Week of April 17, 2017 | Vol. 6, Issue 14
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FDA Rejects Eli Lilly and Incyte Rheumatoid-Arthritis Drug
U.S. drug agency wants the companies to provide more clinical data to determine the most appropriate doses
Eli Lilly and
Incyte
Corp. on Friday said the U.S. Food and Drug Administration didn't approve their new drug application for a rheumatoid arthritis treatment that some analysts estimate could generate more than $2 billion in annual sales.
The companies said they received a so-called complete response letter, which details the agency's reasons for rejection, asking for more clinical data to determine the most appropriate doses and clarify safety concerns for baricitinib, a once-daily oral medication for the treatment of moderate-to-severe rheumatoid arthritis.
Lilly and Incyte said the timing of resubmitting an application seeking the drug's approval will be based on further discussions with U.S. regulators.
"We are disappointed with this action," said Christi Shaw, president of Lilly Bio-Medicines. "We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the U.S."
The FDA's decision
is a blow to Lilly and Incyte
, and it comes a few months after European Union granted regulatory approval on the drug, whose brand name is Olumiant.
Olumiant is taken as a pill and is seen as a competitor to strong-selling injected rheumatoid arthritis drugs such as
AbbVie
Inc.'s Humira.
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Debt-laden Teva, looking for cash, weighs $2B women's health sale: report
In the wake of CEO Erez Vigodman's departure, Teva execs have been reviewing the company's business.
The company is weighing a sale of its women's health unit, according to a Bloomberg report seen by Israeli newspaper Globes. The generics giant has brought on Morgan Stanley to help it find a buyer, and it's looking to start the sale process early next month, the news service said. Such a transaction could drum up about $2 billion, which could take a bite out of Teva's hefty debt load.
A Teva spokeswoman said the company does not comment on market rumors.
Teva picked up the division from Merck KGaA's Merck Serono for €265 million in 2010. But a few years ago, the company put the kibosh on R&D there to channel funds toward other projects, Globes
notes.
Teva announced it was launching a review back in February, alongside the news of Vigodman's
exit
. Analysts quickly started debating whether the company should split up, stoked by interim CEO Yitzhak Peterburg's promise that "we are here to fix what is not working" and "we will leave no stone unturned."
Some industry-watchers, though, have wondered why Teva would embark on a review before landing a new chief exec-and argued that the order of operations might deter worthy candidates.
"What does this say about how much strategic input a new CEO will have? More to the point, how is this going to help recruit a top global executive?" RBC Capital Markets analyst Randall Stanicky wrote to investors at the time "To us this is a concern that Teva's 'search' will ultimately revert to a local executive who is not a known leader in global pharma," he added.
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Below are summaries and charts with the past week's transactions from the different healthcare sectors. For a detailed table showing data for each industry transaction click on any of the charts or use the download link above. Total transaction values are provided in USD millions.
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Pharma & Biotech
10 transactions totaling $1,458
million
Supplies, Equipment & Services
14 transactions totaling $257 million
Healthcare IT & Managed Care
3 transactions totaling $34 million
Healthcare Facilities & Distributors
10 transactions totaling $462 million
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Pharma & Biotech
12 private placements totaling $173 million
Supplies, Equipment & Services
12 private placements totaling $319 million
Healthcare IT & Managed Care
5 private placements totaling $107 million
Healthcare Facilities & Distributors
1 private placements totaling $10 million
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Pharma & Biotech
14 public offerings totaling $910 million
Supplies, Equipment & Services
2 public offerings totaling $7 million
Healthcare IT & Managed Care
1 public offering totaling $20 million
Healthcare Facilities & Distributors
2 public offering totaling $400 million
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 Each week, w
e provide updated trading
comps for leading comp
anies from numerous healthcare subsectors.
To the right you will see a high-level breakdown of median revenue and EBITDA multiples for each of the specific subsectors
For a complete trading comp analysis (including the individual equities that comprise the subsectors), click on the table to the right or use the download link from the top of this newsletter.
Note: data reflects prior week close.
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RECENT INDUSTRY HEADLINES
A Sampling of Relevant Industry Headlines from the Last Week
Below are snippets from relevant industry news articles from the past week. For additional information or the article's complete text, click the headline link to view the original publication.
