Billion-dollar acquisitions, troubled waters for some biotech’s, and a prosperous outlook for others
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Sumitovant + Myovant
Thermo Fisher + Binding Site Group
Astellas & Taysha
About the Show
Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.
Welcome to Life Science Today, your source for stories, insights, and trends across the life science industry. I’m your host, Dr. Noah Goodson. This week, billion-dollar acquisitions, troubled waters for some biotech’s, and a prosperous outlook for others.
The views expressed on Life Science Today are those of the host and guests. They do not necessarily reflect the opinions of any organizations with which they are affiliated.
Myovant Sell for $2.9B to Another Vant
Myovant has agreed to sell to Sumitomo Pharma for $2.9B. Earlier in October they rejected a $2.5B bid by the same company. The original offer supposedly deeply undervalued the company, but the 16% $400K raise seems to have covered the gap. While this deal pays off the minority stakeholders, Sumitomo already held over 50% of Myovant’s stock and has invested nearly $600M, including a $200M loan back in 2020. In reality, Sumitomo is only paying $1.7B for the outstanding shares. The structure of the deal places Myovant as a wholy owned subsidiary of a subsidiary of Sumitomo called Sumitovant.
The dea l comes as Myovant’s leading therapy Regulolix sold as both Orgovyx and Myfembree continues to see success. It has now been approved in prostate cancer, heavy menstrual bleeding from uterine fibroids, and pain associated with endometriosis, with a phase III study ongoing for pregnancy prevention. On top of their direct success, they are partnered with Pfizer for strong continued commercial deployment under the Sumitovant banner. You might think with all the Vant-i-ness in this nomenclature that the parent company Roivant would be at the center of this deal. But to review a littler history here, Roivant was the founder of Myovant. Myovant, along with a number of other companies were spun out in 2019 as part of the deal with Sumitomo. Sumitovant was created out of that deal and already holds another of the vants, Urovant under t heir banner. So in a sense this deal is a shuffling of existing Sumitomo companies that were not previously fully owned but that were all separated from the central hub Roivant. So lots of “vants” in the name but no Roivant at the center of this deal.
Thermo Fisher Makes $2.6B Acquisition
After a couple of stunning years in 2020 and 2021 and then a massive $17B acquisition of the CRO PPD, Thermo Fisher Scientific has been relatively quiet consolidating and repositioning for a post-pandemic world. This week they signaled a recognition on the continued priority that niche diagnostic tools are going to play in the coming decade with the acquisition of the Binding Site Group. The company was on track to deliver approximately $220M in revenue in 2022, so the $2.6B acquisition represents a significant premium on future value and integrated value within the larger Thermo Fisher family. The key trend to pay attention to is that as biopharma continues to focus on rare diseases and personalized medicine therapeutics particularly in oncology, the drivers for associated diagnostic tools will remain priced a premium for those companies who can capture a market share.
Astellas and Taysha Make a $50M Deal
A true rumble of recession passed through the biotech world as Astellas Pharma purchased rights to Taysha Therapeutics Rett Syndrome gene therapy and a similar program for GAN for just $50M. The deal is a purchase of 15% of Taysha’s stock and set off rumors of a potential acquisition down the line. Taysha has been struggling with falling stock dropping 94% value since mid-2021 and no clear reprieve in sight. This $50M infusion could be the sign of a way out for a company struggling with a long-term pipeline and no meaningful mechanism of achieving the kind of capital investment needed to reach their goals. To double down on the chance for capital Taysha also announced a $30M common stock offering. Despite these asset inputs and cut costs Taysha still spent $33M in Q2, with a mere $66M in the bank this placed them on tenuous pathway, even with potential loans to drawn down. This new cash infusion likely pushes the cliff out 6-12 months but with wary investors and low stock prices, Astellas buy-in may look more like circling vultures than a lifeline. I would anticipate further significant developments here by Q3 next year at the latest.
Agios Royalties Sell for $132M
In a similar harbinger of cash-strapped biotechs, Agios has sold their rights to 5% royalties on the next sales of TIBSOVO for $131.8M. The oral therapy which is approved to treat several oncology conditions was sold as part of the $1.8B deal with Servier last year to hand of Agios’ oncology portfolio. Now, Sagard Healthcare Partners is effectively investing in future gains on that portfolio while Agios takes in more cash for today to put into their pipeline, including the current significant clinical investment in their leading therapy Mitapivat – a PK activator. While Agios has a bit more cash-positive position than Taysha, the burned $92M in Q2 alone and I suspect they were dropping down close to going below $1B in cash and cash equivalents. While it might seems easy to cut this bleed, the current stage of their clinical program and the low income from the approved indications for Mitapivat place Agios in a critical position to bridge this gap with as much capital as possible. Their position is clearly to have cash now over royalties trickling in over the next few years.
Vaxcyte $690M Raise + Clinical Data
Lest I paint the picture that the outlook is all bleak for biotech’s – it’s not. Like the market as a whole it is tumultuous. In the same week as the moves by Taysha and Agios, another biotech completed an outsized public offering raising an additional $690M. This move by the vaccine developer Vaxcyte comes as the company released data showing their phase 1/2 study for their 24-valent pneumococcal conjugate vaccine was extremely promising. The vaccine is safe with high tolerability. Now the question, does it really work? Well the initial data are promising showing impact on critical targeted strains. As Vaxcyte looks to launch a pivotal phase III trial in the back half of 2023 , this critical capital raise will see the company on their way. Plus, it doesn’t hurt that on top of the cash influx, stock values themselves shot up over 100%.
Vaccine organizations are probably still seeing a bit of a COVID boost over other biotechs. I do want to point out that other organizations are working on pneumonia vaccines. This doesn’t mean they don’t have some unique technology and promising data, but they are also not the only horse in the race with some pharma incumbents still in play it will be interesting to see how the next couple of years play out for Vaxctye’s approach to bacterial vaccines.
Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at LifeScienceTodayPodcast.com. If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.