Friday Five - The pharma week in review (12 December 2019)

Merck & Co. and Sanofi bolt-on in oncology

Merck & Co. and Sanofi both announced deals this week to acquire biotech companies thatwhich are developing experimental new cancer treatments; in each instance paying more than double their market value.

The acquisitions - Merck said it would buy ArQule for $2.7 billion and Sanofi announced it will acquire Synthorx for $2.5 billion - are reflective of continued strong momentum for industry consolidation, with the value of M&A in 2019 approaching $350 million.

Merck'’s acquisition of ArQule coincided with the latter announcing promising data for its lead asset at the annual meeting of the American Hematology Association (ASH), prompting some speculation that additional bidders could emerge (see ViewPoints: Merck & Co.'s move for ArQule ups the competitive stakes for Eli Lilly).

Read our analysis of the key themes behind this year'’s biggest M&A deals here.

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Hudson unveils his vision for Sanofi

Sanofi'’s deal for Synthorx was a pre-cursor to its capital markets day on Tuesday where new CEO Paul Hudson mapped out the company's future growth strategy.

Notable disclosures include Sanofi'’s decision to pull back from developing new cardiovascular and diabetes treatments, and aspirations that annual Dupixent revenues could peak at around $10 billion.

Highlighting a decision not to launch the experimental diabetes treatment efpeglenatide as evidence of new found ruthlessness, Sanofi will no longer compete with '‘me-too'’ products, said Hudson, noting that in this specific instance the company would be able to compete with other GLP-1 agonists, but was unlikely to gain market share of a sufficient level to warrant the cost of commercialisation. Sanofi had previously not been focused enough in making these types of decisions, said the CEO.

Analysis – ViewPoints: Hudson looks to learn from lessons past to right the Sanofi ship

Analysts may take some convincing that Sanofi can quickly become the type of disruptive player that Hudson aspires to. Late- stage pipeline compounds were highlighted, but in the short to medium term it would seem Dupixent living up to heightened expectations may be the most obvious way of keeping investors onside.

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AstraZeneca, Daiichi Sankyo impress with breast cancer data

AstraZeneca caught some flak earlier this year when it shelled out $1.35 billion up front to in-license Daiichi Sankyo's antibody drug conjugate (ADC) trastuzumab deruxtecan, selling shares to fund the deal. Upping the stakes further, trastuzumab deruxtecan is being initially developed for the treatment of HER2-positive breast cancer, a market dominated to such an extent by Roche that would-be competitors have at best become mere footnotes in the treatment algorithm.

New results presented at the San Antonio Breast Cancer Symposium (SABCS), showing impressive response rates in heavily pre-treated patients, will increase investor confidence that AstraZeneca'’s bold move will pay off.

Our analysis can be found here.  

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ASH round-up

CAR-T therapies look well placed to reach the market for the treatment of multiple myeloma in the next 12 months with bluebird bio and Bristol-Myers Squibb'’s bb2121, along with and Johnson & Johnson'’s JNJ-4528, both of which target BCMA, leading the way.

Impressive data for the latter was presented at ASH showing a 100% response rate, although both products also face future competitive threats from '‘off the shelf'’ bi-specific antibodies.

Bi-specifics potentially offer a competitive threat to CAR-T therapies in other indications too, with Roche presenting compelling early-stage results for mosunetuzumab as a later-line treatment in diffuse large B-cell lymphoma. (DLBCL)

Analysis: ViewPoints: ASH19- Bristol-Myers Squibb nears its CAR-T reckoning

ViewPoints: ASH19- Johnson & Johnson brings the CARTITUDE

ViewPoints: ASH19- Roche and Regeneron put bispecifics in the spotlight for NHL

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Hat tip to Hahn

On a busy day on Capitol Hill, the US Senate confirmed Stephen Hahn as FDA commissioner, ending any speculation over a protracted nomination process in the face of a divided Congress and ongoing impeachment hearings. In fact, the Senate vote had few dissenters, with minimal discussion of the industry conflicts that were a talking point ahead of the confirmation of prior commissioner Scott Gottlieb.

The wheels were undoubtedly greased by Hahn's relatively vacant public sector history, with a shortage of public statements on regulatory sticking points for lawmakers to latch on to.  (See ViewPoints: Clock already ticking for Hahn at top FDA post)

Adjacent to Hahn's proceeding, the House of Representatives was voting on sweeping legislation to address drug pricing in the US. The bill has faced a wall of dissent from industry, which has speculated that the price control measures included in the bill would result in fewer new drugs reaching development or approval milestones. Nonetheless, HR 3 passed the Democrat-controlled House with a 230- to 192 vote.

The bill ins unlikely to gain a whiff of traction in the Senate; however, some elements could be incorporated into the Senate's own take on addressing drug pricing.

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