Acquisitions • Alliances • Financing

VOLUME 38 NUMBER 02

FEBRUARY 2020

DEAL-MAKING Acquisitions • Alliances • Financing

2020 Could Spell The End The Only Way Is Nasdaq Investors See Medtech Continuing Of Mega-Mergers, For Now To Ride Growth Wave Into 2020 PAGE LEFT BLANK INTENTIONALLY invivo.pharmaintelligence.informa.com STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS CONTENTS ❚

February 2020

DEAL-MAKING ACQUISITIONS ALLIANCES FINANCING

10 16 22 2020 Could Spell The End Of The Only Way Is Nasdaq Investors And Deal-Makers See Mega-Mergers, For Now MELANIE SENIOR Medtech Continuing To Ride The JOSEPH HAAS More capital, more expertise, more Growth Wave Into 2020 Industry experts expect a continued liquidity: those are the well-known ASHLEY YEO uptick in deals valued between $2bn- advantages of the US Nasdaq exchange The consensus among investors is that $10bn this year as buyers look to add over its European counterparts. Yet until medtech has been the best-performing critical mass in areas like oncology, rare recently, most European biotechs sought part of health care for the past three to disease and cell and gene therapy. a local listing before going to the US. four years, and investment levels remain Divestitures to free up capital and narrow good. Seemingly all-encompassing of late focus should continue too. has been companies’ preoccupation with digital strategies, but there is a lot more to this unique industry than just digital.

26 32 36 Biopharma M&A: Global Biopharma R&D Investing In People: Aligning Lessons From 2019, Productivity And Growth VCs And Today’s Entrepreneurs Trends For 2020 Ranking LUCIE ELLIS ANDREW MCCONAGHIE MARKUS THUNECKE AND In the latest instalment of our VC playbook “Growth gaps” were the driver for a ERIKA KUCHEN series, In Vivo sits down with Roel record-breaking M&A year – but CEOs An analysis of the R&D productivity of the Bulthuis, managing partner at INKEF must remain disciplined when pursuing world’s 30 largest public pharmaceutical Capital, to discuss the group’s approach opportunities, or pay the price down companies reveals an overall drop in R&D to health care investing in Europe, the the line. productivity, but this should not hide the importance of funding a team not just a fact that some companies are still project and how life sciences venture performing extremely well. capital is evolving with the emergence of health tech.

February 2020

DEPARTMENTS ❚ From The Editor AROUND THE INDUSTRY Welcome to In Vivo’s deal-making and partner- 4 Regular Acceptance Of Simulation ing special issue. Studies More Likely In 2020s WILLIAM MASTERS This month we have analyzed 2019’s deals to learn lessons for 2020. But we have also gone 6 New Business Models Are Needed back even further, exploring two decades of To Support Innovative Payer mega-deals in an infographic (see page 8). Partnerships CHRIS EASLEY The biopharma sector is often accused of a being a slow-moving engine, but a look back over the 7 In Vivo's Deals Of The Year past 20 years reveals that a lot has changed. Our INFOGRAPHIC: DEAL-MAKING infographic timeline explores the history of high-impact M&A transactions in the pharma in- 8 LUCIE ELLIS, GAYLE REMBOLD- LUCIE ELLIS dustry between 1999 and 2019. FURBERT AND JEAN MARIE SMITH Also in this issue, Melanie Senior explores why the US Nasdaq exchange has 40 ON THE MOVE become the only option for ambitious UK and European biotechs, looking Recent executive appointments into case studies such as Genmab’s $582m IPO in 2019. in the life sciences industry As for 2020, it seems a busy year of deal-making is on the cards. Still, bio- REGINA PALESKI pharma might have seen the end of the “mega-merger” for now. Industry experts are predicting that 2020 will be a year in which mid-sized companies 44 DEAL-MAKING will drive most of the deal activity, either acquiring or being acquired. And as Deals Shaping The Medical Industry, big pharma seeks bolt-on acquisitions to build out strategies, deals to ac- January 2019 quire biotechs valued at between $5bn and $10bn will be the sweet spot for THE STRATEGIC TRANSACTIONS TEAM this activity.

EXCLUSIVE ONLINE CONTENT Other important notices: In Vivo has launched its refreshed Editorial Advisory Board for 2020. Please invivo.pharmaintelligence.informa.com see the list of all EAB members in the back of this issue. The advisory board ❚ Differentiating In Logistics will be providing guidance and insight as we look to bring you the very best For Regenerative Medicine’s features and analysis. Exploding Universe We also want to hear from our readers. We are conducting a survey to better ASHLEY YEO understand our subscribers’ content and delivery needs. If there are any changes you’d like to see in the format of the content or the method in which ❚ Meindert Boysen On What you receive and access In Vivo, or if you love it how it is, now is the time to Companies Should Expect have your voice heard. Go online to take part: https://bit.ly/2Srv3Y8 From NICE FRANCESCA BRUCE

❚ Analyzing An EU Medtech In Vivo: Always Online First Don’t have an online user account? Quickly and easily create one Regulation Crisis In The Making Relevant and exclusive online-only by clicking on the “Create your ASHLEY YEO content at your fingertips 24/7. account” link at the top of the page. Full access to our 36-year archive. ❚ Creating Stability In A Time Contact: Of Transition Access your subscription by visiting: [email protected] BEN COMER invivo.pharmaintelligence.informa. or call: (888) 670-8900 or +1 (908) com and log in. 748-1221 for additional information. ❚ Biopharma Quarterly Dealmaking Statistics, Q4 2019 AMANDA MICKLUS AND MAUREEN RIORDAN All stock images in this publication courtesy of /invivo @invivo /invivo www.shutterstock.com unless otherwise stated.

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❚ Up-Front SNAPSHOTS FROM FEBRUARY’S CONTENT

EY identified four factors “The most important fueling last year’s record-breaking activity: theme when we invest in companies is ‘How 1 can I help you translate this unique Readily available capital for deals, or “Firepower” science into a drug that a physician will 2 prescribe, and an insurance company Slowing revenue growth at life sciences incumbents will pay for?’” PAGE 36 3 – Roel Bulthuis A recalibration of the US and European public markets

“Care is going into the home, and hopefully that’s 4 where this industry is going,” says OrbiMed Advisors’ A desire to deepen Anat Naschitz. Patient interaction with devices is a therapy area focus key factor, and devices offering this facility are PAGE 26 setting the pace. PAGE 22 In 2019, there were INFOGRAPHIC: PAGE 8 12 deals in the life sciences (including consumer health, TN . medtech and animal health) valued at Combined value Total number Total number of the last $5bn or more. of deals of deals decadeʼs Of those 12 deals, worth more worth more mega deals than $2bn than $2bn six involved the (>$2bn; (1999-2019) (2009-2019) acquisition of a biotech. 2009-2019) PAGE 10

Regular Acceptance Of Simulation Studies More Likely In 2020s

Lyon, France-based Novadiscovery is developing a user-facing technology to run in silico the more conventional operations. “We studies, a method it expects to cut development costs and improve trial success rates. aren’t saying in silico trials will at any But acceptance of “new” data types is often a concern for drug developers, despite world- point in time become a full replacement leading regulatory bodies stating their desire for 21st century approaches. to testing drugs on humans,” Boissel noted. “What we’re saying is that this In a recent interview, Novadiscovery technology will help us identify a drug CEO François-Henri Boissel outlined his candidate and certainly improve the company’s ambition to utilize in silico or matching between those drug candidates virtual clinical trials to give a much-needed and the best responder profile, to make efficiency boost to the biopharma industry. the whole process more efficient in more The company aims to use its unusual trial of an engineering mindset.” platform – Jinko – to allow customers to Dowe affirmed this with an analogy first model their drug candidate on a virtual about the aerospace industry. “There is human in a computer simulation before the no way any new plane would fly without drug is tested on humans. first simulating many times. Right now, in “The objective of this platform is to help pharma, we’re not simulating – we have our customers to improve productivity of the knowledge – but we’re not simulat- the R&D process, potentially reducing time “The objective of this ing,” she said. “We’re putting drugs into to market, reducing the cost to those firms humans after preclinical trials” and then and in some instances reducing the size of platform is to help our into human studies. While virtual simula- the trial necessary to demonstrate efficacy; tion studies would add another layer to as well as hopefully improving the prob- customers to improve the drug discovery process, Dowe argued ability of success,” Boissel told In Vivo. that this method should make the entire On January 9, Novadiscovery an- productivity of the R&D process more efficient. Just as computers nounced that the Debiopharm Innovation process, potentially have done for many other industries. Fund was investing €5m in its series A financing round. Tanja Dowe, CEO of the reducing time to market, THE JINKO PLATFORM Debiopharm Innovation Fund, spoke of Novadiscovery, which has been around its strategy of investing in best-in-class reducing the cost to for almost a decade, is built upon the companies seeking to disrupt the pharma- Jinko platform for in silico trials. While not ceutical industry, either in the way drugs those firms and in some the only company in this space, Novadis- are developed or how patients are treated. covery is differentiated in that it not only “The pharma industry needs faster ways to instances reducing the makes use of quantum computing but also run clinical trials and smarter ways. Drug aims to use machine reading and machine development cost has gotten out of hand. size of the trial necessary learning to draw upon the vast scientific We have turned to personalized medicine, to demonstrate efficacy.” knowledge in literature. This allows the but we behave as if we are still developing technology to absorb information in a di- these big blockbuster drugs of ‘one-size- verse range of fields to better understand fits-all.’ We definitely have to find better François-Henri Boissel the various biological mechanisms of a approaches,” Dowe said.Boissel expects disease. This can then be added into the Novadiscovery to close the series A round modeling of the effects of a proposed drug in 2020, after reaching a target of €7m. candidate during the virtual trial. Boissel believes that in silico trials will “We’re trying to amass all the biological become part and parcel of drug R&D, not entities that are known to be implicated with a view to fully replacing randomized in those various biological processes and clinical trials (RCTs) but rather informing the functional relationship between those

4 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com AROUND THE INDUSTRY ❚

entities,” Boissel said. Novadiscovery’s The second issue is reliability. There sectors making extensive use of simula- technology will launch over the course of is a risk related to the “strength of the tions, which could be emulated in pharma- 2021. He explained that Nova will progres- evidence extracted from the scientific ar- ceutical product development. The current sively expand on functionality. With one ticles. This is something the platform ad- approach creates the need for long and of the benefits of having a software-to- dresses in a functional way,” Boissel said. complex experiments in vitro, in animals service platform being that you can plug and then in patients during clinical trials, in additional functionality and upgrades REGULATORY OUTLOOK which pushes development costs to the to the platform over time. The platform is A wider issue for the AI and virtual trials unsustainable levels we see today, while already operational internally, but needs sector is acceptance by regulators of the stifling innovation. work to become a tool for external users. data these studies generate. Boissel said In its Regulatory Science Strategy for “Essentially there is a thick layer of user the key issue was validation of the model. 2025, the European Medicines Agency interface and user experience that we need “Can we provide proof to the regulator noted that novel approaches, such as sys- to work on, among other things, to get us to that the model has been properly vali- tems on a chip and in silico modeling, are a commercial product stage,” said Boissel. dated before we use simulations to help the subject of much ongoing research and Debiopharm looked at a lot of compa- inform the design of an upcoming trial?” have the potential to benefit drug develop- nies that aim to improve drug development he asked. “The FDA is working on drafting ment and support early efficacy studies, as but the majority of these companies work those guidances for computational model well as improve predictive ability. in the discovery phase, Dowe noted. “They validation. They launched, in 2018, a trial The EMA is aware that there may, how- are looking at big data, using artificial intel- program called MIDD for modeling in drug ever, be hesitancy on the part of develop- ligence, to discover new druggable targets development, which Novadiscovery has ers to use such new methods in marketing or new leads. There are fewer companies been a part of.” authorization applications because of that are using smart systems for predict- Essentially, the FDA is building a concerns that these will not be accepted ing the efficacy of clinical trials,” she said. portfolio of new cases to inform a frame- by regulators and may stall the approval This later development stage is a field that work so that digital evidence becomes process. To address this, the EMA has is “data poor,” so typical AI companies acceptable in the context of a drug’s proposed promoting in silico methodology cannot operate here. “You need drug de- development. Boissel predicted that the and novel in vitro assays to reduce animal velopment colleagues, you need medical FDA would formally issue guidelines in the use, particularly in toxicology/epidemiol- understanding, biological understand- next year or so. ogy and batch control. ing – combining these with simulation In Europe, the Avicenna Alliance, or The agency is also working on plans skills, and of course there is a little bit of Association for Predictive Medicine, to drive adoption of novel practices that AI involved as well. This is the reason we was established in 2015 and funded by facilitate clinical trial authorization, such went for Novadiscovery,” Dowe explained. the European Commission to create a as the acceptance of digital endpoints. On When it comes to limitations of in silico “roadmap for in silico medicine.” The Al- modeling and simulation and extrapola- trials, Boissel pointed to two overlapping liance’s findings were published two years tion in clinical trials, the EMA had recently areas. The first hurdle is current under- later and argued strongly for the European stated that these should incorporate standing of a disease. Boissel described Commission and other international and real-world data, natural history and/or knowledge as the primary base material national funding agencies to “include observational data. The agency is con- of these virtual trials, and if there is a lack these research targets among their pri- vinced that in silico clinical trials could of understanding around a disease then orities, allocating significant resources help to reduce, refine and partially replace uncertainties can be introduced to the to support approaches that could result traditional clinical trials. model. However, the CEO noted that the in huge socioeconomic benefit.” IV124437 platform could also help researchers test The report also pointed to the aero- WILLIAM MASTERS assumptions on the understanding of a space industry – as well as other sectors Additional reporting by Vibha Sharma and disease in a much more structured way. such as nuclear power – as examples of Derrick Gingery.

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New Business Models Are Needed To Support Innovative Payer Partnerships

Maximizing patient access to innovative and effective treatments will require increased reference pricing, which relies on pric- transparency, improved outcomes data analyses, dynamic contract management and ing comparisons with selected, often perhaps most importantly, good faith on both sides. lower-cost markets, remains a barrier to more flexible approaches to pricing and Innovation continues to reshape the life sci- recognizing value. ences industry, enabling the development of groundbreaking, life-enhancing therapies. INTEGRATING KEY CAPABILITIES TO Despite these positive advancements, pay- ENHANCE PAYER ACCOUNTABILITY ers are demanding greater transparency When designing new business models on costs and accountability for outcomes with a focus on enhanced accountability delivered to patients and the wider health there are two key market access compe- care ecosystem. While this appears to be tencies that pharmaceutical organizations a daunting challenge, it also presents an need to nurture. To start, businesses opportunity for pharmaceutical and biotech need the ability to use real-world data companies to rethink their business models. to better define patient needs, set Building stronger partnerships with payers high-cost therapies to the products’ risk value parameters and demonstrate the can help to protect sustainable returns, and unknown effectiveness. Organiza- outcomes being delivered over time. while delivering the benefits of greater pa- tions cannot afford to underestimate the Second, organizations need to develop tient access to innovative products. importance of generating evidence that flexible payment models linked to those validates the relevant value for payers outcomes. Integrating these elements into CHALLENGES TO CURRENT and patients during drug development. a new business model will help provide PHARMA-PAYER RELATIONSHIPS Similarly, payers will need to be willing opportunities for greater alignment with Pharmaceutical organizations need to to move beyond the constraints of short- payers, including enhanced alignment have an honest, transparent view of the term budget horizons, siloed finances around unmet needs, patient profiling benefits of innovative therapies and (e.g., drug budget versus hospital or so- and the clinical and economic impact of realistic profitability expectations. In a cial care funding) or relying on expedient optimizing therapy within the relevant recent MIT survey, 91% of payers attrib- pricing mechanisms and rigid evaluation health care system. uted their vast concern over emerging processes. For example, international In the short to mid-term, the indus-

Exhibit 1 New Business Model Elements To Enhance Payer Partnerships

Key Business Enhanced Alignment Model Elements Unmet needs

Leverage real-world data Align on value Assure outcomes to dene and deliver value Epidemiology

Enhance Impact of therapy vs. Market Access Capability Accountability clinical decision-making

Support optimal use Develop flexible payment models Impact of outcomes linked to value

