While New Yorkers have their famed duo of bagels and lox, Eli Lilly is making its own combo with its $8B purchase of Loxo Oncology. The cancer-focused biopharma just recently had its first US approval in Vitrakvi, which can target multiple cancers by focusing on tumor biomarkers instead of the affected tissue area. The deal cements Eli Lilly’s presence in the oncology space, but follows the trend noted in a recent report by EY that says drugmakers have been spending too much on stock buybacks and bolt-on acquisitions instead of megamergers like Takeda/Shire and BMS/Celgene. Loxo stockholders should be pretty happy with the deal—when Loxo shares went public in 2014 they cost $13, and Eli Lilly will be purchasing them for $235 a pop.
Bristol-Myers Squibb has started off the 2019 season of M&A with a huge proposal: buying the biotech Celgene in a $74B deal. If completed, it would be the largest pharma acquisition to date, blowing the previous-record holder—Takeda’s pending Shire acquisition for $62B—out of the water. Both companies are oncology giants, specifically in immunology and blood cancers, but BMS will be acquiring a decent amount of risk with the purchase. Celgene’s market cap has gone down $70B in the past 14 months partly due to poor financial forecasts for when the company’s top drug Revlimid loses patent protection. BMS likely hopes to make that up with six possible product launches in the next few years. Okay, enough numbers. To round out this New Jersey-focused blurb, here’s some New Jersey would-you-rathers.
Japan and Ireland have a history of mutual investment and medicine exchange, and an upcoming merger could be the latest and greatest chapter. Osaka-based Takeda announced in May that it would acquire the Dublin-based Shire for $62B, and it looks like its last regulatory hurdle with the EU will be cleared. Unlike these hurdles. Officials are slightly concerned about an IND in Shire’s pipeline that could treat Crohn’s Disease, which would overlap with Takeda’s biggest selling drug Entyvio. But Takeda’s happy to lose that investigational drug if it means closing the deal. After all, the new company would instantly become a global top 10 drugmaker. Keep your head on a swivel though, a few Takeda investors are still against the deal, citing the considerable debt Takeda will have to take on to make the purchase.
We’ve done a full 360 on Zika. In early 2016, the WHO declared Zika to be a “Public Health Emergency of International Concern.” Less than two years later we’re just injecting it into brains willy-nilly to see what it does. To be fair, it does seem to kill glioblastomas pretty effectively, so we’ll give mad scientists a pass this time. Still, the Zika crisis did seem to peter out quickly in the Americas, at least quicker than US government investors expected. Without any real epidemic threat from the virus forthcoming, funding for the government and Sanofi’s vaccine development partnership has dried up. There are still two vaccine candidates from GSK and Takeda in development, but the decision has been criticized as short-sighted.
Takeda has joined the ranks of increasingly price-conscious pharmaceutical companies that have pledged to keep their drug price hikes to “reasonable” levels in the coming year (see: Allergan, AbbVie, Novo Nordisk).The Japanese-based company recently announced it would maintain single-digit price increases, and added that its pricing model has been fair for years. However, it’s probably safe to assume that the announcement has something to do with Trump’s not-so-subtle cease and desist alarms to pharma about their rising drug prices. Certainly a push for drastic measures, but consider: in the wake of a sudden call for price lowering also comes a federal push to decrease pharma regulations, cut taxes, and speed up approval timelines for drug products. Looks like industry gods taketh away, then giveth right back.
Takeda is building a Bbidge, both literally and figuratively. Their newest venture, Bridge Medicines, combines the innovative research from three leading US universities and Takeda’s checkbook along with the capital of two healthcare VC firms. The three universities, all part of the Tri-Institutional Therapeutics Discovery Institute (Tri-I TDI), discover new therapies that oftentimes don’t make it to clinical trials. This is where Bridge Medicines comes in. The most promising projects will now have resources and funding to expedite the development process to move from proof-of-concept to in-human clinical trials. Tip of the hat to Takeda on this one as they are then positioned to call dibs on the most appealing ones.