“Golden Age of Discovery” nets USD 50 billion in deals from four companies

March 10, 2015 ctheodoropulos

“This has been a busy group,” said Mark Archer, the Global Head of Business Development for inVentiv Health, as he introduced the prestigious panel of fellow BD executives for the session at BIO-Europe Spring® entitled, simply enough, “Major Deal Transactions.”

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“Between them, our panelists accounted for 30 deals over the past year representing over USD 50 billion in valuation,” he said.

Philippe Lopes-Fernandes set the tone for the hour-long discussion when he remarked on a trend in dealmaking that he said showed “a resurgent interest in science.”

“We are seeing innovation in the deal,” said the Head of Global Licensing and Business Development for Merck Serono. “We have seen deals based on exciting data, probably the best things we have seen for the past 20 years, data that suggest the possibility that one day we may even be able to cure disease.”

Kevin Sin, Senior Director for Business Development with Genentech, agreed that “it is a very exciting time for dealmaking. There is such a palpable feel coming from the biology, that there is a benefit that could translate to patients.”

We are seeing clinical data that shows in oncology in particular, he said, “a durable treatment response. When you see this sort of inflection point in data, it is hard not to get excited. And we see a lot of dealmaking trending toward early stage. The days of waiting for Phase II data with everyone else are over. We need to look at these programs earlier. And we are asking if we can extend the benefits, enhance or increase the response for patients. This has led to a lot of excitement scientifically in biologically driven combinations.”

“If there is anything that shows how much excitement there is, you may have seen a preclinical stage deal for Flexus Biosciences that was valued at USD 800 million. It shows the potential the scientific community and the investor communities see, which is a way of addressing a disease in ways we could not do before,” he said.

Pascal Touchon, VP for Scientific Cooperation and Business Development at Servier Laboratories, agreed that taking risk with preclinical assets was the significant trend that has emerged over the last 18 months. He cited the deal his company made with Cellectis to develop and commercialize novel product candidates targeting leukemia and solid tumors. Servier made an upfront payment of USD 10 million and up to USD 140 million for each of the six product candidates potentially developed, spread over various milestones in the development and commercialization phases.

“At the time Cellectis value was just above EUR 18 million and now it is more than EUR 900 million,” he said. “It went very fast in just 12 months because there is excitement, but at the same time there is a scientific advance, and though there is nothing in the clinic, we were able to take the risk, and now Pfizer has jumped on the bandwagon with Novartis.”

Ian Dukes

Iain Dukes

The Senior VP for Business Development and Licensing with Merck Sharp & Dohme (MSD), Iain Dukes said, “We are in a golden age of discovery with a lot of excitement around innovative mechanisms and genetically defined targets that are delivering clinical results.”

Highlighting a pair of deals each valued at USD 8 billion that MSD transacted last year, he shared strategic insights that drove the decisions.

With Idenix, he said, “Our thinking here was that by acquiring investigational Hepatitis C virus candidates with good attributes and combining it with our existing assets we could get to a point where we have a triple therapy with no general contraindications, such that we could convert a treatment in the hepatology market to the primary care market. In doing that we automatically increase the number of patients we could then address. Here, then, price becomes less of an issue in increasing the market by tenfold. It also is about getting to patients, because right now the hepatologists are the logjam in terms of getting these very important therapies to these patients.

“Our other major deal was with Cubist Pharmaceuticals and here what we were looking at is the hospital-based infection environment where Cubist is developing meaningful drugs that fit very well with our hospital franchise,” he said.

Dukes also injected a cautionary note in what was called a “frothy” environment for dealmaking.

“Turning to immuno-oncology, with all these innovations and mechanisms, at some point the payers are going to have to figure out how to pay for all of this,” he noted. “Every other week a new target comes out in the checkpoint arena, which looks interesting and generates excitement. Taking a longer view, one would ask how many of these combinations can realistically be moved forward, and how many can be expected to have a reasonable reimbursement. We haven’t quite figured out how all that is going to work.”

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