Ability to drive evidence-based choices

SOURCE: Huron

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try is likely to be reliant on third-party functional skills and perspectives as well partnerships in order to build real-world as a blurring of traditional roles within DEALS OF THE YEAR evidence capabilities and drive efficiency. these functions; pricing and contracting Artificial Intelligence and data analytics are acumen combined with deep product WINNERS ANNOUNCED increasingly being sought to enhance the knowledge or outcomes data analysis, ❚ The results are in for In Vivo’s pharmaceutical industry’s ability to obtain for example. Additionally, payer part- 12th annual Deals Of The Year dynamic, real-time insights into drug and ners will need to be managed, not just contest. Chosen by our readers, device utilization and outcomes. Even as engaged, with contract performance the winners are… organizations continue to develop their being continually reported and revisited own in-house resources, there will remain based on emerging data and insights on 2019 TOP M&A an advantage to having external parties col- a product’s value proposition. late, process and report patient outcomes • Industry collaboration requires the 11% 10% data given compliance considerations and right infrastructure. A closer working 0% 40% 0% the requirement for value-based contract partnership between third parties and 33% 10% payments to be arbitrated objectively. global and local teams should become 13% 40% 20% The combination of value-based con- the new normal for the industry. This 10% tracting and the demand for robust data increased visibility can enable orga- is driving the need to strengthen several nizations to better develop and apply 18% competencies and relationships within value-based, real-time data driven 20% the pharmaceutical industry’s global models and tools to drive efficiency and 25% 20% 30% and affiliate organizations. At the global validate patient outcomes, including I I I level, teams will need to develop a broad dashboards to manage flexible contract- Sumitomo Dainippon/Five Riovant Verily Life Sciences ($1bn) Novartis/Microso Sciences Divisions I Roche/Spark I CMR Surgical ($240m) I Amgen/BeiGene value-based contracting framework ing and filter performance or utilization I 3M/Acelity I AbbVie/Allergan I Ligand ($827m) I Nuvation Bio ($275m) I Roche/Sarepta I Gilead/Insitro that defines feasible options – such as feedback into drug positioning and I BMS/Celgene I Envista ($643m) I GSK/Merck KGaA product-specific health outcomes met- value communications. rics, cost savings, or both – to negotiate • Leaders need to commit to long-term 2019 TOP FINANCING around the value and uncertainty of new thinking. Given the significant invest- technologies and products. These frame- ment required for new capabilities and 11% 0% 10% works must balance the risk between competencies, the success of creating 40% 0% the company and its payer partners. pharmaceutical business models33% that sup- 10% Additionally, these options need to be port accountability13% – and ultimately value 40% 20% incorporated into commercial forecast – are unlikely to be viable if approached 10% models for organizations to accurately as one-off product strategies. Any new project the return on investment. Pric- business18% model needs to be aligned to ing governance models must also be how a company does business across its 20% calibrated to reflect the impact on net portfolio – even if it 25%requires structural 20% 30% prices across all markets. and organizational change to redefine I I I Furthermore, affiliates will need to roles andSumitomo responsibilities. Dainippon/Five Riovant Verily Life Sciences ($1bn) Novartis/Microso Sciences Divisions I Roche/Spark I CMR Surgical ($240m) I Amgen/BeiGene deepen their ability to negotiate around Ultimately,I 3M/Acelity these I new AbbVie/Allergan business models I Ligand ($827m) I Nuvation Bio ($275m) I Roche/Sarepta I Gilead/Insitro value and effectively engage local stake- must be builtI on BMS/Celgene a partnership mindset I Envista ($643m) I GSK/Merck KGaA holders involved in data generation. This and culture that recognizes a mutual will help ensure that data collection meth- dependency between pharmaceutical 20192019 TOP TOP ALLIANCE ALLIANCE ods are tailored to value metrics deemed companies and payers. These new part- relevant to local payer and health technol- nerships, fueled by new analytical tools, 11% 0% 10% ogy assessment (HTA) bodies. processes and management40% structures0% 33% can empower organizations to not only 10% EMBEDDING13% SUCCESS shape how companies demonstrate value, 40% 20% A better partnership between pharma- but also show the work supporting it. Prov- 10% ceutical companies and payers cannot ing product value to payers on relevant, be achieved18% in a vacuum and needs to be measurable and transparent terms can built on a solid foundation. Companies help ensure that life-enhancing20% therapies already evolving their25% business models get into the hands20% of the people that need 30% offer several lessons to follow, including: them the most – patients. I Sumitomo Dainippon/Five Riovant I Verily Life Sciences ($1bn) I Novartis/Microso • The importance of organizational IV124432 Sciences Divisions I Roche/Spark I CMR Surgical ($240m) I Amgen/BeiGene design.I 3M/Acelity The integration I AbbVie/Allergan of real-world I Ligand ($827m) I NuvationCHRIS Bio ($275m) EASLEY I Roche/Sarepta I Gilead/Insitro data and outcome-basedI BMS/Celgene contracting Chris Easley I is Envista a managing ($643m) director in I GSK/Merck KGaA solutions require a deeper level of cross- Huron’s life sciences business.

TOP DEALS OF THE LAST YEARS YEARS OF MEGADEALS DEAL VALUE ($BN) The biopharma sector is oen accused of a being a slow-moving engine, but a APR APR 6 AUG ¡ look back over the last 20 years reveals that a lot has changed. In Vivo explores ASTRA/ PFIZER/ SANOFISYNTHÉLABO/ the history of high impact M&A Deals (2009-2019). ZENECA PHARMACIA AVENTIS . JUN DEC BIGGEST DEAL OF THE LAST DECADE CONCLUSION PFIZER/ GLAXO WELLCOME/ WARNERLAMBERT SMITHKLINE BEECHAM & EXPECTATIONS $ . saw the largest acquisition of the last decade AUG ¢ JUL when Bristol-Myers Squibb NOVARTIS/ BAYER/ nally closed its deal to purchase ALCON (£% stake) SCHERING AG Total number of $ $ . Celgene for $74bn. deals worth more 2010 2009 2006 OCT £ MAR ¢ MAR than $2bn PFIZER/ ROCHE/ MERCK & CO/ (1999-2019) WYETH GENENTECH SCHERINGPLOUGH DEALS THAT FELL APART . . JAN ALLERGAN AUG In 2014, AbbVie terminated its (formerly Actavis)/ JUN ¡ TEVA PHARMACEUTICAL proposed acquisition of Shire - FOREST SHIRE/ INDUSTRIES/ LABORATORIES BAXALTA ACTAVIS GENERICS valued at $54.7bn. Shire has Total number of $ $. since been bought by Takeda. deals worth more than MAR MAY ¢ $2bn in the last decade ACTAVIS ABBVIE/ (2009-2019) (renamed Allergan)/ PHARMACYCLICS ALLERGAN The biggest whirlwind story: . Pzer's merger with Allergan JUN ¢ JAN § never made it to the nish line. TN JOHNSON & ABBOTT . JOHNSON/ LABORATORIES/ The deal had been valued at ACTELION ST JUDE MEDICAL $160bn. Combined value of $ the last decade's NOV JUN £ JAN mega deals BRISTOLMYERS ABBVIE/ TAKEDA/ Date of Completion

(>$2bn; 2009-2019) SQUIBB/ ALLERGAN SHIRE KEY CELGENE . ACQUIRER TARGET Sources:8 | In In Vivo;Vivo |Scrip November 2019 invivo.pharmamedtechbi.com $ Design: Gayle Rembold Furbert, Jean Marie Smith/Informa Pharma Intelligence Design Team Deal Value DEAL-MAKING: Infographic ❚

TOP DEALS OF THE LAST YEARS YEARS OF MEGADEALS DEAL VALUE ($BN) The biopharma sector is oen accused of a being a slow-moving engine, but a Deal Value ($bn) APR APR 6 AUG ¡ look back over the last 20 years reveals that a lot has changed. In Vivo explores ASTRA/ PFIZER/ SANOFISYNTHÉLABO/ the history of high impact M&A Deals (2009-2019). ZENECA PHARMACIA AVENTIS . JUN DEC BIGGEST DEAL OF THE LAST DECADE CONCLUSION PFIZER/ GLAXO WELLCOME/ WARNERLAMBERT SMITHKLINE BEECHAM & EXPECTATIONS $ . saw the largest acquisition of the last decade AUG ¢ JUL when Bristol-Myers Squibb NOVARTIS/ BAYER/ nally closed its deal to purchase ALCON (£% stake) SCHERING AG Total number of $ $ . Celgene for $74bn. deals worth more 2010 2009 2006 OCT £ MAR ¢ MAR than $2bn PFIZER/ ROCHE/ MERCK & CO/ (1999-2019) WYETH GENENTECH SCHERINGPLOUGH DEALS THAT FELL APART . . JAN ALLERGAN AUG In 2014, AbbVie terminated its (formerly Actavis)/ JUN ¡ TEVA PHARMACEUTICAL proposed acquisition of Shire - FOREST SHIRE/ INDUSTRIES/ LABORATORIES BAXALTA ACTAVIS GENERICS valued at $54.7bn. Shire has Total number of $ $. since been bought by Takeda. deals worth more than MAR MAY ¢ $2bn in the last decade ACTAVIS ABBVIE/ (2009-2019) (renamed Allergan)/ PHARMACYCLICS ALLERGAN The biggest whirlwind story: . Pzer's merger with Allergan JUN ¢ JAN § never made it to the nish line. TN JOHNSON & ABBOTT . JOHNSON/ LABORATORIES/ The deal had been valued at ACTELION ST JUDE MEDICAL $160bn. Combined value of $ the last decade's NOV JUN £ JAN mega deals BRISTOLMYERS ABBVIE/ TAKEDA/ Date of Completion

(>$2bn; 2009-2019) SQUIBB/ ALLERGAN SHIRE KEY CELGENE . ACQUIRER TARGET Sources: In Vivo; Scrip ©2018 Informa Business$ Information, Inc., an Informa company November 2019 | In Vivo | 9 Design: Gayle Rembold Furbert, Jean Marie Smith/Informa Pharma Intelligence Design Team Deal Value ❚ DEAL-MAKING: M&A Trends 2020 Could Spell The End Of Mega-Mergers, For Now

Industry experts expect a continued uptick in deals valued between $2bn-$10bn this year as buyers look to add critical mass in areas like oncology, rare disease and cell and gene therapy. Divestitures to free up capital and narrow focus should continue too.

BY JOSEPH HAAS wC’s Pharma and Life Sciences group expects mid-sized biotechs developing life-saving drugs to be highly sought, while larger companies will Biopharmaceutical deal-making should continue divesting non-core assets to free up capital and narrow focus to coalesce mainly around mid-sized deals core competencies and targeted growth areas. in 2020, analysts at PwC predict, as PwC’s Global Pharma & Life Sciences Deals Insights Year-End 2019 & 2020 buyers seek bolt-on acquisitions that Outlook report suggests that 2020 will be a year in which mid-sized companies will help them to become leaders in areas P drive most of the deal activity, either acquiring or being acquired. And as big pharma like oncology and cell and gene therapy. seeks bolt-on acquisitions to build out strategies, deals to acquire biotechs valued at between $5bn and $10bn will be the sweet spot for this activity. A few deals valued Most industry watchers see a repeat of between $20bn and $30bn also could occur to further sector leadership strategies. last year’s two mega-mergers as unlikely – instead they expect companies valued Speaking on a deals panel at the BIO CEO & Investor conference in New York on at $2bn to $10 bn, even up to $15bn, to February 10, financial advisor Eric Tokat of Centerview Partners, which advised Spark drive M&A. Therapeutics in its merger with Roche last year, also predicted more small or mid-size deals as big pharma settles down. “Historically, large pharma mergers were driven Although aggregate deal value may be by efficiency, cost-cutting, cash flow, diversification. In this era, the drivers are a bit lower than in 2019, 2020 is expected to different than we have seen in the past,” he said. The science-driven nature of deal- be an active year for M&A. making today should continue the momentum behind smaller bolt-on deals in 2020, he predicted. “I do anticipate more of the $1bn-$5bn or $1bn-$10bn deals.” PwC’s report also suggests that increased activity by private equity investors will drive business development this year. The growing presence of private equity investors is also cited by Morrison & Foerster in its Key M&A Trends For 2020 report, as a factor that will shape M&A activity this year in the life sciences and the larger economy. The Morrison & Foerster report, which looks at deal-making across all sectors of the economy, concludes that increased share-

10 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: M&A Trends ❚

holder activism and increased antitrust “Companies spent an enormous oversight of large mergers will influence amount of time in 2019 really pushing the ❚ PRIVATE EQUITY ON the deal-making climate. envelope … that’s why I think in biotech, THE RISE “The calls for more stringent standards just given the nature of oncology and cell and aggressive [antitrust] enforcement and gene therapy companies being a little • PwC notes that private equity play- have focused particularly on ‘big tech’ and more fragmented, I think we’ll see a lot of ers have about $1.7tn to invest and ‘big pharma’ companies, as well as firms what we call mid-sized deals in that $2bn- are positioned to take advantage of in other industries, where patent-protect- $10bn range,” Hunzinger added. This divestment opportunities in the life ed innovations, platform-based business activity will be driven by more targeted sciences sector. models, and data-driven insights provide pursuits of “great science,” he explained, significant competitive advantages or such as companies looking “to fill gaps • Private equity investment is no may generate ‘winner-take-all’ network in specific oncology portfolios – if they longer reactive, awaiting auction effects,” M&F’s report states. have lung, they want to have ovarian, opportunities, the Year-End 2019 & The biopharma industry has braced for they want to do combinations.” 2020 Outlook report says, but pro- increased regulatory scrutiny, which was a The M&F report notes that health care actively looking for “take private” factor in multiple large deals in 2019. The M&A outpaced overall M&A deal-making opportunities, corporate divestitures US Federal Trade Commission’s review of last year, with aggregate value of health and partnerships with mid-market Bristol-Myers Squibb Co. $74bn acquisi- care M&A up 26% compared to 2018. companies. tion of Celgene Corp. meant that a deal Across all economic sectors, M&A litiga- announced in January did not close until tion will hinder acquisition activity in • A prime example of this in 2019 November, and required the divestiture of 2020, the report predicts, but shareholder was a consortium led by EQT AB Celgene’s autoimmune blockbuster Otezla activism will remain a driver for both purchasing Nestle’s Skin Health (apremilast) to Amgen Inc. for $14.3bn. M&A and divestment transactions. An division for about $10.1bn and then FTC oversight also caused the $4.8bn estimated 47% of activist investor cam- rebranding it as Galderma. Roche/Spark merger to need roughly 10 paigns focused on M&A in 2019, up from months to close as the FTC did an “exhaus- about 35% in previous years, M&F said. • Hot spots for private equity tive” review of the competitive dynamics Meanwhile, the need for large-scale investment include pharmatech in hemophilia A. (Also see “Biopharma acquisitions is less prevalent as new companies, and PwC expects cell M&A: Lessons From 2019, Trends For 2020” corporate strategies have had some time and gene therapy specialists and in this issue .) to take shape, Hunzinger said. “I think microbiome-focused companies to Pharma deal value in 2019 was stable so much happened last year. When I be of increasing interest. compared to 2018, even though volume look across the large pharma companies, was down, with the two mega-mergers they all have gone through some level of • Morrison & Foerster’s review of combining BMS/Celgene and AbbVie transformational event in some shape 2019 deal-making across all indus- Inc. and Allergan PLC keeping deal or form,” he explained. “I combine that tries noted that private equity firms valuation up. PwC’s US Pharma and Life with the fact that across the industry, in 2020 will be “armed with a record Sciences deals leader Glenn Hunzinger the organic growth has never been bet- level of cash,” which it estimates at thinks the industry’s appetite for mega- ter in 10 years. People feel good about nearly $1.5tn. mergers is satisfied for now, due to a their portfolios, they feel good about variety of factors including the integra- their strategies and we’ve heard from a • About $450bn in private eq- tion process following major deals of lot of different companies their views on uity deals were closed in 2019, M&F recent years and companies being more building block-type acquisitions versus added, a modest decrease from confident in their current strategies. This taking big bets. … It’s really a matter 2018. But the firm noted a change confidence, in turn, means they are more of incrementalism versus making a big in investment focus as PE buyers likely to look to smaller, targeted deals to mega-deal.” invested not only in public and more build out on their strategies. KPMG also sees more targeted activity mature companies with established in the coming year, with continued focus cash flows, but also “bought younger Why No More Mega-Mergers? on next-generation therapies, such as firms and engaged in growth equity, “Where we sit now – we kind of felt it at cell and gene therapies, and personal- joint ventures and other majority or J.P. Morgan this year – was there was a ized medicine that are driving forces in minority investments with greater little more calmness at the meeting, ev- the current business development envi- frequency in 2019.” erybody was operating under a strategic ronment. In its 2020 Opportunities and agenda, they felt like they had a good Challenges In An Evolving Market report, plan, they were focused, they didn’t nec- KPMG says drug makers “are diversifying essarily need or feel the pressure to an- across multiple platform types and pursu- nounce a few things at JPM,” Hunzinger ing different strategies.” The report notes said in an interview. that “some companies are investing in

core assets and to help pay down debt. “You have companies with wide portfolios; what comes with wide portfolios is operational complexity, trying to be every- thing to everybody in terms of geography, therapeutic categories, manufacturing,” Hunzinger said. “There are people looking at their business models and saying ‘I need to figure out how to transform my business operationally, I want to be able to invest in the growth areas,’ and they know in some of these therapeutic areas scale is super important. If they are not the category leader and do not have scale, then they know that maybe certain therapeutic areas or products are better off in someone else’s hands.”

Cell And Gene Spotlight EY’s business development group an- vertically integrated capabilities, which ticipates efforts by biopharma companies

allow them to capture market segments ❚ 2019 DEAL-MAKING to optimize their portfolios could drive before second-movers emerge and to po- TRENDS as much as $300bn in deal-making this sition themselves as the best partners for year centered on five therapeutic areas: There were 12 deals in the life sci- emerging biotechs.” oncology; cardiovascular and metabolic ences (including consumer health, “Other companies are taking a more disease; immunology, infectious disease; medtech and animal health) valued conservative approach by following and central nervous system disorders. at $5bn or more. large capital investments with multiple EY also expects 2020 deal-making to partnerships across different innovative be dominated by cell and gene therapy, Of those 12 deals, six involved the platforms, which gives them time to de- as well as immuno-oncology, according acquisition of a biotech. PwC expects termine which will eventually show the to a report released in conjunction with biotech buyouts valued at $5bn or most potential,” KPMG added. the J.P. Morgan Healthcare Conference. more to increase in 2020. But everyone focusing on the same Gilead Sciences Inc. and Novo Nordisk area has an impact. Numerous players AS are viewed as motivated buyers in the The big pharma sector, however, seeking oncology and cell and gene ther- cell and gene space, but the early track saw a decrease in deal volume to apy acquisitions can lead to asset scarcity record of some of the products that have fewer than 100 transactions, while and make it challenging to remain within reached market caused investor anxiety biotech, medtech and other sectors reasonable valuations, Hunzinger said. during the second half of 2019. While had increased deal volume. “Last year, I think we saw a lot of Novartis AG’s gene therapy Zolgensma that, where companies needed to make (onasemnogene abeparvovec-xioi) got off Aggregate deal value in biotech certain moves to at least start to add to to a solid launch, Spark’s Luxturna (vore- nearly tripled from 2018 to 2019 to their building blocks or their foundation tigene neparvovec) yielded minimal initial roughly $180bn, while deal volume in their therapeutic category,” he said. sales. Meanwhile, the launch of bluebird rose as well. “This is part of what the industry always bio Inc.’s Zynteglo (autologous CD34+ has to address, how do you balance risk cells encoding βA-T87Q-globin gene) was as well as staying disciplined. A lot of the hindered by manufacturing issues. (Also corporate development people I’ve come Making Room For Bolt-On Deals see “Gene Therapy Manufacturing Hitch across do a tremendous job trying to bal- In tandem with continuing focus on with Solved, Bluebird Aims For European Debut ance that risk. The risk is always there, corporate strategies and a reduced ap- In 2020” - Scrip, 24 Oct, 2019.) the value discussion is always there, I petite for larger M&A, Hunzinger expects Hemophilia A and B and rare diseases see people excited about technology and a continuation of the divestment trend such as Dravet syndrome, Pompe disease about certain companies and drugs, but seen in the biopharma sector. In recent and beta thalassemia are expected to they just can’t get there on the valuations. years, this has taken the form of sell-off among the therapeutic areas driving inter- I think that while they know there’s a of assets and business units, as well as est in cell/gene therapy companies, along scarcity factor, people know that they spinouts and initial public offerings, he with Duchenne muscular dystrophy. have to have discipline.” explained. He thinks companies will do Roche’s $4.3bn acquisition of Spark more spinouts in 2020 both to divest non- was just one of four noteworthy cell/