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Bristol-Myers offloads anti-tau, DMD assets to Biogen, Roche for $470M upfront, $615M in milestones
April 13, 2017 -
Fierce Biotech
Bristol-Myers Squibb has
offloaded two neurodegenerative disease programs to Biogen and Roche in separate deals. The licensing deals for the Alzheimer's disease and Duchenne muscular dystrophy (DMD) assets will net Bristol-Myers $470 million upfront, with up to $615 million more in milestones to follow.
Biogen accounts for the lion's share of the cash. The Big Biotech is paying $300 million upfront and up to $410 million in milestones to get its hands on BMS-986168, an anti-tau antibody seen as a treatment for progressive supranuclear palsy (PSP) and Alzheimer's disease. Bristol-Myers bought the asset in its takeover of iPierian. But, having handed over $175 million upfront, committed to up to $550 million more and run three phase 1 trials, Bristol-Myers has decided to sell the candidate.
The deal gives Biogen responsibility for further development of the antibody. Biogen plans to move the asset quickly into phase 2 in PSP, the focus of Bristol-Myers' R&D efforts, and Alzheimer's, the biotech's own area of particular interest.
April 14, 2017 -
Fierce Biotech
U.K.-based CRO Chiltern has put itself up for sale as it continues the bullish M&A run for contract research groups that has seen a host of deals, JVs and mergers over the last 2 years.
This is according to
Reuters, citing anonymous "people familiar with the matter," who say that the company has hired investment bank Jefferies to orchestrate a sale in a deal that could value it at around $1.3 billion.
According to the newswire, "The sale process is in the early stages and will attract interest from private equity firms." The company has not commented on the report.
Midsize CRO Chiltern has been beefing itself up over the years and back in 2015 bought up
Theorem Clinical Research in a move to strengthen its global presence. This comes amid a boom in CRO and biopharma services deals over the past two years, with the biggest coming last October, when the world's largest CRO and one of the biggest healthcare data and consulting firms combined to become one major $19 billion, 50,000-strong company, now known as QuintilesIMS.
And back in February of this year, acquisitive medical testing company LabCorp was also said to be prepared to spend $8 billion on one of the largest CROs in the world, PPD, hot on the heels of it buying up New Jersey-headquartered Covance in 2015 in a deal worth just over $6 billion. This rumor again came from Reuters.
BMS and Pfizer file 16 Eliquis patent lawsuits to waylay generic makers
April 12, 2017 -
Fierce Pharma
Pfizer and Bristol-Myers Squibb are erecting a wall of patent infringement lawsuits that they hope will slow the advance of generic versions of their shared blockbuster Eliquis.
The partners this week filed suit against 13 generic makers, on top of three filed last week,
reports the Delaware Law Weekly, naming companies that include Mylan, Dr. Reddy's Laboratories and Accord Healthcare.
The two have plenty to protect in the stroke and blood clot preventer. It earned BMS about $3.3 billion last year, up nearly 60% from the $1.9 billion earned the year before. Pfizer enjoyed $1.6 billion from the drug.
The anticoagulant is among the top-selling products for both companies, and they have gone to great lengths to protect and promote it. Pfizer spent $174 million on direct-to-consumer advertising for Eliquis last year, ranking it third among the top 20 advertised meds. Eliquis was the third of the next-generation blood thinners to the market, trailing Boehringer Ingelheim's Pradaxa and Johnson & Johnson's Xarelto. It had a very slow start in 2014, worrying analysts who had big expectations for the med. But since then, it has picked up momentum, surpassing Pradaxa in market share.
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As an international, healthcare-focused merchant bank and financial advisory firm, we provide world-class services and capital to middle-market healthcare companies around the globe. We aim to keep our clients well-informed of healthcare news and events. With this additional insight in mind, together, we can recognize trends and opportunities that benefit our clients. We hope that you will reach out to Bourne Partners to help execute your healthcare operational and transactional needs. To learn more about our firm, visit our website or utilize the links below to engage with us on social media.
Sincerely,
The Bourne Partners Team
Bourne Partners
550 South Caldwell Street
Suite 900
Charlotte, NC 28202
704-552-8407
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