JP Morgan 2018 - our essential take on the key stories from pharma’s biggest investor conference

The build up: Celgene acquiring JAK inhibitor revivalist Impact Biomedicines, while questions have been asked of Sanofi’s decision making - both past and present.

Celgene makes an Impact

The 36th annual JP Morgan Healthcare conference kicks off in San Francisco today (January 8)  - read our preview here - and discussion around potential M&A activity is expected to feature heavily.

Celgene has got the ball rolling, confirming on Sunday it is to acquire Impact Biomedicines in a deal worth $1.1 billion upfront, potentially rising to a cost of $7 billion dependent on regulatory and commercial milestones being achieved.

Impact Biomedicines was only formed in 2016 and is pursuing development of the oral, small molecule JAK2 inhibitor fedratinib for the treatment of myelofibrosis and polycythemia vera. The company only came out of stealth mode in October with a venture round of $22.5 million - see ViewPoints: With a startup picking up its cast-offs, Sanofi has a second chance to make an oncology Impact.

Celgene can afford a $1 billion punt on Impact Biomedicines, with fedratinib a potential best-in-class competitor to Incyte and Novartis’ Jakafi, which is rapidly nearing blockbuster status. But this deal is unlikely to provide the credibility boost for management that analysts have been craving for.

In a note to investors, analysts at Barclays wrote "even if approved in 2019 (best case given currently available data), fedratinib would have to compete against a drug with a similar mechanism and already successfully commercialised. We note that this drug could be used in patients resistant or intolerant to Jakafi, however, we would have preferred to see business development with a commercial-ready asset in a space with a higher-unmet need or novel mechanism of action."

Analysts at Jefferies were more positive, noting "we think this looks like a good deal because it provides a synergistic new $1 billion-plus revenue growth opportunity for Celgene and back-ended payments which are smart."

Sanofi scrutinised

Any deal at the figures being quoted would more than validate the move by John Hood, Impact Biomedicines’ CEO, to revive fedratinib following Sanofi’s decision to shelve the compound back in 2013, when a number of patients treated with the drug were thought to have developed Wernike’s encephalopathy. Data presented at ASH provides strong evidence this perceived toxicity issue was not real.

With Sanofi having acquired fedratinib via the earlier $635 million buyout of TargeGen, its decision to quickly abandon the compound in light of Celgene’s deal becomes even more questionable (the French company did at least take a stake in Impact Biomedicines in exchange for rights to fedratinib).

Sanofi then came under further scrutiny from prominent investor Brad Loncar yesterday following confirmation that its collaboration with Alnylam Pharmaceuticals has been amended. As part of a strategic restructuring, Alnylam will obtain global development and commercialisation rights to its investigational RNAi therapeutics programmes for the treatment of ATTR amyloidosis, including patisiran and ALN-TTRsc02. Sanofi will receive royalties based on net sales of these ATTR amyloidosis products and will obtain global development and commercialisation rights to fitusiran, an investigational RNAi therapeutic, currently in development for the treatment of people with haemophilia A and B.

Loncar tweeted "so far the two big news items of the day have Sanofi’s incompetence written on them. Gave away a valuable drug to Impact and just did the same with Alnylam."

Loncar may have a point. One key opinion leader in the haemophilia space noted to FirstWord last year that question marks remain over fitusiran’s safety profile and dosing complexities may limit its use to niche settings.

"I am a fan of the siRNA technology, and Alnylam is a clear leader in this field, but I don’t really see how this will be a big market in the long term. The data looks reasonable so far but they are going to have to compete against alternatives like antibodies that block some of the same proteins but do so more directly, and more importantly will be far easier to dose," said Mark Kay, professor of paediatrics and genetics and director of the Program in Human Gene Therapy at Stanford University.

For further analysis see - KOL Views Results: New modalities for haemophilia – some more disruptive than others – are closer to reality than many realise, says leading expert.

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