12 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: M&A Trends ❚

gene therapy M&A deals in 2019. Astel- KPMG SURVEY FINDINGS las Pharma Inc. bought Audentes and KPMG’s 2020 “Opportunities And Challenges In An Evolving Market” report surveyed 66 its rare neuromuscular disease candi- respondents around the life sciences sector on how they assess the deal-making environment heading into 2020 and how various factors might affect the deal-making climate. date AT132 in December for $3bn. Below the billion-dollar threshold, 2019 also saw Biogen Inc.’s $867m acquisition of Eect Of Drug Pricing Controls On Deal-Making (%) Nightstar Therapeutics PLC and Vertex 3 Pharmaceuticals Inc.’s $245m purchase Signicant increase of gene-editing play Exonics. Moderate increase 14 Looking more broadly at the life sciences as a whole, KPMG anticipates No change 26 deal-making to be driven by efforts to capture leadership positions in market Moderate decreased 53 segments, similar to PwC’s expectations, but its survey of 66 companies indicates Signicant decrease 4 that uncertainty about the outcome of 0 5 10 15 20 25 30 35 40 45 50 55 the 2020 US elections as well as pricing- related issues means volatility for how deal-making and other investment by Deal Volume Expectations Compared To 2019 (%) the health care sector will proceed as the year goes on. Increase >10% 25 The uncertainty of the US political 43 landscape was also discussed during Increase >0%;<10% the deals panel at the recent BIO CEO No change 21 & Investor conference, where panelists agreed that the impact is not priced into Decrease >0%;<10% 9 current models. J.P. Morgan vice chair Philip Ross speculated that more uncer- Decrease >10% 2 tainty could come later in the year when the Democratic nominee is selected, 0 5 10 15 20 25 30 35 40 45 and that uncertainty could also impact the financing and IPO environment. The Asset Valuation (%) consensus at the J.P. Morgan Healthcare Conference and Biotech Showcase meet- Overvalued >10% 17 ings at the start of the year was that activity will slow in the second half due to the Overvalued >0%;<10% 30 impending election. Fairly priced 41 In its report, KPMG notes that deal- making was robust in 2019, up 40% Undervalued >0%;<10% 11 from 2018 as of the end of November. In its survey, 35% said overall health care Undervalued >10% 2 investment is bolstered by strong under- lying fundamentals, although only 28% 0 5 10 15 20 25 30 35 40 45 say that of the life sciences sector. Innovation, particularly in the areas What Will Be Primary Motivation For M&A? of rare diseases and cancer, is motivat- ing deal-making, the KPMG report says, Defensive transaction 2 as 85% of its sample said a willingness Expansion (new geography, product 26 to pay for innovation will drive transac- or service) tions. It pointed to 58 deals last year in Horizontal acquisition 20 cell and gene therapy, including 17 full New operational model 23 acquisitions, and predicted such deals will increase in 2020. Roll-up of similar assets 19 “In addition to small molecule drugs and antibodies, there are a number of Vertical acquisition 11 new drug types for rare diseases,” KPMG 0 2 4 6 8 10 12 14 16 18 20 22 24 26 states, noting 34 of the 59 new molecular SOURCE: KPMG

entities approved by the FDA in 2018 were prices and patient access (see Exhibit 1). to treat diseases with 200,000 patients or Fifty-six percent said “shift to value” fewer in the US. mechanisms such as alternative payment “Next-generation nucleic acid-based mechanisms in which drug companies therapeutics target rare diseases at the share risks with payers will increase genetic level and prevent the manifesta- KPMG’s survey found investment. New ways to pay for innovation of disease-causing proteins,” the tion, such as the annuity model being report continues. “Viral vector-based that expansion into used to spread out the cost of Novartis’s therapies – modified viruses that can gene therapy Zolgensma, are viewed posi- penetrate cells and tissues to cure disease new geographies or tively, with 70% in the survey saying new – are emerging as treatments for cancer, payment methods might lead to increase infectious diseases and rare disease ge- product/service areas investment. netic disorders.” KPMG estimates there Early returns on Novartis’s annuity are nearly 500 viral vector-based thera- is expected to be the model do not appear promising, however. pies in the global R&D pipeline. At the J.P. Morgan Healthcare Conference main driver of M&A in January, David Lennon, president of Potential Impact Of External Novartis subsidiary AveXis, noted that Factors On Deal-Making activity in 2020, no payer had signed on for the extended KPMG queried its 66 respondents from payment plan at that point. the pharmaceutical and biotechnology followed by deals to KPMG’s survey found that expansion product and services sector on how the into new geographies or product/service possibility of drug pricing legislation or shore up new areas is expected to be the main driver of related policy changes could affect their M&A activity in 2020, followed by deals to investment activities, including deal-mak- operational models shore up new operational models or deals ing, in 2020. Fifty-eight percent said that if to bolster existing business. drug pricing control legislation advances or deals to bolster The picture the survey paints is pretty in the US, that could have a negative im- good. More than half of the respondents pact on investment. The respondents also existing business. said asset prices in their subsector are fair are wary of the impact of the 2020 election, or undervalued, and 68% expected deal with nearly half saying it could cause de- volume to rise in the coming year. But po- creased investment – 37% predicted some litical risk remains the biggest concern: decrease, while 12% expect a significance the only potential disruptor seen as hav- decline in investment. (Also see “US Drug ing a negative impact is the US election, Pricing Legislation Efforts Headed Toward and 53% of the respondents cited ongoing Spring Renewal? A Look Ahead” - Pink efforts to control drug prices as a factor Sheet, 2 Jan, 2020.) holding down deal-making. While the KPMG survey indicates ap- IV124450 prehension about drug pricing legislation, however, it also shows a positive Comments: view toward other mechanisms to affect Email the author: [email protected]

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The US Nasdaq exchange has become the only option for ambitious UK and European biotechs.

BY MELANIE SENIOR anish antibody company Genmab AS raised over half a billion dollars in its US Nasdaq IPO in July 2019 – the second-largest US biotech IPO ever. More capital, more expertise, more Genmab was one of a handful of European-headquartered biotechs to liquidity: those are the well-known list in the US in 2019; its mighty haul pulled up the group’s average IPO advantages of the US Nasdaq exchange proceeds to almost $175m. That is not bad by US market biotech IPOs. By over its European counterparts. theD standards of European IPOs, it is huge (see Exhibit 1). The average amount raised on London’s Alternative Investment Market (AIM) is about £25m ($32.7m) – and there were Yet until recently, most European not any biotech IPOs on AIM in 2019 at all. It was a dismal year for European listings. biotechs have sought a local listing Admittedly, 20-year old Genmab is not your standard biotech. It is profitable, with before going to the US. two approved drugs, Arzerra (ofatumumab) and Darzalex (daratumumab), marketed by big pharma partners. It has a $1.5bn cash pile, no debt. Genmab had listed on the That is changing. Many of Europe’s R&D Copenhagen Nasdaq Exchange in 2000, a year after its founding. Despite some set- focused players are now going direct- backs along the way, at the time of its US IPO, it was already, at over $10bn, the largest to-Nasdaq, viewing it as the only way to access the funding required to remain European-headquartered biotech in market cap terms. competitive. But Genmab’s ambition went further. With over half-a-dozen proprietary clinical candidates, it wanted to be able to hang onto a greater share of those for itself. It was Nasdaq punishes failure as fervently as chasing the oft-cited dream of becoming the next Vertex Pharmaceuticals Inc./Gilead it rewards success, however – and the Sciences Inc./Amgen Inc. That meant accessing more money – much more than Eu- 10-year bull market won’t last. ropean investors could provide. “We needed a higher profile in the US, in order to get more analyst coverage and to gain the attention of large mutual and generalist funds So the ride will be bumpy. But Europe’s that didn’t know we existed,” said CEO Jan van de Winkel during a Yahoo Finance biotechs need to be on board. Their own interview in September 2019. It needed the firepower and financial flexibility to take public markets, it seems, simply cannot the next step – from a $10bn company to a $40bn company. “Our US listing was long compete. overdue,” conceded van de Winkel. Other European biotech veterans have taken a similar path. Germany’s MorphoSys AG raised a cool $239m (gross) in its 2018 US listing, almost 20 years after the antibody company first listed in Frankfurt. Its shares have never been higher; the company’s

16 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: Financial Strategies ❚

Exhibit 1 Biogen for $877m in 2019, two years after European Pharma Nasdaq Appearances In 2019 its $76m Nasdaq IPO.

COMPANY US IPO SIZE COUNTRY OF ORIGIN Not A Magic Solution Of course, a Nasdaq listing itself is not a Genmab AS $582m Denmark magic wand. The firms mentioned so far were well-established, waiting to break BioNtech SE $150m Germany out. They had well-validated science, Genfit SA $135m France and most had partnered products on or near the market, and revenues. Some Innate Pharma $68m* France (like Ablynx), had spent years preparing the ground for their US debut; the doors Bicycle Therapeutics $60m UK were open. Centogene AG $52m Germany They were also the survivors of a rough first couple of decades for the European Aprea Therapeutics Inc. $98m Sweden/US biotech sector. “We were delusional, back then, thinking it was a good idea to take Hookipa Pharma Inc. $84m Austria/US companies public on local listings,” said *includes European private placement one European-based VC. Many of Europe’s SOURCE: Strategic Transactions locally listed biotechs floundered, hurt by a dearth of capital, of expertise and of market cap is now over $4bn. In 2017, Local listings can provide an impor- liquidity. Yet the lack of private follow-on Belgium-based Ablynx NV (now part of tant steppingstone during companies’ funding meant that “we had no choice” Sanofi) raised $230m on Nasdaq – includ- early growth. But it was Nasdaq that but to do a local IPO, the VC continued. ing $75m from a single investor, recalls enabled GW Pharma’s transformation Times have changed. Private funding then CEO Edwin Moses. Ablynx had for a from a development company to a for European biotech reached a record decade prior been listed on the Brussels $4.2bn market cap organization with of almost $3bn in 2019, according to Euronext. “We wanted to give Europe a two marketed products, including the BioWorld. And if the cohort of European chance, to see if we could become prop- first FDA-approved cannabinoid drug, biotechs survivors like Ablynx or Genmab erly valued,” said Moses. But in the end, Epidiolex, and a trans-Atlantic commer- came “late” to Nasdaq, some of their suc- having watched compatriot Galapagos cial infrastructure. Accessing the funds cessors are trying to avoid making the NV raise $275m in its US debut two years to become a fully integrated group that same mistake. Young UK companies that earlier, he realized that there was no could exploit the full value of its pipeline have gone direct-to-Nasdaq, bypassing a choice but to do the same. “would have been challenging in Lon- local listing, include gene therapy players Not just for what is raised at IPO in the don,” said Gover. In 2016, the London Orchard Therapeutics Ltd. and MeiraGTx US, but, perhaps more importantly, for listing was ditched. Ltd. (which raised $186m and $80m, the funding that is accessible thereafter. A Nasdaq listing can turbo-charge respectively, in 2018), chimeric antigen Ten-year old Dutch antibody company Ar- stock-prices as new investors buy in, T-cell (CAR-T) company Autolus Thera- genx SE (also listed in Brussels) pulled in driving more activity and interest (see peutics PLC (which raised $140m in 2018), over $100m in its 2017 US IPO – followed Exhibit 2). Trading volumes and liquidity and cancer-focused Bicycle Therapeutics. by a whopping $557m follow on public tend to increase (there are sharper ups These players are at a much earlier offering two years later. Cambridge, and faster downs); valuations tend to stage, some only in Phase I. They are work- UK-headquartered GW Pharmaceuticals improve as the company is opened to a ing in hot but high-risk fields such as cell- PLC has raised over $1.5bn since its 2013 pool of capital up to 10 times larger than or gene-therapy, developing entirely new Nasdaq IPO – though it was among the in the UK, and to an almost endless sup- drug modalities. They require investors UK-based Nasdaq pioneers. ply of specialist funds. with a sophisticated understanding of sci- GW – which develops cannabinoid- This opens up companies’ strategic ence, and an appetite for risk, both much based medicines – had spent 12 years options. It puts them in a stronger ne- harder to find in Europe. They also need languishing on AIM. When it turned to gotiating position with potential prod- to access funds quickly in order to have a Nasdaq, “we felt we were blazing a trail,” uct partners, for example, including chance of competing in fields marked by recalled CEO Justin Gover. (UK-rooted enabling companies to retain a greater very rapid scientific and clinical advances. gene sequencing technology group share of their pipeline assets, as Genmab Going to the US “is about accessing capital Solexa had listed in 2006, a year before is seeking to do. It reveals the potential at the same cost as competitors, but also being acquired by Illumina Inc.) And buyer universe – Sanofi paid $4.8bn for about access to capital full stop,” said although back then, there were “mixed Ablynx a year after US listing, beating Autolus CFO Andrew Oakley. feelings” about turning from the UK to the suitor Novo Nordisk; UK-rooted gene- Broader biotech funding trends provide US, it turned out to be the right decision. therapy firm Nightstar was acquired by another Nasdaq tailwind. Crossover inves-

Exhibit 2 GW’s Stock Price Progression Since 2013 Nasdaq Listing

200

180

160

140

120

100

Close Price (US$) 60

05/2013 01/2014 01/2015 01/2016 01/2017 01/2018 01/2019 02/2020

SOURCE: Yahoo Finance

tors – who support companies through of foreign companies – have more than But it can also bring significant tax and cost pre-IPO and post-IPO funding rounds doubled since the IPO. It has a market cap benefits to the company. – are more prevalent, and other private of close to $9bn. US specialist investors are “Being UK domiciled but listed in the investors are also more likely to support better placed that some European inves- US is a very good outcome,” said Autolus’ the IPO rather than sell out. Since US in- tors to price risk, say CFOs – and therefore Oakley. UK companies enjoy the gener- vestors win the numbers game – there are to drive valuations to match. Many Euro- ous R&D tax credit scheme, which can more, larger US crossover investors than pean company investors and CFOs now result in cash payments of up to a third European ones – the likelihood of Nasdaq say Nasdaq is the best – or even the only of qualifying R&D spend. Office-space success increases. – way forward for ambitious R&D-focused and company running costs are cheaper German cancer immunotherapy company European biotechs. in the UK and most of Europe than in US BioNTech SE, for instance, raised a combined There remains some reluctance among hot-spots like Boston or San Francisco. $600m in two private funding rounds in 2018 European executives to acknowledge US PhD-qualified scientists may cost less, and 2019 – both led by US crossover investors. dominance, but most no longer view go- too, and are less likely to be poached by Fidelity Management led a $325m series B in ing to Nasdaq as letting down the side. a nearby competitor. July 2019 billed as one of the largest private bio- Europe’s exchanges have tried – and, Further, ex-US headquartered compa- tech rounds ever in Europe; Redmile Group led with one or two notable exceptions, nies can take advantage of more relaxed the $270m series A in early 2018. So there was failed – to compete with the fact that reporting rules for foreign private issuers no surprise when the company listed on Nas- capital is global and Nasdaq is its hub. on Nasdaq. daq in October 2019 raising another $148m. “It’s perfectly legitimate to access fund- MeiraGTx Ltd. has, like Autolus, struc- BioNTech was founded 10 years ing in markets other than those in which tured itself to get the best of both worlds. earlier, in 2008, with funding from the you do R&D. There’s no shame in it,” said “The majority of our employees and our Struengmann family office (founders of one UK-based private investor. infrastructure is in the UK,” said CEO generics giant Hexal AG, ultimately sold A Nasdaq listing does not need to involve Alexandria Forbes. That is because Mei- to Novartis). It has a full suite of tech- moving the company wholesale to the US. raGTx’s ocular gene-therapy technology nologies, from mRNA to cell therapies In many cases R&D and most employees came out of University College London; and antibodies, and a host of big-name remain in the UK (or another European the company also has ties to the nearby partners. Most of its pipeline is still in country), helping build the local talent eco- Moorfields Eye Hospital, through which it Phase I or pre-clinical, however. system. This may be the best place for the has established a gene therapy manufac- Yet BioNTech’s American Depositary science – in cases where a technology or turing facility. MeiraGTx remains UK-do- Shares (ADS) – dollar denominated shares asset emerged from local labs, for instance. miciled, but its headquarters are in New

