Could a shareholder revolt doom the planned marriage of Bristol-Myers Squibb and Celgene? Analysts have hinted at the possibility since the two companies shook hands in January, but the threat became real this week.
Bristol (NYSE: [[ticker:BMY]]) and Celgene (NASDAQ: [[ticker:CELG]]) have campaignned heavily, starting with a joint presentation by their CEOs at the J.P. Morgan Healthcare Conference in January. Celgene drugs that should come to market the next two years will unlock $15 billion in annual revenue. The combined company will be a “scientific powerhouse,” the CEOs said, and is set up for long-term success.
Bristol investors were immediately wary, sending shares down 10 percent when the deal was announced. The skepticism now has a voice. This week, Wellington Management, Bristol’s largest institutional investor with an 8 percent share, and activist investor Starboard Value both vowed to vote against the deal. Celgene’s pipeline carries too much risk; there are better strategic moves for Bristol to make, Wellington said. This is an “ill-advised transaction,” Starboard added. As of late Thursday, Celgene shares had dropped more than 7.5 percent for the week.
All this pushback doesn’t kill one of the biggest potential biopharma deals in recent memory. But it does set the stage for a tense few weeks leading to a shareholder vote on April 12. We’ll get to that story and much more in this week’s roundup.
LEGAL DRAMA
In a Senate hearing Tuesday, seven top pharma executives argued that the industry, not the government, should be responsible for controlling high drug prices. But they were in favor of regulation to rein in the secretive rebates negotiated by insurers and their drug-purchasing agents.
—Safe to say that more Americans were watching a different Congressional hearing the next day, as President Trump’s former lawyer and self-described “fixer” Michael Cohen spoke publicly about the president. There was one revelation specific to the biopharma world: Cohen said he had more contacts with Novartis, which paid Cohen $1.2 million as a consultant right after Trump’s election, than previously divulged. Here’s more from STAT.
—An FDA advisory panel dealt a blow to Karyopharm Therapeutics’s (NASDAQ: [[ticker:KPTI]]) plan to seek a speedy nod for its multiple myeloma drug selinexor. The panel voted 8 to 5 to delay a decision until the company wraps up a Phase 3 study later this year. The FDA questioned selinexor’s effectiveness in briefing documents last week.
—The FDA issued a warning letter to patients and physicians following reports from Pfizer (NYSE: [[ticker:PFE]]) of higher rates of pulmonary embolism and death for rheumatoid arthritis patients taking a 10 mg dose of its autoimmune drug tofacitinib (Xeljanz) in a post-approval safety study.
—The long-running patent dispute between Amgen (NASDAQ: [[ticker:AMGN]]) and rival Regeneron Pharmaceuticals (NASDAQ: [[ticker:REGN]]) over their rival anti-cholesterol PCSK9 inhibitors dragged on this week. A Delaware jury upheld the validity of two patents covering Amgen’s evolocumab (Repatha). Regeneron and partner Sanofi (NYSE: [[ticker:SNY]]) plan to challenge the verdict, but the decision “opens the door” to the possibility that their competing drug alirocumab (Praluent) could be removed from the market, wrote RBC Capital Markets analyst Kennen MacKay.
—Esperion Therapeutics (NASDAQ: [[ticker:ESPR]]) filed for FDA approval of two cholesterol lowering drugs: bempedoic acid, and a combo of bempedoic acid and the Merck drug ezetimibe (Zetia).
HIGH ROLLERS
—Wellington Management and Starboard Value LP both said publicly they plan to vote against Bristol Myers Squibb’s planned $74 billion buyout of Celgene. Bristol defended its rationale for the combination, and its shares climbed more than 2 percent on the news.
—Roche agreed to acquire Spark Therapeutics (NASDAQ: [[ticker:ONCE]]) for $4.8 billion, the latest signal that major pharmaceutical companies are willing to bet on the future of gene therapy despite significant commercial uncertainties. Spark developed Luxturna, the first gene therapy to win U.S. approval, and has experimental treatments for hemophilia and other diseases in human testing.
—Danaher will pay $21.4 billion for the biopharma business of GE Life Sciences, which sells instruments, software, and other tools that support research and drug manufacturing.
—Blackstone Life Sciences, the biopharma arm of Blackstone Group, made its first investment: $250 million into a startup called Anthos Therapeutics that will develop a heart drug acquired from Novartis.
