The deal gives Sarepta more freedom around its already approved Exondys 51, while BioMarin gets some new cash.
Just about the most exciting news this week came out of Vertex Pharmaceuticals, which saw its stock jump 20% on positive data for its triple combination therapies for cystic fibrosis. The company once splashed on to the market with a promising hepatitis C therapy called Incivek, but Gilead Sciences virtually wiped Vertex off the map when it brought a cure to market for the disease.
Vertex is the success story that you don't hear too often in biotech — after the devastation of Incivek, the company has managed to change gears and build a successful cystic fibrosis franchise. The recent data has Jefferies analysts projecting that the company's peak cystic fibrosis revenues could double from about $3 billion to as high as $7 billion.
As is typical with this type of big clinical news, the rumor mill is now churning, suggesting Vertex is ripe for a takeout. Yet, the lack of big M&A we've seen this year would suggest that speculation about deals is just that —speculation.
Meanwhile, Ironwood Pharmaceuticals announced positive data for its heartburn medication. The market is currently dominated by over-the-counter drugs, but Ironwood has had a history of success in bringing new drugs to market for conditions that are typically treated by OTC meds. While investors didn't seem sold on the data, the company remains optimistic.
The Food and Drug Administration gave the go-ahead this week for Merck & Co.'s follow-on biologic of Sanofi's Lantus (insulin glargine). While a lawsuit from Sanofi will likely keep the drug off the market for more than two years, this decision spells trouble for the French drugmaker.
Luxdana Nexvue won't be the first follow-on biologic of Lantus. Sanofi has its own version and Eli Lilly & Co. came out with their insulin glargine Basaglar late last year.
The FDA also gave the OK for Puma Biotechnology's Nerlynx (neratinib) to prevent recurrence of HER2-overexpressed/amplified breast cancer after treatment with Herceptin (trastuzumab). The announcement surprised both investors and the company, which didn't expect such a broad label due to the high occurence of diarrhea in patients taking the drug.
The agency was busy this week, also giving the green light to the fourth Sovaldi-based hepatitis C drug from Gilead. While the big biotech's hep C franchise has been waning, it is still bringing in billions annually and the new approval will help it target a set of patients that have not been successfully treated with other regimends.
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