18 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: Financial Strategies ❚

Some EU-rooted companies in the class like gene therapy. It needs to convince ❚ FOREIGN PRIVATE of 2019 IPOs have become US incorpo- backers on both sides of the pond that it ISSUERS rated (“Inc.’s”), however: Austrian-born can effectively compete in an area domi- infectious diseases vaccines company nated by large players. The company’s Non-US companies can list on Nas- Hookipa Pharma Inc. and Swedish-born lead candidate, ensifentrine, a PDE3/4 daq as Foreign Private Issuers (FPI). cancer-focused Aprea Therapeutics Inc., inhibitor, has reported Phase IIb data as a This status comes with more relaxed, for example, which maintains research ac- maintenance therapy in chronic obstruc- easier and cheaper reporting and tivities in Stockholm. As companies grow tive pulmonary disease (COPD). disclosure requirements than for non- and expand their activities in the world’s Things may change if Verona’s candidate FPI. To meet FPI criteria, companies largest market, the benefits of a US listing progresses; GW Pharma found that almost must have more than half their assets multiply further, to include issuing stock all the trading activity in its shares moved outside of the US, the majority of their options for US employees, and providing to the US once it had its Nasdaq listing. directors must not be US citizens or a currency for local acquisitions. When the company de-listed from AIM resident, they must be principally in 2016, it said that 94% of trading over administered outside the US, and/ Dual Listing: Worth It? the previous six months was on the US or no more than 50% of voting shares Some ex-US companies maintain a dual exchange. Anti-infectives focused Summit may be held by US residents. listing after their US IPO. This allows Therapeutics is following suit, with plans them, in theory, to maintain stability to de-list from AIM in February 2020, five It is the companies’ responsibility among a local investor base as well as tap years after its Nasdaq listing. Summit is to ensure they continue to meet FPI into deeper US pools. A loyal, local retail majority funded by a single individual, rules as they grow. Some Europe- investor base can provide welcome sup- reflecting the challenging nature of the headquartered biotechs choose port during a wider market downturn or anti-infectives market. But it wants to keep to not take advantage of FPI even after disappointing results, for instance. its US listing anyway, to keep open the though they qualify, believing there But dual-listings can cause tensions. option of future public offerings “without is an advantage in having materials The US listing price itself can irk local the costs of IPO,” said CEO Glyn Edwards. and accounts that look similar to shareholders if it’s lower than the price For Bicycle, whose lead candidate is those of any domestic (US) issuer. at home: Germany’s Biofrontera AG in 2018 had to fight off such a complaint from its local shareholder. On the other ❚ WHY CHI-MED IS York, where Forbes (who spent a decade hand, some European CFOs suggest that STAYING ON AIM as a buy-side investor in New York) and local listings can be detrimental if they her management team are based. benchmark the company’s valuation When Hong-Kong-headquartered Perhaps as a result of its CEO’s own too low, with a knock-on effect on the Chi-Med listed on AIM in 2006, it was background, MeiraGTx’s 2018 listing Nasdaq price. all about increasing awareness of came fast, just three-and-a-half years Dual listings can also be cumbersome. the group, said CEO Christian Hogg. after its foundation. Its most advanced Reporting requirements differ slightly The company (then worth less than program still in Phase I. “We wanted between US and European exchanges. $200m) did not raise much money freedom to grow,” said Forbes – and to Rules around what companies can or can- there, either at IPO or afterwards. capitalize on a reasonably healthy IPO not do during closed periods either side But “we built trust, and a strong window and enormous investor interest of announcing results also vary – along reputation, among a small group of in gene therapy. There was no question with the length and timing of the closed UK investors” who spread the word, where to list, since, by the time of the period itself. “In the US, you can grant he said. IPO, “our big investors were already stock options during a closed period, but mostly US,” said Forbes. The company’s you can’t even talk about them [during Since 2016, Chi-Med – now worth programs “were further away [from the a closed period] in the UK,” illustrated $4bn- has been dual-listed on Nas- market] than the few investors in the Piers Morgan, CFO at respiratory disease- daq. That’s where most of its freely UK would have been comfortable with.” focused Verona Pharma PLC. floated shares are now traded. (The MeiraGTx raised $80m in February 2019 Verona Pharma is, however, dual-listed company’s biggest shareholder re- (led by JJDC) and almost as much again on AIM and, since 2017, Nasdaq. Morgan mains Hutchison Healthcare Holdings six months later. does not want to de-list from the UK Ltd.) Although Hogg acknowledges Remaining European Union-domiciled market at the moment, for fear of driving that the reasons to maintain a London can also open up funding opportunities a large number of UK investors out of the listing are diminishing, one big ben- that are not available to US companies. stock, putting further downward pressure efit remains: a loyal and increasingly BioNTech pulled in €50m in December on a share price already well down on its sophisticated base of (mostly institu- 2019 from the European Investment Bank 2018 highs. Respiratory-focused Verona tional) shareholders, who hold about – part of a scheme to boost the competi- is not working in a red-hot therapeutic 15% of Chi-Med’s shares. tiveness of the European economy. area or with a new-fangled technology

only just in the clinic, the conversation The last three years have been strong about whether to dual-list was not a long for both private and public biotech fi- ❚ MANAGING DUAL one, according to CFO Lee Kalowski. nancing, with a record-breaking $76bn LISTINGS Since many UK investors are now able raised in 2018, according to Informa to invest overseas, and more comfort- Pharma Intelligence’s Strategic Transac- A German shareholder in dermatol- able doing so, there appeared to be little tions. Most of the single- or dual-listed UK ogy player Biofrontera AG accused benefit in a dual listing. and European biotechs have not yet ex- the company of setting too low a perienced a significant market downturn. price for its January 2018 Nasdaq list- When Things Go Bad When that time comes, will the non-US ing, and of refusing to allow existing Nasdaq offers biotechs a deep pool of long- groups be at a disadvantage? Some talk shareholders to buy in at the lower term capital, but does not do so indiscrimi- of a ‘European discount,’ particularly for price. The complaint was eventually nately. Several companies – US and non- companies listed under the more relaxed dismissed by an independent legal US – have tried and failed to list. French foreign private issuer rules. But for the expert who argued that “the purpose gene-therapy player GenSight attempted most part, investors and management of the US placement is to attract US to join Nasdaq in 2015 but settled instead point to the composition of institutional investors, not to broaden the circle for a local Paris EuroNext listing the fol- investors and the quality of individual of German investors.” lowing year. Compatriot Poxel SA, which companies as the key determinants of re- is developing drugs for metabolic diseases silience during a downturn. If a European and NASH, announced plans for a US list- biotech “has a strong, highly educated over half its shareholders are individuals ing in 2016 which also came to nothing; institutional base with long-term funds, based in Switzerland. The Belgian, Dutch, it was a similar story for Copenhagen- it will be treated exactly the same as the Danish, Swedish and French exchanges listed Bavarian Nordic the same year. In US companies those investors invest in,” offer similar, mostly smaller, success sto- 2019, Switzerland’s ADC Therapeutics, said Forbes. A predominance of shorter- ries – though they too are few in number. whose lead antibody drug conjugate is in term investors, like hedge funds, may Meanwhile Asian exchanges – notably Phase II, pulled out of a planned $200m lead to steeper price falls, but that is no the Hong Kong stock exchange – have be- Nasdaq IPO. Many factors come into play different for US companies. “The market come more prominent listing venues, and in a decision to withdraw, to name a few: is sophisticated enough to judge the Chinese investors are pouring money into broader market conditions, driven by quality of the assets, and the company,” innovation abroad, and at home. political and economic issues; investor said Syncona, UK-based investor whose And some investors remember 2009, appetite for a company’s approach, team portfolio includes Autolus (and did in- when Nasdaq wasn’t looking so good. and therapy area focus; trial results; and clude Nightstar). That same year, Belgium-based Movetis, how well the ground is prepared with US That means that even in a bull market, spun out of Johnson & Johnson (and investors. Some Euro-centric boards and companies will be punished for poor re- now part of Shire Pharmaceuticals), management teams are reported to have sults. Nasdaq “is a market that can bring raised $100m on Euronext Brussels. “I been reluctant to engage with American significant reward, but also punish very remember receiving calls from US inves- institutional investors. harshly,” said GW’s Gover. tors asking how we managed it,” recalled Reverse mergers can provide a back- Antoine Papiernik, managing partner at door onto Nasdaq. London-based, AIM- Nasdaq Will (Probably) Always VC Sofinnova Partners in Paris. listed Mereo BioPharma Group reverse Be The Way Markets are cyclical, and trends merged into struggling, Nasdaq-listed Nasdaq’s predominant position for bio- change. But right now, nowhere is close OncoMed in April 2019, having pulled tech IPOs looks unlikely to fade. But that to rivalling Nasdaq for R&D-focused an IPO attempt in 2018. Mereo identifies is not to say it is for all biotechs – or that biotechs seeking access to public funds. and develops clinical-stage rare disease the tides will not turn. January 2020 has already seen four bio- assets; its lead compound is approaching Lower-risk, revenue-generating services- tech IPOs, according to Renaissance Capi- a Phase III trial in brittle bone disease. or tools-based companies can do very well tal. Among them: Cambridge, MA-based (Reversing onto Nasdaq is not a new on local European exchanges. Examples Black Diamond Therapeutics, which strategy: Germany’s Micromet did the include London Stock Exchange-listed raised $201m and is still in preclinical. same in 2006, merging into CancerVax protein research tools supplier Abcam IV124442 after the latter’s lead drug failed. Mi- PLC, or R&D technology and CRO firm cromet’s CEO at the time: Christian Itin, Evotec, listed in Frankfurt. The local hero READ MORE ONLINE who is currently running Autolus.) The effect is still real for drug developers, too: trend continues: regenerative medicine Switzerland’s Actelion became Europe’s The Only Way Is Nasdaq company Histogen and rare diseases- biotech success story with a single listing focused Timber Pharmaceuticals both on the local exchange (confidential Nasdaq View our interactive exhibits at: in late January 2020 announced plans to filings were prepared, but not used). Suc- invivo.pharmaintelligence. back onto US exchanges via struggling cessor firm Idorsia, worth $3bn, is also do- informa.com/ listed partners. ing just fine on the Swiss Exchange, where

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JN2181 Pharma Advert HBW US Letter.indd 1 2019/06/05 13:44 ❚ DEAL-MAKING: Medtech Markets Investors And Deal-Makers See Medtech Continuing To Ride The Growth Wave Into 2020

The consensus among investors is that medtech has been the best- performing part of health care for the past three to four years, and investment levels remain good. Seemingly all-encompassing of late has been companies’ preoccupation with digital strategies, but there is a lot more to this unique industry than just digital.

BY ASHLEY YEO ick your way through the complications and challenges faced by health care industries, and, as we move into the 2020s, investors will find medtech in a For investors, medtech may be behind good place. Make that continue to find, because, many health care investors biotech and pharma in terms of the view medtech as the stand-out life sciences performer in the recent past. weight of money invested, but combined This is seen in many aspects of performance, and not just in the pace of with digital – now said to be truly revenue growth. Levels of innovation, quality of management teams and capital deploy- coming of age – people are beginning to P ment efficiencies, among others, have been appreciated and recognized in this sector. pay serious attention to medtech. It is a more predictable industry too, in the view of David Mardle, a partner in Good- win’s Technology and Life Sciences group. Mardle leads the law firm’s newly opened But there is also a lot more to medtech Cambridge, UK office, where a team of life sciences and technology lawyers work on than just digital capabilities: how to bring devices to market in a complex cross-border M&A, venture capital, intellectual property, licensing and regulations. health care landscape remains the Medtech’s relative stability is valued by investors and pension funds alike. The sector province of the industry, which is is in some ways seen as a safe haven – not as risky as biotech and pharma discovery, acknowledged by the tech companies. but offering more growth upside than other sectors, Mardle said in comments to In Vivo. The composition of the top 25 global medtech companies has barely changed in the M&A deals remain notable in number – if past year or two – in the most recent annual Medtech 100 ranking, the only change was smaller than in recent years – and the the post-acquisition exit of St. Jude Medical Inc. But it is not a static industry: the big IPOs that are happening are mainly right- medtech M&A deals might have become rarer in 2019, but across the board deals have priced and are followed by a price uplift. not significantly slowed (even if deal sizes have). Johnson & Johnson, with its milestone- This is contributing to the health of the enhanced $5.8bn purchase of surgical robotics company Auris Health Inc. a year ago; innovative medtech sector, a stable and 3M Co., with two major deals in 2019; Stryker Corp. (regularly a key M&A player); and reliable industry for investors. Boston Scientific Corp. (with 12 deals in the past 24 months), notably have continued

22 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: Medtech Markets ❚

to fly the M&A flag in recent times. lot more to the medtech industry than just national health care systems. Yet there are always new companies factoring in digital capabilities. Identifying the growth markets is joining the industry and ready to address seemly becoming clearer. OrbiMed Ad- needs – societal as well as corporate. After Current Trends In Medtech VC visors’ Anat Naschitz said the trick was shelter and food, health/health care are Investment gauging the number of people a company next on the list of priorities for the aspiring That was also clear at the 2020 LSX could access with its therapy. “The big “middle class” globally, and medtech fits World Congress (4-5 February in Lon- medtechs are realizing that it’s about right in, addressing the needs of an aging don, UK), a forum for investors and ‘touching’ patients – companies that population and unmet clinical needs with life sciences innovators on leading touch patients are more scalable, those healthtech engineering. industry themes, such as the medtech that touch clinicians are less scalable.” The preoccupying theme at present value proposition, M&A trends, com- “The IPOs that happened in 2019 were for medtech corporates, the media, clini- mercial leadership and movements in mostly around home care,” she said. cians and caregivers alike, is the integra- the healthtech investment landscape. “Care is going into the home, and hope- tion of digital solutions and strategies Medtech has seen persistently strong fully that’s where this industry is going.” to cope with increased demand, more investor interest and opportunity in the Patient interaction with devices is a key quickly, with fewer staff and at improved cardiovascular segment, said Swiss- factor, and devices offering this facility levels of quality. The digital revolution, based venture fund VI Partners’ Arnd are setting the pace. Patients want small- the Internet of Medical Things (IoMT) and Kaltofen and Panakès Partners’ Alessio er, easier-to-use devices that are less the power of artificial intelligence (AI) are Beverina, two participants on an LSX intrusive in their lives. But with cost of transforming the industry. And where medtech investor panel. goods and cost-to-patient, a crucial ratio this is not quite happening in practice, it There is a growing interest in robotics, is at play: to drive and maintain patient is transforming the way people perceive which has become a major trend segment, adoption, prices must be appropriate and the medtech industry. with “four or five” major companies de- affordable to patients – manufacturers veloping surgical robotics. But investors must broach that affordability challenge. Digital Health Care Is “Finally must proceed carefully here. Kaltofen Coming Of Age” said his firm had not yet found a robotics Management Skills A Vital Add digital to medtech, and it becomes deal that it could be comfortable with. Component a life sciences investment proposition to Electrophysiology and the convergence Companies wanting to attract investment rival biopharma for its size and potential, of tech and devices were other investment need a very clear financing strategy and a said Sophie McGrath, a fellow partner of opportunities for his firm to consider. very thoughtful management that either Mardle’s at Goodwin. McGrath’s view is Lightstone Ventures’ Caroline Gaynor understands the needs immediately or that “digital health care is finally com- agreed that a glut of connected device has the ability to comprehend and adjust ing of age.” Medtech by itself still trails technologies were coming to the fore, as the company progresses. biotech and pharma, in the context of and the was a clear move towards more OrbiMed wants “the full package,” weight of money invested, but with digital, preventive medicine. She predicted that which means looking for a team that can people are now paying serious attention to prevention is going to be “huge,” and execute and has a clear understanding of medtech, whereas it used to be fringe, and also highlighted a trend towards chronic regulatory and reimbursement pathways. few knew how or even if it was regulated. care management packages. She added, Pfister noted that investors sometimes But there is now a constant sense that, The key was to cater for what insurance saw the need to bring more experienced with digital, health care is on the cusp of companies look for. “We are still seeing executives into a company. Precom- something transformative. The pool of good deal flow,” she said,” but they are mercial companies often needed to add investors in digital is broader, and tech in- at later stage.” management skills, he said, as they are vestors in digital health are less risk averse Looking at Europe specifically, Bev- “good at some things, but not always at on the technology. On the other hand, they erina observed that there has not been a ramping up sales.” are prone to underestimating the complex- “huge amount” invested in digital thera- Mardle noted the double benefit of this. ity of the health care regulatory landscape peutics, whereas there is a discernible “Talented, quality people not only bring and how to sell into different jurisdictions. trend towards that in the US. High-Tech themselves, but access to capital too,” However, it has not been all a digital Gründerfonds’ Martin Pfister offered a he said. They use their contacts to put show, said Jefferies Healthcare analyst similar view, saying his nine digital health together equity rounds that otherwise Raj Denhoy at the investment house’s portfolio companies find Europe hard to might not have been possible. “In such 2019 conference in London. He added access because of the differing health care a capital-intense world, that can only be a counterbalance: the intricacies and systems used around the continent. a good thing for early-stage and growth- methods of bringing medical devices to Beverina was also somewhat downbeat stage companies,” he added. the market, the complexities of the health on diagnostics, which in his view, did not Goodwin itself has recently strength- care landscape, and the structure of the seem to attract investors in large volumes. ened its life sciences team in Europe, with sector, with its mix of hospitals, surgeons, However, he noted great interest in the Mardle and McGrath joining the London payers and manufacturers, show there is a detection of sepsis, a huge burden for office in 2019 and 2018, respectively. The

standalone device does not have a digital liquidity, but the major option in Europe component. There are exceptions, for remains the M&A route. example, there is yet to be a catheter that Investors across the board are now provides information on real-time blood seeing the M&A market as waiting a little flows. But it is probably only a matter longer before offers are being made for the “It is certainly a very time before this happens. younger companies, Naschitz said. She SVB’s report valued VC deal activity observed that, while private equity (PE) strong funding in European medtech at $907m in 2019, has always complained that the public up from $538m in 2018. This was skewed corporates went in too early for M&A plays, environment at somewhat by two big “outliers,” Babylon leaving little, that is now changing too. Health ($550m series C funding) and CMR In addition, consolidation of the indus- the moment.” Surgical Ltd. ($240m series C). “But strip try is narrowing the landscape of buyers those away and there is still a cascade in traditional medtech for exits of, say, Sophie McGrath effect,” said Haque. The bigger trend is between $300m and $500m, sometimes that technology investors, who never to just three to four companies per deal. used to invest in health care, are now McGrath said Goodwin had seen a lot looking at driving health care investment of activity in private investment across returns in their portfolios, and through a the whole sector – medtech, digital and channel that they understand – digital. biopharma. “It is certainly a very strong That shows a convergence on the investor funding environment at the moment,” expansion has given the firm what Mardle side, as well as on the technology side. she said. For her, how the exit market claims is the best and largest tech and life Haque said, “I still don’t expect to pans out this year is one of the big ques- sciences team in Europe offering legal see a healthtech investor invest purely tions. Others are what will happen in the service to emerging growth companies in medtech, but if it’s led by a digital US IPO market, and whether M&A comes and those that invest in them. component as a key part of the economic back to fill the breach potentially created Silicon Valley Bank’s (SVB) UK head model, then that is something they’d be by more challenging public markets? of life sciences and health care Nooman more attuned to getting into.” Conversely, There has been much talk of medtech Haque agreed that quality management if the digital element was a bolt-on after- companies’ valuations being high, and was of “massive” importance from an thought on a tangible medtech product, a perceived wisdom that rounds are cur- investor’s point of view. Speaking to In then it would be harder for a tech investor rently overvalued. But McGrath feels that Vivo, Haque said investment was all about to address. the overvaluations are the outliers, and the people. “No credible investor would US medtech investments rose by that a lot of “right-pricing” is being seen. invest in great technology if the company $400m to $4.02bn in 2019. A significant With low interest rates having been had an inadequate team.” This is because amount of this was in “enabling tech- the norm for some time, medtech is be- the path for innovation is so uncertain, nologies” – workflow and data manage- ing seen as a safe haven, with its growth and so much can go wrong along the way. ment tools, security, etc. – as well as in upside, and biotech and discovery being There are no guarantees for anything, but the more front-facing technologies, and seen as more risky. There is consequently management is a “must-have.” patient-doctor apps, etc. pressure to invest in medtech and digital, Haque was speaking after SVB had As to which individual medtech seg- from the pension funds’ governance released its 2020 Healthcare Investments ments are benefiting most, Haque said: point of view. Many new funds have been And Exits report, which spoke of device in- “The increase is across the board.” The set up, meaning there is a lot of money vestments in the US and Europe increasing US, in particular, realizes that there needs out there looking for good homes, accord- for a second successive year, led by large, to be more investment in “efficiency” and ing to Goodwin. late-stage deals. While in 2019, medtech in infrastructure components, where he M&A had one of its weaker years for deal said there has been “a bit of an uptick.” M&A Outlook: values, IPOs – eight in number – set new Goodwin’s McGrath observed that a lot Bolt-Ons To Continue highs in pre-money values and proceeds, of investment is going into digital plat- There are still opportunities for larger SVB reported. It predicts medtech IPO forms, such as online treatment forums, mergers but medtech players are now activity will be strong again in 2020. professional telemedicine platforms and being very thoughtful about where they Investment dollars in devices in 2019 online interfaces for mental health users. want to succeed, what to divest and increased by 15% and 43% compared whether to acquire in more core areas. with 2018 and 2017, respectively, accord- IPO Or M&A? Whether mega or mid-cap, medtechs ing to SVB. In healthtech, devices with The received wisdom on product launch- are regularly looking to see if they have a software element and health care soft- es has for a long time been “Europe first, non-core assets. ware jointly increased by 13% and 95% US later.” But that might be changing. While mega-mergers are hard to pre- over the same periods. In many segments And most of the recent medtech IPOs dict, bolt-ons – adding adjacencies – will of medtech, it is increasingly rare that a have been in the US. IPOs are one route to still be a factor in the next 12-24 months.