—Montreal-based Clementia Pharmaceuticals (NASDAQ: [[ticker:CMTA]]) and its rare disease drug pipeline are set to be acquired by French pharmaceutical company Ipsen in a $1.3 billion deal.
—Sarepta Therapeutics (NASDAQ: [[ticker:SRPT]]) continued to broaden its gene therapy business. First it exercised an option to buy gene therapy startup and Nationwide Children’s Hospital spinout Myonexus Therapeutics for $165 million. Then it revealed encouraging early data from one of its five programs for Limb-girdle muscular dystrophy. Shares climbed 10 percent.
NEW STARTS & CASH GRABS
—Maze Therapeutics of San Francisco emerged from secrecy with $191 million from Third Rock Ventures, Arch Venture Partners, and others, to try to develop drugs that mimic the action of so-called modifier genes, which blunt the effect of disease-causing genes.
—Woburn, MA-based Abpro inked a partnership with China-based NJCTTQ that pays the company $60 million in near-term research funding to develop bi-specific antibodies for cancer immunotherapies.
—Oyster Point Pharmaceuticals, of Princeton, NJ, raised a $93 million Series B to bring an experimental nasal spray for dry eye disease—one that coaxes the body into producing its own natural tears—into Phase 3 clinical testing. CEO Jeffrey Nau told Xconomy the company aims to complement artificial tears and drugs like cyclosporine (Restasis), at a minimum. Ideally the spray would obviate the need for them.
—Ironwood Pharmaceuticals (NASDAQ: [[ticker:IRWD]]) spin-off Cylcerion Therapeutics secured $175 million from current Ironwood shareholders, new investors, and members of Cyclerion management. The cash should give the new company at least two years of financial runway.
—Suzhou, China-based Gracell Biotechnologies completed an $85M Series B to back trials testing its immune cell gene therapies.
—Novartis paid Akcea Therapeutics (NASDAQ: [[ticker:AKCA]]) $150 million to grab rights to TKJ230, a Phase 3-ready drug developed to treat certain patients at risk for heart disease.
—Axial Biotherapeutics raised a $25 million Series B to bring microbiome drugs for Parkinson’s disease and autism into clinical testing.
ON THE IPO TRAIL
—Kaleido Biosciences (NASDAQ: [[ticker:KLDO]]) raised $75 million in a downsized IPO that will fund clinical tests of its lead microbiome drug, a treatment for urea cycle disorder.
—CStone Pharmaceuticals raised approximately $285 million in its stock market debut on the Hong Kong Stock Exchange. The China-based company will use the cash to develop its cancer-focused drug pipeline.
—French pharmaceutical company Genfit, which is expecting Phase 3 data soon for its experimental treatment for the liver disease NASH, filed for a listing of new shares on the Nasdaq.
NEW STUDIES & DATA DUMPS
—Scientists at Weill Cornell Medicine in New York are planning what is likely the first human test of a gene therapy for Alzheimer’s disease. Technology Review has the story.
—CRISPR Therapeutics and Vertex Pharmaceuticals announced that they dosed the first patient in a European study of CTX-001, a CRISPR gene editing therapeutic for blood diseases—and that the first patient in a separate U.S. trial should receive treatment in mid-2019. CRISPR shares climbed about 11 percent this week.
—AstraZeneca and Merck reported that their PARP inhibitor olaparib (Lynparza) met its main goal in a Phase 3 study in pancreatic cancer. The drug is the first of its kind to succeed in a late-stage study beyond ovarian or breast cancer. The study could help broaden the reach of PARP inhibitors, which have struggled commercially, but the companies have not disclosed the details.
—ResVax, its experimental vaccine for respiratory syncytial virus from Novavax (NASDAQ: [[ticker:NVAX]]), failed a Phase 3 trial. Novavax pointed to encouraging signs and still plans to discuss the data with regulators, but investors weren’t buying it. Shares fell 678 percent.
—ImmunoGen’s (NASDAQ: [[ticker:IMGN]]) antibody-drug conjugate for ovarian cancer, mirvetuximab soravtansine, couldn’t beat chemotherapy in a Phase 3 study. Shares plummeted 50 percent.
PEOPLE ON THE MOVE
—Michael Pehl resigned as CEO of Immunomedics (NASDAQ: [[ticker:IMMU]]) a month after the FDA rejected the company’s breast cancer drug.
—Steve Reed stepped down as president and CEO of Seattle’s Infectious Disease Research Institute to lead two spinout companies.
Frank Vinluan and Alex Lash contributed to this report.
