Pfizer, Cerevel, Abbott, AstraZeneca + Daiichi Sankyo

Spending that COVID money, brain money, Irish money, and another oncology approval.

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Story References
Pfizer
Cerevel
Abbott
AstraZeneca + Daiichi Sankyo

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. 

Transcript

Introduction

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, spending that COVID money, brain money, Irish money, and another oncology approval. 

Pfizer $5.4B Sickle Cell Deal

In a predictable move, Pfizer has made the $5.4B cash acquisition of Global Blood Therapeutics, a company dedicated to treating Sickle Cell Disease. Their pipeline includes the approved treatment Voxelotor, which is an oral therapy approved in 2019. Last year, sales reached $195M, but Pfizer plans to expand the global footprint and see those numbers rise. Additionally, Global Blood Therapeutic’s pipeline includes the once daily oral GBT601, a potential next-generation of sickle cell disease therapeutics, as well as the monoclonal therapy inclacumab. Pfizer thinks the net portfolio, when approved and run at scale globally could top $3B a year. This also represents another mechanism for Pfizer to safely expand revenue generation and future pipeline, without getting major push-back from regulators. Remember those big acquisitions ($10B, $20B) are consistently getting regulatory pushback.  Even the target, Sickle Cell Disease, has enough competition in pipelines and the market to readily dodge even the hint of anticompetition. For a company flush with billions this is another well targeted acquisition. Whether it ever proves to be worth the price tag will have to wait on the pipeline to see. 

Cerevel Big Raises

Joining the biotech capital raise train, Cerevel Therapeutics has announced plans to raise a combined $554M through $300M convertible senior notes and a $254M common stock offering. The raise comes as the company looks to move its late-stage Parkinson’s asset forward along with seemingly too-wide pipeline of neurological treatments including epilepsy, anxiety, and schizophrenia. They had $531M in the bank at the end of Q2 and burned $127M in the front half of the year, but this raise should bring their coffers up past $1B again. Now there are a couple of ways to look at this raise. One is that they are taking a chance now to raise some money and hedge their bets as they start additional trials next year. The other is that perhaps they are not overly optimistic on what the readout might be for their leading Parkinson’s candidate and are hoping to raise capital now before bad news strikes. Whatever the strategic reason for the raise the market is not thrilled and shares have dropped around 20% at the news, though they remain above their average value across the last 6 months. 

Capital Investments in Ireland

Across 2020-21 there were a ton of new facilities announced in the contract manufacturing space to fill out gaps and prepare for the future of biotech and pharma demand. However, in early 2022 as the market has reset news of major facilities has slowed somewhat. From the major pharmaceutical companies this not only reflects the variances in the market, but also the need for a breather from capital infrastructure investment while they determine just where their pipelines might be going in the future markets and what kinds of support they are likely to need to drive that forward. That’s not to say the announcements have stopped. Last week Abbott announced they will be building a new 250,000 sq ft manufacturing facility in Ireland, investing €440M and creating 1000 new jobs including expansion at their Donegal site and opening of this new site at Kilkenny. Abbott has a strong manufacturing presence on Irish soil, but has been recently joined by other major players in competing for talent on the emerald isle. 

AstraZeneca and Daiichi Sankyo FDA Approval

AstraZeneca and Daiichi Sankyo have received FDA approval to treat patients with unresectable or metastastic NSCLC with HER2 mutations with the anti-body drug conjugate (ADC) sold as Enhertu. The complete response rate for this therapy was quite low (1.9%) but the overall response rate was 57.7% earning the approval for aggressive condition with limited therapeutic options. While a mild movement forward in the therapeutic solutions, it does represent a therapy for a relatively large number of potential patients per year relative to other niche oncologies. Per the terms of the collaboration, AstraZeneca will pay Daiichi Sankyo $125M as milestone payment for FDA approval. 

I just want to note that overall this is fairly representative of many of the oncology approvals. People have limited options and this provides an option with meaningful side effects that can increase their life expectancy somewhat but does not have any sense of curative prosperities.  Now it’s great that it’s approved and is now accessible to patients. However, if this were my primary therapeutic option I would not be thrilled. It’s certainly better than what existed before and hats off to AZ and DS for the hard work, but it’s also a clear incremental step to defeating cancer.  

Disclaimer

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.