24 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: Medtech Markets ❚

Bolt-ons are a way of addressing how a Do Macro Factors Impinge position,” said Mardle, and will not be company can ensure sufficient product On Investment? harmed irreparably. to distribute through often sophisticated The EU Medical Device Regulation Similarly, the US 2020 election is sales and distribution channels. Stryker, (MDR) will come into effect on May 26 unlikely to have a material impact on for instance, is active in the M&A market and has begun to cause mild-to-severe early-stage investment. The market not only to identify central acquisition panic in some quarters, with observers had managed an election every four targets but also to diversify into areas fearing seriously negatives effects on years, said Mardle, who suspects that that are not so obvious. innovation, company portfolios, com- the outcome in late 2020 will drive any But how do such groups find growth in panies’ continued viability even, and long-term trends. “We haven’t seen any a field where acquisitions are becoming the delivery of patient care. But Mardle indications that people in this sector more difficult? The chase for growth is believes that experienced investors will are changing their investment decisions the biggest and ultimate aim, and putting be more sanguine, taking the long view. over it.” Investors fund great technology capital to work in ways that will leverage Haque added that it might happen and great management teams, regard- growth is, as most medtechs see it, the that less experienced investors, who see less of where they are physically located; whole game. in the MDR longer timescales and harder and, because of the long lead times for M&A has always been a major compo- processes, back away. The fundamental commercialization, they are often not nent of the industry, and both the devices question for him is: Does the landscape so focused on macro issues, especially industry and the investment community shift such that it does not make investor in the earlier stages. have come to view the medtech sector as propositions feasible within the time “So long as interest rates remain low, a growth engine. The accepted wisdom frame of a fund? Many funds are 10-year we see no reason why the capital flows is that companies in this space should vehicles, but if the MDR, say, doubles the into innovative medtech won’t continue be able to grow in the mid-single digits, regulatory timescale, then there might very strongly, with large amounts com- and much higher, currently, in the case of be huge implications for venture inves- ing from the US and China,” said Mardle. surgical robotics manufacturers. tors. The jury is still out on that. China is going through unusual times at Surgical robotics help to move people Mardle’s view is that the impact of present, with the Covid-19 virus disrupt- out of hospital much quicker, thereby MDR will be assimilated – albeit not ing normal business procedures, but in transforming the delivery of health care without its chaotic moments – based general, demand for improved patient at all levels, said Mardle. It continues to on the significant weight of capital outcomes in China is immense. generate investor interest, even though invested. As to Brexit’s impact on the And the expectation of investment in the high upfront costs can be off-putting. medtech industry, the UK is an es- healthtech is large. As such, the current Some technologies can be financed tablished center of innovation and it coronavirus crisis is expected to drive through opex (operating expenses) rather seems probable that “it will retain that those trends, not mitigate them. China than capex (capital expenditure) in most has its own technology scene, with lo- countries. This offers greater budget flex- cal rivals to the US-based global tech ibility, suggesting that these technologies giants, but it’s still an opportunity for could find it easier to get sales traction. investment. “There is huge potential in the dis- placement of humans as providers of “So long as interest The Long View Is A Priority care,” said Mardle. The question with For the big corporates, the long view is robotics is whether people are truly ready rates remain low, we the priority when balancing in-year op- to accept the proposition of “taking the erational issue with strategic growth ini- human out?” Robotics are a long-term see no reason why tiatives. Back at the LSX World Congress, proposition and the potential is still Medtronic PLC’s VP, strategy and busi- significant. A lot of capital going into the capital flows into ness development, EMEA, Charity Kufass, robotics is actually “impact capital.” said while there is so much uncertainty in Impact capital is increasingly impor- innovative medtech the world, “we run the business in such a tant for digital health propositions that way as to focus on the long-term strategy focus on “mission-based” digital health won’t continue very and what we need to achieve.” wellness – rather than clinical care – J&J company group chair of medical enterprises which are socially- as well as strongly.” devices, EMEA, Hani Abouhalka, agreed: commercially-driven, and address gaps “Industry factors are not impacted by in the market where pure private sector events in a one- to two-year cycle. There plays may not venture, due to lack of David Mardle will always be shocks along the way, and returns. Pure profit is not the sole aim of we manage for the long-term, as well as impact capital. “It’s a sector that attracts using commercial discipline.” people with social concern,” said Haque, IV124447 and capital seems to be responding.

“Growth gaps” were the driver for a record-breaking M&A year – but CEOs must remain disciplined when pursuing opportunities, or pay the price down the line.

BY ANDREW MCCONAGHIE hat are the big driving forces behind biopharma M&A? EY unveiled its annual Firepower report on biopharma M&A trends in January 2019 was a landmark year for biopharma 2020, based on industry metrics as well as a survey of dealmakers M&A. Consultancy firm EY reported that in the sector. the value of deals reached $357bn, It identified four factors fueling last year’s record-breaking activity: even before December was added to the 1) readily available capital for deals, or “Firepower”; 2) slowing revenue growth at life year’s tally. W sciences incumbents; 3) a recalibration of the US and European public markets; and 4) a desire to deepen therapy area focus. However, this new high was not due The second of these factors is linked to what EY says are “growth gaps” – the dif- to a greater number of M&A deals, but ference between a company’s revenue growth and the overall industry’s sales expan- rather a relatively small number of large deals. The year saw two mega-mergers: sion. Thirty-nine percent of the dealmakers who responded to the EY survey listed Bristol-Myers Squibb Co.’s acquisition of the need for revenue growth as one of the top two reasons for signing deals. (Access Celgene for $74bn, announced in January to new innovation or technology was the other top reason.) 2019, and AbbVie Inc.’s $63bn move for EY found a number of companies falling into an “acute growth gap,” where the dif- Allergan PLC, announced in June. ference in absolute dollars between their sales growth and the total industry’s revenue growth exceeds 10% of the company’s average annual revenue. Its analysis of the Alongside these were several other sector in 2017-2018 found that the majority of the sector’s biggest companies – 18 of 23 big-ticket purchases, including Eli Lilly & (78%) – had acute growth gaps. Co.’s $8bn acquisition of Loxo Oncology Of these 18 companies, nine signed deals in 2019, either through mega-mergers or Inc., Roche’s $4.3bn move on Spark bolt-on transactions, or a combination of the two. However, the research also con- Therapeutics and Pfizer Inc.’s buyout of cluded that these deals only reduced the growth gaps for five of the nine companies. Array BioPharma Inc. for $11.4bn. A clear message that M&A – especially what EY calls the “traditional product focused M&A” – cannot help companies close this gap on its own.

26 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: Market Intelligence ❚

Biotech Valuations Too High, of many factors: finance, opportunity, Complains Pharma synergies between the two company port- While biopharma’s 2019 started with a folios, the potential to find hidden gems in bang, with the BMS-Celgene and Lilly- pipelines and scientific platforms, cultural Loxo deals both being announced in time fit and, not least of all, timing. for the J.P. Morgan Healthcare Conference Another factor watched closely is just in early January, the first two months of how “leveraged” companies finances 2020 have been without any significant are in terms of balancing the spending M&A deals. of cash reserves against managing their A number of explanations have been debt. Opining on this subject recently proffered for this quiet spell, including was Roche’s long-serving CEO, Severin concerns about the global economy and Schwan, who said analysts were now fears of a possibly pharma-unfriendly concerned the company has not spent outcome to the US elections this coming enough of its cash – whereas back when November. Still, one of the more substan- it acquired Genentech for $46.8bn in tial reasons for the lack of deals so far in 2009, the worry was it was overstretch- 2020 is that asking prices for mid-sized ing itself. Schwann said there was “no biotechs and their assets have become science” to deciding on how to strike this inflated, at least in the eyes of big pharma balance, but that that M&A was in any buyers. This view was confirmed in the EY Gilead can bring case more determined by market prices survey, which found 69% of respondents and opportunities. saying that the “valuation gap” between new growth-driving “Late-stage assets remain very pricey, buyers and sellers was the largest it has there is scarcity around those. And in been since 2008. products to market most of those transactions we actually That dynamic was revealed in a moment step out [of the bidding] for economic rea- of humor during the J.P. Morgan meeting through both internal sons,” he commented at the company’s in San Francisco in January, at a satellite 2019 Q4 earnings investor meeting. meeting held by venture capital firm Med- and external “The focus continues to be on earlier icxi. Its partner Francesco De Rubertis was stage deals, as typically that’s where we hosting a panel debate with a stellar line up innovation, but the can bring in our capabilities and assets, of pharma execs – Giovanni Caforio, CEO of and be an interesting partner for those BMS, Jennifer Taubert, head of pharma at company has a high companies. It’s not only about price, it’s Johnson & Johnson and Novartis CEO Vas about bringing [that company] to the next Narasimhan. Francesco made the audience sense of urgency inflection point and generating value laugh when he rather bluntly asked them for the partner rather than just the plain to reveal what their next M&A targets were. around business exit,” Schwan said. But Novartis’ CEO Vas Narasimhan shot Nevertheless, he sees M&A as intrinsi- back with his own zinger: “Francesco, can development. “We are cally opportunistic. “Then again, if there you tell me, don’t you think biotech valu- are opportunities we will seize them, and ations have got completely out of hand?” going to take we will be very willing to take external Said in good humor, this theme is clearly innovation into the company. So that’s near the top of minds in big pharma, who appropriate risks.” opportunistic … I don’t see those dynam- want to do the deals but often cannot justify ics changing.” paying multi-billion-dollar price tags on what could be risky or mediocre assets. Daniel O’Day Many M&A Deals Fail And that is exactly what companies stand To Deliver Growth accused of when they unveil what is seen as One of the all-time most successful a poor value deal. A recent example being biopharma M&A deals was achieved by Lilly’s acquisition of Dermira and its atopic Gilead Sciences, when it purchased Phar- dermatitis drug candidate for $1.1bn. masset for $11bn in 2011. Many analysts at the time thought it had overpaid, but the M&A Is An Art, Not A Science deal brought with it the molecule which As much as investors, analysts and big became Sovaldi (sofosbuvir), the begin- pharma try to make the M&A process ra- ning of a multi-billion-dollar hepatitis C tional and numbers-driven, a good transac- franchise for the company. tion remains as much an art as a science. Gilead has been under pressure for That is because it involves a fine calibration several years to replicate this success.

Exhibit 1 10 Major Biopharma M&A Deals In 2019

MERGER/ACQUISITION DATE ANNOUNCED THERAPY AREA/PLATFORM VALUE

BMS + Celgene January Oncology/Hemato-oncology $74bn

Eli Lilly + Loxo January Genetically defined oncology $8bn

Roche + Spark Therapeutics February Gene therapy $4.8bn

Merck & Co + Peloton Therapeutics May Small molecule oncology $1.1bn

Pfizer + Array Biopharma June Small molecule oncology $11.4bn

AbbVie + Allergan June Aesthetics, eyecare, neurology $63bn

Mylan + Upjohn (Pfizer) July Generics $12bn

Vertex + Semma Therapeutics September Stem cell therapy – type 1 diabetes $950m

Novartis + The Medicines Company November RNAi $9.7bn

Astellas + Audentes December Gene therapy $3bn

SOURCE: In Vivo/Scrip

While the company has enormous M&A edged a “high” sense of urgency around tunities in a few “hot” therapy areas, such firepower thanks to its cash reserves, business development. “We are going to as CD20/CD-3 bi-specifics, other mid-stage finding an opportunity as golden as take appropriate risks,” he said on the oncology de-risked assets, as well as Phase Pharmasset has eluded it so far. company’s 2019 Q4 results call. I/II oncology assets in solid tumors and In 2017, under pressure from a hepati- Gilead will look to several key read- hematology. tis C franchise in freefall, the company outs from its existing pipeline to bring bought cell therapy specialists Kite Phar- good news in 2020. Among these are the More Regulatory Scrutiny ma for $12bn. Nearly three years on, it is Phase III data for Yescarta in relapsed/ While M&A has become a way of life apparent that that acquisition is falling refractory diffuse large B-cell lymphoma for the sector, it seems it may also have short of recouping this outlay. Kite’s first (DLBCL) patients during the second half to accept increased scrutiny of its deal- product, chimeric antigen receptor T cell of 2020, while another CAR-T, KTE-X19, making, with 2019 seeing an apparent sea (CAR-T) therapy Yescarta is a ground- is under review in the US and EU for re- change in market regulators’ attitudes. breaking innovation, and reached rev- lapsed/refractory mantle cell lymphoma. The Federal Trade Commission (FTC) enues of $456m last year. This is short of The company has set itself the target approved Bristol-Myers Squibb’s $74bn expectations, but worse still, Yescarta’s of launching “10 new transformative merger with Celgene in November, but growth looks to be stalling, putting its therapies” in 10 years, and aims to do so only after a protracted review which con- aspirations to reach blockbuster status by expanding via internal and external included with it calling for the selling off of in doubt. novation. On the 2019 Q4 results call with Celgene’s psoriasis blockbuster Otezla, Gilead has just taken a hefty $800m analysts, Gilead’s leadership team pointed citing possible anti-trust concerns about write-down on Kite Pharma, related to 33 strategic partnerships and investment the psoriasis market. This in turn created to an abandoned program in indolent deals since January 2018, and said it would an opportunity for a competitor to buy up non-Hodgkin lymphoma. This adds to pursue more “transformative partnerships” an established blockbuster, and in August an $820m write-down last year related such as that with Galapagos and small-to Amgen snapped up Otezla for $13.4bn. to Kite’s abandoned multiple myeloma medium-sized bolt-on acquisitions. Ana- The need for this sell-off was the FTC’s candidate KITE-585. lysts at Jefferies predict that the company insistence that BMS’s Phase III TYK-2 CEO Daniel O’Day has said Gilead is likely to make bolt-on acquisitions in inhibitor BMS-986165 was an advanced can bring new growth-driving products 2020 in the gene-therapy and gene-editing late-stage candidate that could compete to market through both internal and space. The sell side analysts suggest Gilead directly with Otezla (apremilast). external innovation, but he acknowl- should look out for some promising oppor- This kind of granular intervention from

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regulators was virtually unheard of be- leadership at Spark already this year, tial $2.7bn equity and co-development fore last year, but now looks like a trend, helping to plan how we use their re- and co-marketing deal which should as AbbVie also faced similar probes into sources and the worldwide resources of help Amgen break into the increasingly its $63bn acquisition of Allergan. In Sep- Roche to help accelerate the programs important China market, and help fuel tember, the FTC filed a second request they have ongoing, and additional invest- BeiGene’s aspiration to be a fully-fledged for information on the AbbVie-Allergan ment for Spark in Philadelphia to expand global pharma company. In return, Am- proposed deal, potentially prompted by into new disease areas.” gen gains a 20.5% stake in BeiGene. calls from consumer groups to examine BeiGene will commercialize three or even block the merger on anti-trust Alternative Strategies: Amgen products in China including grounds. This prompted Allergan to Gilead And Galapagos Xgeva/Prolia (denosumab) and two oth- volunteer the sell-off of two drugs, brazi- Armed with plentiful cash, but with few ers – Kyprolis (carfilzomib) and Blincyto kumab and Zenpep (pancrelipase). sure-fire M&A opportunities that are (blinatumomab) – which are in Phase III A third deal which was also much worth the risk and major undertaking development in China. delayed in gaining anti-trust clearance of an outright acquisition, companies More unusually, the deal also sees was Roche’s acquisition of gene therapy are looking at alternative deal-making BeiGene take over development for the company Spark Therapeutics for $4.3bn. strategies. One very notable example of Chinese market, taking on 20 Amgen pre- The Federal Trade Commission (FTC) this was the deal struck between Gilead clinical molecules. Altogether, BeiGene and the UK’s Competition and Markets and Belgium/Netherlands-based biotech will set aside $1.2bn for the development Authority (CMA) both probed the trans- Galapagos in July 2019. costs of the candidates, which might action, with final clearance given in The deal is a novel approach to big also include Amgen’s KRAS mutation- December 2019 without either authority pharma-biotech tie-ups – de-risking targeting drug AMG510. demanding the sale of any assets. the expenditure for Gilead and allowing The authorities’ original line of inquiry Galapagos to retain its independence. It Opportunism Versus was not clear, but it transpired that one comprised a $3.95bn upfront payment, Franchise Building concern was that Roche might sabotage a $1.1bn equity investment stake in As Roche’s Schwan pointed out, many Spark’s hemophilia program in order to Galapagos (22% of the company) plus M&A deals are driven by timing and maintain the market share of its new he- opt-in payments covering six molecules opportunity, but EY says that a planned mophilia biologic Hemlibra (emicizumab). currently in clinical trials, and more than strategy to build expertise in key areas The FTC eventually concluded that 20 preclinical programs. Importantly for is becoming more common – and with Roche would have no incentive to delay Galapagos, the agreement also includes good reason. or terminate Spark’s hemophilia A gene a “standstill” guarantee that Gilead will EY’s analysis suggests that companies therapy, and waved the deal through. not move to acquire it over a 10-year which pursue this strategy see stronger Given the disappointing performance period. For Gilead, the deal looks like returns on their investments. It says that seen in similar acquisitions of cutting- a wiser bet than an all-out acquisition, in 2019, almost every major biopharma edge platforms, such as Gilead’s acqui- allowing it to keep its options open on acquisition increased both the buyer’s sition of cell therapy company Kite, the Galapagos’s promising but still risky overall therapeutic focus and its pro- onus is now on Roche to make the take- antibody pipeline. jected five-year compound annual growth over work. Speaking at Roche’s recent Speaking at the Jefferies Healthcare rate. It found that 20 of the 25 deals it 2019 Q4 investor meeting in London, Conference in London in November, analyzed had high overlap in terms of its pharma division head Bill Anderson Galapagos CEO Onno van de Stolpe said: the therapy area or indication of the said: “We expect big things from Spark “I hope this model is followed more in the buyer’s existing portfolio and the target in the future.” industry, rather than the outright acquisi- company’s lead product. Such deals One company which does look to have tions that we’ve seen in the past, where accounted for nearly 45% of last year’s cracked the commercial challenge of gene innovation is sort of secondary. Nothing M&A total, with two notable exceptions: therapy is Roche’s neighbor and rival, No- good comes out of these big pharma AbbVie’s acquisition of Allergan, and Ver- vartis, which has seen its spinal muscular acquisitions.” tex’s acquisition of Semma Therapeutics. atrophy (SMA) gene therapy Zolgensma Key to the success of the partnership is AbbVie’s CEO Richard Gonzalez ratio- (onasemnogene abeparvovec; acquired the approval of JAK1 inhibitor filgotinib nalized its move for Allergan and its block- with AveXis for $8.7bn) get off to a flying in rheumatoid arthritis, for which Gilead buster Botox franchise as a deliberate start following its US launch last year. submitted its data to the FDA in December. diversification beyond its dependence on Roche will look to match this kind of Also expected this year is Phase III data Humira. However, there was more than a success, though in the hemophilia gene with the compound in ulcerative colitis. touch of opportunism in the move as well. therapy space it is trailing significantly A deal of similar proportions and sig- Allergan’s stock had lost more than behind BioMarin, which is set to gain the nificance for the future direction of the half its value from its peak in 2015, the first approval later this year. sector was that struck between US big year when Pfizer had been ready to pay Anderson commented: “We have spent biotech Amgen and China’s BeiGene. triple that price, only for the deal to fall a considerable amount of time with the The companies signed a very substan- through.

All the same, while Gonzalez saw the Big Pharma Is Streamlining Allergan acquisition as something of a The flipside of concentrating on key areas bargain, many investors were far from of expertise and high growth, innovative convinced, judging Allergan’s declining therapy areas, is the disposal of non-core valuation very warranted. assets and divisions. A prime example When the deal was announced in June of that is Pfizer, which has been in the last year, AbbVie saw its share price process of disposing its non-pharma divi- plummet 16%. Like several other peers sions for a number of years. This process who splashed out in 2019, AbbVie will continued in 2019, with the spin-off of its be under scrutiny to wring as much value generics portfolio, Upjohn, into a merger from this deal as possible, once it gains with Mylan, with Pfizer receiving a $12bn anti-trust clearance, which is expected payment. in early 2020. Another downsizer is GlaxoSmith- The other exception to the rule iden- Kline, which recently provided more tified by EY is Vertex’s acquisition of detail on the planned spinout of its con- Semma Therapeutics. Vertex gained sumer health division joint venture with US approval for its triple therapy for Pfizer. This process will give a slimmed cystic fibrosis, Trikafta (elexacaftor/ down prescription medicines and vac- tezacaftor/ivacaftor) in October. This is AbbVie’s CEO Richard cines focused GSK more flexibility to a blockbuster in the making, but one invest more into innovative medicines. that the company will most likely find Gonzalez rationalized The company is still integrating its difficult to surpass in terms of treating $5bn buyout, oncology-focused Tesaro CF. This therefore requires the company its bid for Allergan as but it seems highly likely that the com- to broaden its horizons into other disease pany is clearing the decks, and setting areas. Semma is pursuing the ambitious a deliberate aside capital, to make another strategic goal of finding a cure for type 1 diabetes. acquisition to bolster its pipeline. The company is focused on transform- diversification beyond While this process of divestment and ing undifferentiated pluripotent stem acquisition, diversification and special- cells into insulin-producing pancreatic Humira. However, ization is cyclical in the sector, this latest beta cells that could be transplanted into round of changes is being driven, at least patients. This is a move into cutting edge, there was more than a in part, by an acceleration in science disruptive innovation, a high stakes bet – such as genomics, big data analytics increasingly seen across the industry. In touch of opportunism and artificial intelligence, as well as new terms of timing, then, Vertex hopes to platforms such as cell and gene therapy. avoid the kind of problem now plaguing in the move as well. This gathering pace in innovation, along Gilead, which is still looking for its next with the ever-present need for revenue big product long after its flagship hepati- growth, will help transform the sector tis C franchise has already declined. But over the coming decade, with M&A an as Gilead has seen, these big bets don’t integral part of the process. always pay off. IV124448

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JN2181 Pink Sheet Advert HBW US Letter.indd 1 2019/06/05 12:59 ❚ DEAL-MAKING: R&D Strategies 2019 Global Biopharma R&D Productivity And Growth Ranking

An analysis of the R&D productivity of the world’s 30 largest public pharmaceutical companies reveals an overall drop in R&D productivity, but this should not hide the fact that some companies are still performing extremely well.

BY MARKUS THUNECKE AND ERIKA KUCHEN

he top companies in Catenion’s maintain its strong performance is Gilead annual survey have tradi- Sciences Inc. It is still high in the ranking ❚ ABOUT THE AUTHORS: tionally been emerging and (R&D productivity #3), but mostly based Markus Thunecke, PhD (markus. mid-size players rather than on HIV and hepatitis C marketed products [email protected]), is a big pharma. The same is true reflected in a strong long-term NPV, while founding senior partner of Catenion, Tin 2019 as 6/10 qualify as mid-sized in the pipeline position (#16) is already a biopharma focused strategy the R&D ranking and 7/10 in the com- pointing towards future troubles. In line consulting firm. Erika Kuchen, PhD, pany ranking (that includes historical with this, Gilead is also not present in the is an analyst at Catenion and forecast growth in sales, profit and company top 10 ranking anymore (#12). ([email protected]). market cap). Emerging mid-size pharma After the rapid decline of its sofosbuvir company Alexion Pharmaceuticals hep C franchise, Gilead is highly depen- Inc. (a first-time entrant) and Regeneron dent on the performance of HIV combo pill tioned whether industry is over-spending Pharmaceuticals Inc. top the company Biktary that is responsible for a massive on oncology at the expense of other areas performance ranking, but only Regeneron $54bn in value or ca. 65% of its market of unmet need. On the other hand, the is in the top 10 in the R&D ranking (#8, cap and is forecast to peak at $11bn in increasing scientific understanding of Alexion #13). Both companies are now en- sales. Gilead’s diversification strategy into oncogenic pathways, the explosion of joying the fruits of their strong R&D from oncology, culminating in the acquisition immuno-oncology as well as the ability to previous years, at the same time both are of Kite Pharma for $11.9bn in 2017, will stratify patient populations make oncol- struggling to replenish their pipelines with have to accelerate if this area is to become ogy fertile hunting grounds for countless high value assets (see Exhibit 1). a serious second pillar next to its virology biotechs and pharma companies. The Alexion is feeling the heat as activist stronghold. CD-19 CAR-T therapy Yescarta analyst consensus forecast for oncology investor Elliott Management has a dif- (axicabtagene ciloleucel) is forecast to of more than $240bn by 2024 reflects ferent view of the outlook than manage- achieve blockbuster sales, but there is this increasing translation of scientific ment, and the board and is pushing for a still a long way to go to expand patient advances into clinical benefits. sale now. The journey from one-product populations and clear supply chain and success to becoming a sustainable bio- reimbursement hurdles; third quarter Where Are Novartis And Roche? pharma is not an easy road, and only sales in 2019 came in at only $118m. Novartis AG and Roche are frequently few companies, such as Regeneron, have cited as examples of outstanding R&D succeeded without being acquired along Oncology Is Leading The Way productivity, so why are these two the way. Alexion has been able to establish In the 2019 R&D productivity ranking, on- companies only in the mid-field in the an industry leading complement factor cology makes up 46% of the value across R&D ranking (#15 and #14)? Both had franchise with Soliris (eculizumab) and the top 30 pharma companies, dwarfing all considerable success with new product Ultomiris (ravulizumab) that are expected other areas (the next in line is systemic anti- launches and lifecycle extensions, but to combine for more than $5bn in sales by infectives with 11% and endocrine with what is often overlooked is that R&D pro- 2021. It also successfully launched Stren- 9%). Oncology has also seen the biggest ductivity is based on both value created siq (asfotase alfa) for hypophosphatasia absolute increase in value from 2018 to 2019 by the pipeline and products launched in that is expected to achieve blockbuster (followed by CNS). This value distribution recent years, as well as the sum of R&D sales by 2024. The issue is that there is is a result of the industry’s increasing focus costs, plus adjusted costs of M&A over a only one higher value asset, an SOD-1 on high-unmet need specialty indications 10-year period. inhibitor for amyotrophic lateral sclerosis such as oncology and rare diseases. Both Novartis and Roche have spent (ALS) and Wilson’s disease, in its pipeline. The dominance of oncology has considerable amounts on R&D and bolt- Another company that is struggling to reached a point where it could be ques- on acquisitions making them top spend-

32 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: R&D Strategies ❚

Exhibit 1 R&D Productivity And Corporate Growth Ranking

R&D PRODUCTIVITY COMPANY PERFORMANCE

Final Final Corp. NPV Momentum Long-Term Growth Past Forecast Rank Company (Pipeline NPV) (All NPV) Rank Company Performance Performance

Alexion AstraZeneca 1 12 3 1 Pharmaceuticals 1 1 Regeneron Biogen 1 3 6 2 Pharmaceuticals 4 5 TOP 3 Gilead Sciences 16 2 5 3 Novo Nordisk 5 6 Johnson & Eli Lilly 3 1 7 4 Johnson 11 9

3 Novo Nordisk 19 1 5 Amgen 7 14

Bristol-Myers Amgen 6 6 9 5 Squibb 9 12

7 Merck & Co 23 5 5 Allergan 2 19

Regeneron Merck & Co 7 Pharmaceuticals 26 4 8 14 8

9 GlaxoSmithKline 7 12 9 Eli Lilly 14 10

10 Astellas Pharma 5 4154 9 Eisai 23 1

SOURCE: Catenion ers over the 10-year period included in in our Corporate performance ranking is but a focus on R&D rejuvenation could be this analysis: in 2018 Roche spent $9.8bn its poor past performance (#26), while the a template for other large organizations on pharma R&D (#1) and Novartis $8.2bn forecast performance reflects its strong who find themselves in a similar position. (#3). To create value through such enor- R&D productivity (#4) spot. Biogen’s top position may seem unex- mous R&D spending, the portfolio value AZ’s impressive turnaround story that pected when considering the initial diffi- increase has to match at least the $8bn- started with the arrival of Pascal Soriot culties with its Alzheimer’s antibody adu- $10bn p.a. plus a large sum (more than from Roche continues: its two biggest canumab that had been discontinued after $1bn) that is typically spent on bolt-on products both in terms of value and po- an interim futility analysis in Phase III in acquisitions. It is tremendously difficult tential are EGFR inhibitor Tagrisso with March of 2019. Since then, the events took to implement a scalable model of supe- $40.4bn in value and $8bn in forecast an unexpected turn upon re-analyzing the rior R&D productivity. peak sales, followed by PD-L1 inhibi- data and finding a positive signal in one tor Imfinzi (durvalumab) with $24bn in of the two Phase III studies in October Productivity Champions value and $5bn in forecast peak sales. 2019. Consultations with the FDA led to There are four large pharma companies The AstraZeneca case exemplifies that a the decision to file for approval. It was one that have high positions in the 2019 R&D complete turnaround is possible even for of the most unusual biopharma stories of ranking, the most notable one is back-to- big pharma companies that many people 2019, especially as this is not only about back winner AstraZeneca PLC, sharing the had already written off. The mixture of aducanumab but also about the validity #1 spot with Biogen Inc. The only reason strong leadership who realize the solu- of the beta-amyloid hypothesis, that was why AstraZeneca does not have a top spot tion is not another round of mega mergers largely dismissed after the nth Phase III

Exhibit 2 Method Used To Calculate R&D Productivity

R&D PRODUCTIVITY RANKING CORPORATE GROWTH RANKING MOMENTUM RANKING LONG-TERM RANKING Calculate historical and Dec 2019 pipeline eNPV Dec 2019 pipeline + marketed forecast CAGRs for: (analyst consensus) eNPV (analyst consensus)* • Pharmaceutical Sales Sum of 2009-2018 R&D Sum of 2003-2012 R&D • EBITDA expenditures (WACC 7%) expenditures (WACC 7%) • Market Cap (historical only)

Primary deal Commercial Hybrid Pipeline driver Marketed Rationale for Marketed products products No marketed M&A (value and <€1bn and >€1bn products Rank companies drivers) pharma sales pa pharma sales pa independently for historical % M&A costs and forecast data incl. premium 25% 50% 80% allocated to R&D costs

Ranked independently and then combined – Momentum ranking 1/4 + Long-term ranking 3/4 Calculate overall ranking – the three metrics are SOURCE: Catenion weighted equally

failure in a row. Novo Nordisk Sits Pretty In Top 5 kind of outperformance. The mid-term Beta-amyloid has now staged a come- Novo Nordisk AS is the only company outlook appears very strong as loss of back, and many stock analysts have that has defended a top five position in exclusivity of semaglutide is not before re-entered aducanumab into their Bio- the ranking since its inception in 2014. 2031, this should give Novo Nordisk gen valuation models as the lone high In this year’s survey, Novo Nordisk is enough runway to diversify into other value asset in the pipeline ($2.2bn peak the only company to be in the top five in areas such as obesity, NASH and dia- sales to Biogen, $4.4bn NPV). Due to both the R&D Productivity and Company betic complications. Interestingly, Novo the uncertainty of the drug reaching Performance rankings. Novo Nordisk is Nordisk has unsuccessfully tried several the market and the high pipeline value a prime example of the power of highly times already to diversify into areas such concentration, Biogen’s current position focused R&D in the endocrinology space as inflammation, oncology or neurosci- as a top company is definitely at risk as as 80% of sales stem from internal R&D ence. Perhaps its lack of traction in these recently launched spinal muscular atro- and 86% fall into the endocrinology area, areas is unsurprising given the enormous phy blockbuster Spinraza (nusinersen) mostly peptides and proteins. Its largest success of its core franchises (Clayton may not be sufficient to compensate a product is Ozempic (semaglutide), the Christensen’s innovators dilemma comes declining portfolio of multiple sclerosis leading GLP-1 agonist in an ever growing to mind). One of the key drivers of Novo blockbusters. Biogen’s difficulties are diabetes market ($25.9bn in value and Nordisk’s long-term success is its unique typical symptoms shared by many of $7.4bn in peak sales), the oral version of model and set-up as a public company the mid-sized outperformers of the last which has just been approved in the US that is fully controlled by a foundation. years that face huge challenges. Simply (Rybelsus) and is forecast to be another The Novo Foundation protects Novo Nor- put, it is difficult to maintain the creative mega-blockbuster ($14.5bn in value and disk from being acquired while ensuring culture and performance focus that made $5.6bn in peak sales). that its unique mixture of altruistic and these companies great as they go through The main strategic question for Novo business motives embedded in the “Novo periods of hyper-growth. Nordisk is whether they can keep up that Nordisk Way” are kept alive.

34 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: R&D Strategies ❚

Lilly Enters Top 10 culture as competitive advantages. cost of capital with the total net pres- Lilly Research Laboratories’s #3 spot • Establishing a clear competitive advan- ent value (eNPV) today of compounds in R&D Productivity comes as a real tage: building disease area strongholds marketed in the last five years and all surprise (last year #10) as its R&D or- and industry leading R&D capabili- pipeline products. ganization has kept a very low profile ties. Examples are Novo Nordisk in Using this data, two distinct rankings over the last few years. A closer look endocrinology and proteins or Gilead were calculated – a “Momentum” and a reveals that its strong performance is fu- in virology. “Long-Term” ranking. The Momentum eled by a successfully growing diabetes • Focus on high unmet need specialty ranking aims to capture the value a franchise, with GLP-1 agonist Trulicity indications: the market growth of on- company is forecasted to generate by (dulaglutide) leading the way; this as- cology as well as the rich scientific and taking the current eNPV of its entire set has seen a massive increase in value drug target landscape make it the in- pipeline and dividing by the firm’s R&D from 2018 to 2019, representing $23bn dustry’s most popular area. The role of and M&A costs, both adjusted for cost of in value and $6.7bn in projected peak oncology in AstraZeneca’s turnaround capital, as described above. By contrast, sales. Strengthening the GLP-1 franchise story is an illustration of this approach. the Long-Term ranking focuses on the is tirzepatide that was not included in Smaller bolt-on acquisitions: instead of value a company has already generated most analyst models last year but is major M&A, smaller bolt-on acquisi- in the recent past, specifically the eNPV expected to become a large product with tions complemented by licensing has of products marketed in the last five years $8.9bn in value. been the strategy of choice for most top are added to the pipeline eNPV whilst Lilly’s second largest product Taltz 10 companies, the notable exceptions those marketed six to eight years ago (ixekizumab), a psoriasis antibody, has being Novo Nordisk and Regeneron are also added but with the contribution also increased since last year to $2.5bn in that have completely relied on internal tailing off by 33% per year. This is then peak sales and $8.2bn in value. As Lilly R&D strength. divided by the total costs as per the Mo- is new to the top five, it will be interest- • Strong presence in US market: the US is mentum rank. ing to see how sustainable this much- responsible for a disproportionate part The overall R&D Productivity rank was improved performance is, in 2019 it has of the global biopharma profit pool. then generated by weighting the momen- already translated into a top 10 spot in In addition, hotbeds such as Boston tum rank ¼ vs. ¾ for the long-term rank. the Corporate Performance ranking (#9). ensure the US keeps a leading position To fairly allocate M&A costs to the The most exciting move the com- in the global biopharma innovation R&D costs, each deal was defined by its pany has done in a long time was the system in terms of talent and output. primary driver. If the acquired firm had acquisition of Loxo Oncology for $8bn, • Effective portfolio decision-making: pharma sales >€1 bn then was said to be even though the lead product Vitrakvi the much-cited truth seeking versus commercial and thus 25% of the deal total (larotrectinib) was already licensed to progression seeking behaviour is at deal value was added to the R&D costs Bayer. Lilly will get royalties and an in- the root of effective portfolio gover- for that year. By contrast a deal involv- teresting pipeline of targeted therapies nance that was a main factor in the ing a firm with no marketed products in oncology such as a next generation turnaround of AstraZeneca. This is is, by definition, a pipeline driven deal, BTK inhibitor. The acquisition is a first one of the most underutilized and cost- thus 80% of the deal costs were taken. In step towards an increasing focus on effective levers that exists. addition, if the total cumulative sales of oncology, a theme seen with the other The examples of R&D productivity the target company up until the deal date major turnaround story in this year’s champions create hope for those compa- were <20% of the deal value then these ranking, AstraZeneca. nies that find themselves at the bottom of were also considered to be a pipeline the ranking. The AstraZeneca case study driven deal (e.g. AbbVie Inc.’s acquisition What Really Matters? demonstrates that R&D productivity of Pharmacyclics). Finally, if a firm had In spite of industry-wide problems with is not just based on luck but on strong pharma sales <€1bn then it is considered R&D productivity, Catenion’s annual leadership. This emphasizes the impor- a hybrid of the two deals and thus 50% of survey has demonstrated over the years tance of people, culture and model as the M&A cost were used. that it is possible to outperform and to the foundations of competitive strategy. create substantial value for patients and Corporate Growth Ranking shareholders. So what are the common Methodology: To evaluate the corporate performance of denominators among the top ranked R&D Productivity Ranking each firm, the historical and forecasted companies? Catenion has identified a few In order to evaluate the R&D produc- CAGR for pharmaceutical sales, EBITDA elements that contribute to sustainable tivity of the world’s 30 largest public and market cap (historical only) was R&D outperformance that translate into pharmaceutical companies, as judged by calculated. Each company was ranked superior growth and profitability: total pharmaceutical sales, the Catenion independently on each of the five metrics • A science-driven innovation culture and methodology takes an approach that before they were combined with equal model: a prime example is Regeneron focuses on value. It compared the total weighting to generate the overall corpo- whose model resembles the Genentech R&D spending from 2009-2018 including rate growth ranking. of the 90s with its focus on people and costs from M&A (see Exhibit 2) and a 7% IV124414

In the latest instalment of our VC playbook series, In Vivo sits down with Roel Bulthuis, managing partner at INKEF Capital, to discuss the group’s approach to health care investing in Europe, the importance of funding a team not just a project and how life sciences venture capital is evolving with the emergence of health tech.

BY LUCIE ELLIS ounded in 2010 by ABP/APG, INKEF Capital currently invests out of a €500m ($549m) fund. Co-managing partner Roel Bulthuis, who has more than 15 Roel Bulthuis, who previously years’ experience across venture capital, pharma business development and established Merck Serono’s corporate investment banking, joined the company in January 2019. Prior to joining venture fund M Ventures, talks to INKEF he was a senior vice president and managing director of M-Ventures, In Vivo about what he seeks in a new investment opportunity for INKEF Capital Fwhich he created and developed into a leading corporate VC fund. and why VC funds need to keep up to In an exclusive interview with In Vivo, Bulthuis discusses INKEF’s strategy, his valu- date with the interests of emerging ation methodology and red flag warnings that make him avoid a project. entrepreneurs. In Vivo: What is INKEF Capital and what is your investment motto? Bulthuis joined INKEF in 2019, and his Roel Bulthuis: INKEF is an Amsterdam based European VC focused on health care focus on building teams and fostering and tech. I am one of two managing partners and I run the health care side of the firm. talent aligns with the firm’s goal of My colleague Robert Jan Galema runs tech investments. Across the board, we want to backing “mission-driven entrepreneurs be an investor that helps entrepreneurs build companies. That could sound simplis- who are ready to take the next step to tic, but a lot of the venture community has a shorter-term vision and are focused on grow their business.” a relatively quicker investment cycle. However, INKEF runs a long-term fund, we have a 20-year fund cycle and we commit significant amounts to our portfolio companies. INKEF is focused on early-stage We start our investments early; we prefer to get in at the seed or series A round and investments, where it is unlikely there from there we want to stick with our companies long term. We typically reserve €15m will be a fully built team. He seeks to €30m over the life cycle of a company, but we can go beyond that. It is great when individuals who are committed to the there is an early interest from potential buyers, and that may make sense in some work, know their value and understand cases, but we want to be in the position to support our companies and enable them to the need to expand on that. grow into European leaders.

36 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: VC PLAYBOOK ❚

How is INKEF’s approach different as a bit of a strange animal – there was from that of its peers? not the perception that these were funds The way we see our firm, we are a that could add value to asset develop- bit of a different animal in terms of our ment. We showed them with those heritage. We inherited a commitment projects that bringing in VCs helped to impact investing from the pension raise the development quality of those fund that started INKEF and we still assets. I used those experiences to make have that fund as our LP. That pension a proposal to the board of Merck to start fund came into this wanting to create a a corporate venture fund. strong environment for entrepreneurs. My entry into venture was through We don’t think we should be bound by convincing the corporate board of a very the conventions that exist in the venture conservative German company that they community. We have a different take on should do venture capital – which they fund cycle, management and on how we did, reluctantly. For the last 10 years my incentivize our investors. work in venture capital has been build- The performance for European VC ing up a corporate venture fund, initially funds has not been overwhelming to in therapeutics but also in other sectors suggest the current short-term model is in life sciences technologies, in new working. Fund managers, and we are materials, etc. INKEF was the transition seeing this in the corporate VC space, “I would invest in a from running a corporate venture fund are starting to look at our type of model. that became a quite large organization great team with – when I left we were 35 people with four How did you personally enter the VC funds, invested in more than 60 compa- field? a science project nies – to a group where I would have my I originally wanted to become a scien- hands free. Somewhere I could play a tist but failed miserably. I did a master’s that needs work, significant role in defining where we go degree in pharmaceutical sciences and with our investments, with our strategy started research in molecular biology – but I would never and with our vision of how we want to but it wasn’t for me. Then I got a job as work with entrepreneurs. a junior business developer in a biotech invest in an company and did that for just under a What are some of the skills from your year before being recruited to join a bank, absolutely fantastic BD or CVC roles that you still find where I was a health care investment yourself going back to? banker for five years. I did a lot in capital science project For me, the most important theme markets but also M&A work in the health when we invest in companies is “How can care sector in Europe and the US. with a mediocre I help you translate this unique science I quit banking just before the financial into a drug that is going to have an impact crisis and did my MBA before joining Se- team around it.” for a patient in such a way that a physi- rono, that was about 12 years ago now. I cian will prescribe it and an insurance worked on M&A for Serono and then the company will pay for it?” It may sound company was acquired by Merck KGaA. For Roel Bulthuis trivial, but the emphasis has to be on the next two years I ran part of their busi- making something commercially relevant ness development group, the structured and doing it in such a way that you can deals group. Part of my mandate in BD was resource it in a biotech environment. to find solutions for deprioritized assets. In a pharma setting you often have a I had a whole portfolio of molecules big portfolio of assets going into clinical that were deprioritized for strategic rea- trials, whereas in a biotech setting you sons – these were good pharma grade often have one or two shots on goal. We’re assets that were looking for a new en- less focused on later stage development, vironment. Rather than out-licensing a partner could do that, but the earlier- those programs, I found a way to finance stage clinical development, the Phase I/ them externally, in some cases by merg- II trials – I can only finance those if I get ing them with existing venture-backed relevant data along the way. businesses and in some cases creating To give you an example, if I’m going to new vehicles. invest in cell therapy, I find that hard as a Before this, the corporate board of VC as I will not see relevant data preclini- Merck looked at the venture community cally because animal models do not tell

me anything. I will have to make a huge Sometimes though, with first-time en- investment in manufacturing, and then do trepreneurs, people step up and surprise a Phase I trial – the only thing I will know you. VCs then must change their mind-set is that I am not killing any patients. Then – which we don’t do enough as a com- immediately I need to move to a combined munity – and realize this is someone who Phase II/III study. So, the first time that I “When you have that is going to take the role of a CEO and do see any validation for my hypothesis, I’ve it well. The impact of that is tremendous burned through $60m, $70m, $80m. because when you have that founder who founder who steps steps up to the role of CEO, it leads to a Do you have a tick list of “must-haves” very different dynamic and culture within to help evaluate an asset at the early up to the role of CEO, the team – you can build a stronger and stages? it leads to a very more committed organization. You build an The important thing for us is that, al- expectation with the people on that team though we spend a lot of time with people different dynamic that if the CEO and founder can grow and to develop their hypothesis, neither me get the support of the board, then there are nor my team (who are very smart) are other opportunities. I love those situations. smart enough to be able to immediately and culture within see the opportunity from a given piece Can you highlight an INKEF invest- of science. the team.” ment that stands out to you as a suc- So, ticking the box: I need a vision on cess story? what you are going to make and what Before my time, INKEF made a num- your product is going to be. I don’t want a ber of really smart investments. One data download, I don’t want the elevator example: the firm was convinced by an pitch that gives me so much information entrepreneur to invest in the field of hear- that I can’t handle it all. I want to get a ing loss many years ago, before everyone vision of what your product is. Another else started to jump into that field. This important point, we invest early stage, was working with a serial entrepreneur, where it is unlikely there will be a fully who had set up a virtual company with built team. But I want to see an indi- very few resources, and we invested and vidual, or a group of individuals, who are were the largest shareholder in that com- totally committed to the work, who know pany. It was a field that not many people what their value is and who understand were getting into at the time. that there is a need to expand on that. The preclinical models had relatively I want to see commitment, but I also little validation. With herd mentality, VCs want to see a realistic view. I want to tend to run after the same thing, and this be a value-added investor working with was contrary to anything that was happen- entrepreneurs who want to get value out ing in the market. It takes time to develop of me beyond the cash. If you’re looking an asset, but we’re close to seeing Phase for cash only, and you don’t consider the II clinical data on that program. This puts investor a relevant part of the equation us on par with some significantly funded to develop a company and develop a companies in the US right now, some of product, then I’m not the right investor. which have listed on Nasdaq with impres- I would invest in a great team with a sci- sive valuations. I think the good thing ence project that needs work, but I would for us is that we’re getting to a market never invest in a fantastic science project environment where this is actually a hot with a mediocre team around it. topic, there are a lot of investors that are looking at this right now, there are a lot What excites you when seeking new of pharma companies that are looking at investment opportunities? opportunities in hearing loss too. We invest in teams and we invest in science. The assumption is often – when How much of that is luck and how working with an academic with a great much of it is skill, to get ahead of the piece of science – that they are going game at the right time? to be fundamental for the future of the There is always a factor of luck. In this company but probably in a CSO-style instance, the bet was on us knowing this position. At some point, a new CEO needs entrepreneur; we like what he does, we to be brought in. like his way of looking at a company. The

38 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DEAL-MAKING: VC PLAYBOOK ❚

science was solid, the translation of the understand yet. In tech, there is a lot scientist. The output of that is significant. plan to something that could move on of focus on product marketing, that is a The younger generation, the post-docs was solid. There is a skill in selecting an softer approach. When we develop drugs, who come out of university right now, opportunity, and there’s a skill in making devices and technology for a health care have a different view on life. They realize decisions. setting, I need to understand the ap- that not everyone is going to be a Nobel One of the hard things to do in a ven- plication. Prize winner, that a career in academia ture environment is to make that judge- is only for a few and that becoming an ment call. What I tell my team is we are Assessing the current European en- entrepreneur is actually a very positive in the business of making decisions on vironment, how do you think it has aspiration. This generation does not feel the basis of too little information. Many changed in the last few years for health bad saying that they want to make a living of the projects that come to us have many care investing? out of science, they don’t feel bad saying years of work behind them, very commit- The environment has changed tremen- that they want to be millionaires, they ted entrepreneurs behind them. If we dously, mostly in a positive way. One want to be an Elon Musk. were to spend enough time with every very important point, across Europe, but I think this change drives a different opportunity to fully understand them, especially in a few locations such as the sort of entrepreneur in health care. then this would be a different issue. But UK, Benelux and the Nordics, there has if I get 2,000 to 3,000 business plans per been the emergence of some really strong Where would you like to see INKEF in year, I’m not going to be able to do that. seed-stage, early-stage investors. Inves- five years’ time? That’s an important skill in VC, to make tors that are fully focused on company I joined INKEF because I wanted to quick decisions while accepting that we creation. They add tremendous value to help build a leading European venture will be wrong from time to time. We often the sector. platform. I want us to be one of the tell entrepreneurs that we hope that they With some larger VCs, it is nice to see leaders in creating new health care and prove us wrong when we pass on an op- that they have stuck to mantras of mak- tech companies in Europe and to be part portunity. We have to make a judgement ing early-stage investments in a balanced of creating a stronger sector in Europe, call, we have to focus our attention on way. These are the firms that have – to a without preconceptions about how we the 30 to 40 companies that we can spend large extent – survived the crisis and are should do venture. We’re not stuck with enough time with on an annual basis, the ones that are now accelerating their the conventional model, we do what’s which then leads us on to the five to eight growth and raising bigger funds. best for the venture firm, and that’s al- investments that we make a year. There is one other change I find to be ways in the context of what’s best for our very important at the level of entrepre- portfolio companies. What are the red flags that could put neurship. In many European countries IV124444 you off an asset or opportunity? we still have a challenge. Our industry Additional reporting by William Masters I don’t like to get invited to a C or a D is fully focused on science and for new Comments: financing round because that often means ideas we rely heavily on the academic Email the author: [email protected] there is a problem to be solved with the community. I still feel that in many Eu- investors rather than an opportunity to ropean countries the older generation DID YOU MISS THESE? be developed in the company. There are of academics – and many of those in some investors that do that very well, but senior positions in academia today – READ MORE FEATURES IN THE it’s not our cup of tea. We like to be with frown upon the opportunity to become VC PLAYBOOK SERIES ONLINE: the company early on and have an impact. an entrepreneur. 4BIO: Taking Aim At Another concern is when a company Not everyone needs to be an entrepre- Advanced Therapies claims something is “new” and “unique” neur, but they don’t always see it – social 25 Nov 2019 without being able to explain why that is status wise – on a similar level to academ- Westlake Village BioPartners: How relevant in a commercial setting. We’re ic positions. This holds a lot of people Proximity Creates Partnerships not investing in academic projects; back from taking that step. We could 21 Oct 2019 we’re investing in companies. It needs significantly increase the creativity and to have an application. It is interesting drive if there was more cross-movement Cambridge Innovation Capital: that we see some tech investors coming between people who are academics and Making Focus A Strategic Advantage into the health care sectors. In tech you who are entrepreneurs. 14 Aug 2019 sometimes hear the argument that “Well In the US, I invested in a professor you may not believe this now, but if you who then started a company and did As China Looms, Sofinnova took that position when looking at Google that for five years before going back Partners Keeps The Faith In A early on you would have been wrong.” into academia. In Europe that reverse Resilient Europe That’s not a real argument. Yes, Google move would be unthinkable, though 6 Feb 2019 was very successful, but there were 30 the interesting thing is that he felt that https://bit.ly/39I7zDJ other companies at that time that were with his startup experience, he became trying to do something that we didn’t a much more creative and productive

❚ On the Move Recent executive appointments in the life sciences industry

❚ RAMZI BENAMAR ❚ JENNIFER CHIEN ❚ PETER GARCIA ❚ BERTIL LINDMARK

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Sandra E. Advantagene Inc Chief Operating Officer LogicBio Chief Operating 10-Jan-20 Poole Therapeutics Officer

Andreas Affimed Chief Medical Officer Molecular Chief Medical Officer 1-Mar-20 Harstick Therapeutics AG Partners AG

Pascal Juery Agfa-Gevaert NV Chief Executive Officer Carbios Director 1-Feb-20

Peter S. ALX Oncology Chief Financial Officer PDL BioPharma Chief Financial Officer 7-Jan-20 Garcia and Vice President

Peter N. Alzheon Inc Head, Commercial Tesaro Inc Senior Vice 7-Jan-20 Laivins Strategy and Planning President, Strategic Development Program

John Chin Antengene Corp Chief Business Officer Celgene China General Manager 6-Jan-20

Steve Hughes Arcturus Chief Development Officer Organovo Chief Medical Officer 8-Jan-20 Therapeutics Ltd

Ivor Macleod Athersys Inc Chief Financial Officer Eisai Inc Chief Financial Officer 31-Jan-20 and Chief Compliance Officer

Erick J. Lucera Aveo Oncology Chief Financial Officer Valeritas Inc Chief Financial Officer 6-Jan-20 and Executive Vice President

Ed Bardy Chief Operating Officer Varian Medical Vice President, Global 2-Jan-20 Vertatschitsch Diagnostics Inc Systems Portfolio Solutions

M. B. Biocon Biologics Chief Financial Officer Syngene President (Finance) 6-Jan-20 Chinappa India Ltd International Ltd and Chief Financial Officer

Robert Green Cambrex Corp Chief Financial Officer and General Electric Chief Financial Officer, 6-Jan-20 Executive Vice President Corp GE Power

Tom Wilton Carisma Chief Business Officer LogicBio Chief Business Officer 6-Jan-20 Therapeutics Inc Therapeutics

40 | In Vivo | February 2020 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

Take an interactive look at recent executive-level company changes and READ MORE promotions in the biopharma, medical device and diagnostics industries. ONLINE Visit: invivo.pharmaintelligence.informa.com

❚ DAVID MOFFAT ❚ PAULA BROWN STAFFORD ❚ LAURENCE TURKA ❚ TOM WILTON

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Ramzi DBV Chief Financial Officer Spark Vice President and 6-Jan-20 Benamar Technologies and Member of Executive Therapeutics Head, Financial Committee Planning and Analysis

Scott Holmes Disarm Chief Financial Officer Kiadis Pharma Chief Financial Officer 13-Jan-20 Therapeutics

Michelle Editas Medicine Chief Financial Officer Momenta Chief Financial Officer 9-Jan-20 Robertson Inc Pharmaceuticals Inc

David Meek FerGene Chief Executive Officer Ipsen Group Chief Executive Officer 14-Jan-20 and President

Enrique FibroGen Inc Chief Executive Officer Eli Lilly & Co President, Lilly USA 6-Jan-20 Conterno and Director

Ritesh Foundation Chief Commercial Officer Flatiron Health Vice President, 13-Jan-20 Khullar Medicine Inc Provider Solutions

Bertil Galecto Inc Chief Medical Officer eTheRNA Chief Medical Officer 3-Feb-20 Lindmark

Michael IFM Chief Scientific Officer Magenta Chief Scientific Officer 7-Jan-20 Cooke Therapeutics llc Therapeutics

Onaiza Ionis Chief Corporate Grail Biosciences Chief Commercial 9-Jan-20 Cadoret- Pharmaceuticals Development and Officer Manier Inc Commercial Officer

Jorgen B. Ivenix Inc Chief Executive Officer Cantel Medical Chief Executive Officer 13-Jan-20 Hansen Corp and President

Jennifer Krystal Biotech Chief Commercial Officer Sanofi Genzyme Vice President 20-Jan-20 Chien Inc and Head, Genetic Diseases, US Rare Disease

Istvan Molnar Lantheus Chief Medical Officer Fusion Chief Medical Officer 13-Jan-20 Medical Imaging Pharmaceuticals

February 2020 | In Vivo | 41 ❚ ON THE MOVE

COMPANY CHANGES EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Venkat Reddy Macrophage Chief Scientific Officer Glenmark Senior Vice President 9-Jan-20 Pharma Pharmaceuticals and Global Head, Ltd Translational Sciences

Diane M. Neural Analytics Chairman and Chief Google Cloud Chief Operating 9-Jan-20 Bryant Executive Officer Officer

Andrew Neuronetics Inc Chief Compliance Officer US Silica Senior Vice President, 21-Jan-20 Macan and Senior Vice President, Holdings Inc General Cousel and General Counsel and Corporate Secretary Corporate Secretary

Han Myint NexImmune Inc Chief Medical Officer Celgene Vice President, Global 8-Jan-20 Medical Affairs

John Trainer NexImmune Inc Chief Financial Officer MedImmune Vice President and 8-Jan-20 Head, Partnering and Strategy

Matthew K. NuVasive Inc Chief Financial Officer and Mallinckrodt plc President, Specialty 2-Jan-20 Harbaugh Executive Vice President Generics

Helge ProteoMediX AG Chief Executive Officer Epigenomics AG Director 1-Jan-20 Lubenow

Jason Hoitt Provention Bio Chief Commercial Officer Dova Chief Commercial 8-Jan-20 Inc Pharmaceuticals Officer

Peter Buhler Quotient Ltd Chief Financial Officer Zaluvida AG Group Chief Financial 5-Feb-20 Officer

Maged Relmada Chief Financial Officer AzurRx Executive Vice 10-Jan-20 Shenouda Therapeutics Inc Biopharma President, Corporate Development

Steve Revitope Chief Executive Officer Elstar Chief Executive Officer 8-Jan-20 Arkinstall Oncology Inc Therapeutics

Laurence Rubius Chief Scientific Officer Rheos Medicines Co-founder and Chief 21-Jan-20 Turka Therapeutics Inc Scientific Officer

Gaurav Vyaire Medical Chief Executive Officer KCI President and Chief 21-Jan-20 Agarwal Operating Officer

Keri P. Mattox Zimmer Biomet Chief Communications W2O Group Global Lead, 8-Jan-20 Holdings Inc Officer and Senior Vice Integrated Corporate President, Investor Communications Relations

PROMOTIONS EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE Jennifer Buell Agenus Inc Chief Operating Officer Chief Operating Officer 9-Jan-20 and President

Shawn P. Cavanagh Cambrex Corp Chief Operating Officer, Chief Operating Officer 6-Jan-20 President and Director and Executive Vice President

Stephan Haitz Cambrex Corp President, CDMO Sales Vice President, Sales and 6-Jan-20 and Marketing Business Development

Darin Johnson Exactech Inc Chief Executive Officer Senior Vice President, 6-Jan-20 and President Extremities

David Hale Guerbet Chief Executive Officer Chief Commercial Officer 1-Jan-20

42 | In Vivo | February 2020 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

PROMOTIONS EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE David Moffat Macrophage Pharma Chief Technology Officer Director, Chemistry 9-Jan-20

Thomas Hoover Millendo Therapeutics Inc Chief Commercial Officer Senior Vice President, 9-Jan-20 Commercial Strategy

Paula Brown Stafford Novan Chief Executive Officer President and Chief 2-Feb-20 Operating Officer

Marsha Smith Siemens Chief Financial Officer, Chief Financial Officer, 1-Jan-20 Siemens Mobility North Siemens Mobility North America and Siemens USA America

Patrick Weiss Twist Bioscience Chief Operating Officer Senior Vice President, 13-Jan-20 Research and Development and General Manager, Data Storage

DIRECTORS EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE Vincent Milano Aclaris Therapeutics Inc Director 7-Jan-20

George Golumbeski Aura Biosciences Inc Chairman 7-Jan-20

Jean-Luc Boulnois BioDirection Inc Director 7-Jan-20

Jeryl Hilleman Cardiva Medical Inc Director 10-Jan-20

Heinz Jacqui Distalmotion SA Director 14-Jan-20

Reinhard Mayer Distalmotion SA Director 14-Jan-20

Daniel Alberttis Exactus Inc Director 16-Jan-20

James A. Schoeneck FibroGen Inc Chairman 6-Jan-20

Scott Biller Foghorn Therapeutics Director 9-Jan-20

Yunshu Zhou Jiangsu Hengrui Medicine Co Ltd Chairman 17-Jan-20

Elizabeth O’Farrell PDL BioPharma Inc Chairman 1-Jan-20

Gayle Crowell Pliant Therapeutics Director 8-Jan-20

Russell H. Ellison Rockwell Medical Director 9-Jan-20

James P. Panek Sutro Biopharma Inc Director 8-Jan-20

ADVISORS

EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE Christian Grimm Casma Therapeutics Inc Scientific Advisory Board Member 13-Jan-20

Martin Kampmann Casma Therapeutics Inc Scientific Advisory Board Member 13-Jan-20

Yves Henrotin GeneQuine Biotherapeutics GmbH Advisory Board Member 13-Jan-20

James P. Allison Lava Therapeutics BV Advisory Board Member 8-Jan-20

Padmanee Sharma Lava Therapeutics BV Advisory Board Member 8-Jan-20

February 2020 | In Vivo | 43 ❚ DEAL-MAKING

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Deal-Making column is a ❚ Deal-Making survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then Covering deals made February 2020 categorized by type – Acquisition, Alliance, or Financing. Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts. For information about access please contact Customer Care at 888-670-8900 or [email protected]

❚ MEDICAL DEVICES AZ sells hypertension products to Chugai licenses dual RAF/MEK Atnahs Pharma inhibitor CH5126766 to Verastem MERGERS & ACQUISITIONS Kyorin Pharma gets Japanese rights to FINANCINGS Anika pays up to $100m for aTyr’s ATYR1923 Arthrosurface Axsome gets exclusive US rights to Public offering nets $79m for Anika buys Parcus Medical for up to reboxetine and esreboxetine from Pfizer Adaptimmune $95m Bayer partners with Evotec for Aligos gets $125m in series B RTI Surgical sells OEM biz to Montagu the third time, in polycystic ovary financing for $490m syndrome Apellis nets $332m through FOPO BeiGene gets Chinese license to two Applied Therapeutics nets $134.8m ALLIANCES EUSA drugs via FOPO Bayer receives US license to Dare’s BeiGene gets rights to Leap’s DKN01 in Aptinyx nets $33.6m through FOPO vaginal contraceptive ring Ovaprene Asia Pacific region Armata raises $25m via PIPE Sebacia acquires Sienna’s SNA001 Biogen, CAMP4 pen CNS deal Autolus nets $75m through laser light hair removal device Biogen pays up to $710m for Pfizer’s public offering CK1 inhibitor for CNS conditions FINANCINGS Black Diamond goes public via $187m Takeda and Charles River enter drug IPO SeaSpine Holdings nets $79.9m via FOPO discovery collaboration Blueprint Medicines nets $308.7m via SI-Bone nets $50.3m via FOPO Eagle to co-promote Tyme’s cancer public stock sale metabolism candidate in the US FOPO nets $61m for Concert ❚ PHARMACEUTICALS Pfizer gets worldwide rights to Pharmaceuticals eFFECTOR’s cancer candidates MERGERS & ACQUISITIONS Global offering nets $144.5m forDBV Empirico to use Precision Insights Technologies Lilly buys Dermira for $1.1bn Platform to identify antisense targets Denali nets $169.2m through FOPO for Ionis Neuraxpharm buys Austrian OTC/ Hutchison China MediTech nets generics firmeasypharm Ocumension gets rights to EyePoint’s $103.4m through public offering Dexycu in Greater China I-Mab goes public, nets $96.4m ALLIANCES Kyverna pens option agreement FOPO nets $98m for Immunogen Almirall gains worldwide license to with Gilead 23andMe’s bispecific mAb Incyte pays big for rights to Infinity enters into $20m royalty sale agreement with BVF Allergan divests two exocrine MorphoSys’s tafasitamab pancreatic insufficiency products to Novartis grants Iovance license to Leap closes $27m private placement Nestle its IL-2 analog to develop as cancer Matinas nets $47m via FOPO Almirall collaborates with, gains immunotherapy Public offering nets $324.3m forMirati option to acquire Bioniz outright J&J gets option to kinase inhibitors Public offering nets $45m forMirum Almirall uses WuXi’s WuXiBody to from Pulmatrix Novome brings in $33m via series A discover multiple bispecific antibodies Mereo grants Oncologie exclusive for skin diseases rights to Phase I ovarian cancer project Onconova closes another PIPE; nets $9.3m Amunix licenses XTEN technology Roche Merck pens KRAS inhibitor Ocuphire gets rights to Apexian’s development deal with Astex and Taiho Osmotica nets $28m through FOPO APX3330 for ophthalmic indications Regenerative Medicine of China signs Trillium Therapeutics nets $110m Apollomics, GlycoMimetics co-develop 30-yr. deal to sell Zhittya’s biologics in through public offering of common and blood cancer therapies China territories preferred shares Ionis uses Aro’s Centyrin platform to Regenerative Medicine of Latin Xenon nets $56.4m through FOPO develop antisense oligonucleotides in America signs 30-yr. deal to sell Zymeworks nets $301.6m through $1.4bn collaboration Zhittya’s biologics in Latin America public offering

44 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - - - - ❚

| 45 DEAL-MAKING has rights in Europe in Europe rights has In Vivo | In Vivo 2020 February Almirall PHARMACEUTICALS MERGERS & ACQUISITIONS & MERGERS FINANCINGS ELI LILLY & CO. & LILLY ELI INC. DERMIRA SEASPINE HOLDINGS CORP. HOLDINGS SEASPINE INC. SI-BONE under a deal signed in February 2019. 2019. February in signed deal a under from the candidate licensed (Dermira royalties and milestones in 2017; Roche In- apply.) still arrangement that under rates engineered silver photoparticles to to photoparticles silver engineered rates the light convert and light laser absorb applied then is which heat, into energy 2019, In September area. a targeted to application 510(k) a submitted Sienna removal hair in the light SNA001 for is launch a commercial and indication is SNA001 year. this early anticipated The in acne. trials pivotal undergoing also patent ongoing all resolves deal current Massa and Sienna between litigation owns , which Hospital General chusetts Sebacia. by licensed patents certain Mi own Sebacia’s complements SNA001 microparticle/laser , a gold croparticles produc oil reduces that system energy prevent to glands tion in the sebaceous its of The divestiture acne. treat and (which Sienna enables device aesthetics to SNA001) offload to looking been had - dermatol Design by Topical on its focus ogy drug pipeline. ❚ agreed to pay $18.75 per per $18.75 pay to agreed & Co. Eli Lilly to $1.1bn or premium) 21% (a share company dermatology public acquire (Jan.) Inc. Dermira - immunol its expand Lilly helps deal The with the addi- particularly ogy offerings, antibody monoclonal Dermira’s tion of in Phase inhibitor an IL-13 lebrikizumab, atopic moderate-to-severe for III trials dermatitis. (medical devices devices (medical Corp. Holdings SeaSpine a in $79.9m netted disorders) spinal for million 6.8 of offering public follow-on (Jan.) $12.50. at shares common LLC; BTIG Banks/Advisors: Investment - Thal Ladenburg Inc.; Genuity Canaccord Inc. Banks SunTrust Inc.; & Co. mann musculoskeletal for (devices Inc. SI-Bone net anatomy) the sacropelvic of disorders public a follow-on through $50.3m ted at shares common million 2.49 of offering the of some use will The company $21.50. its of expansion commercial for proceeds joint sacroiliac treating for system iFuse another sold Stockholders dysfunction. (Jan.) shares. 1.81 million Amer of Bank Banks/Advisors: Investment Inc.; Genuity Canaccord Lynch; Merrill ica & Co. Stanley Morgan LLC; JMP Securities

- - - under a under Ovaprene . It has been a year year a been has It . from the market for for the market from Yaz is a non-hormonal a non-hormonal is Ovaprene ALLIANCES BAYER AG BAYER INC. BIOSCIENCE DARE SEBACIA INC. SEBACIA INC. BIOPHARMACEUTICALS SIENNA licensed Bayer AG licensed Inc. Bioscience Dare US rights to its investigational vaginal vaginal investigational its to rights US . (Jan.) ring Ovaprene silicone and payment up-front an made Bayer marketing and clinical with Dare provides remaining of in charge is Dare expertise. the completion including development, effectiveness contraceptive pivotal the of the second for (planned trial safety and approval. gaining and 2020), of half effective, the license make to In order Dare $20m (which Dare pay to has Bayer once costs) development toward put will then and completed, is trial the pivotal the commercialize will Pharma Big the $310m in another over handing device, tiered double-digit plus milestones sales royalties. a month’s provides ring that contraceptive a of the use through long contraception partial a creates that mesh permeable canal. the cervical from sperm for barrier acting the locally releases The ring also and acid ascorbic agents spermiostatic ex holds which Dare, gluconate. ferrous to rights global clusive , expects ADVA-Tec with agreement 2017 exemption device an investigational file to Bayer’s is This 2020. of half in the first of deal health-focused women’s second the signed it before A week date. to 2019 with up teamed Bayer Dare, with alliance - can develop time) to the third (for Evotec in poly targets multiple against didates The Big Pharma syndrome. ovary cystic health women’s a strong has already device intrauterine the by portfolio, led an- and product, , a billion-dollar Mirena contraceptive other - Biopharma Sienna acquired Inc. Sebacia silver a topical SNA001, ’s Inc. ceuticals the reduction for therapy photoparticle related all and hair, light-pigmented of (Jan.)assets. Photopar Topical Sienna’s uses SNA001 - incorpo which platform, Therapy ticle since Bayer withdrew its permanent birth permanent its withdrew Bayer since Essure device control due sales low including reasons, business events. adverse to pure play spine on focus pure play company and will 2019, year-end For innovation. and growth $118.5m. generated business spine RTI’s and biologics, in tissue, expertise its With - sup continue will the OEM biz hardware, product contracted certain with porting RTI During manufacturing. and development anticipates RTI years, two the next of each The products. new ten least at launching in $189m about generated OEM business 2019. for revenues

- - - screw-in screw-in V-LoX suture-based anchors, suture-based for $35m up front front $35m up for Medical Parcus Draw Tight Draw button fixation system, SLiK system, fixation AcTiFlip button MEDICAL DEVICES MEDICAL MERGERS & ACQUISITIONS & MERGERS ANIKA THERAPEUTICS THERAPEUTICS ANIKA INC. LLC MEDICAL PARCUS ANIKA THERAPEUTICS THERAPEUTICS INC. ANIKA INC. ARTHROSURFACE RTI SURGICAL SURGICAL INC. RTI ❚ Expanding its offerings in the fast-growing fast-growing in the offerings its Expanding Anika market, center surgical ambulatory $35m in cash paying is Inc. Therapeutics . LLC Medical Parcus acquire to front up in $60m another out shell could Anika (Jan.) earn-outs. commercial-based variety a offers Parcus in 2007, Founded procedures in surgical use for products of distal and knee, hip, the shoulder, of poly portfolio of Parcus’ extremities. is acquiring acquiring is Inc. Therapeutics Anika - Arthro orthopedic company held closely and front up $60m in cash for Inc. surface commercial and in regulatory $40m to up (Jan.) milestones. port a has Arthrosurface 2002, in Founded curvatures implant surface 150 over of folio and injury, trauma, as conditions--such for lower and the upper arthritic disease--of hip, knee, shoulder, including extremities HemiCAP Its implants toe. and wrist, ankle, total to alternative invasive minimally a are patients enable and replacement joint with motion of range increased have to products Arthorsurface’s pain. reduced than more portfolioof the Anika join will and preservation joint for 20 products based are which medicine regenerative Anika platform. acid hyaluronic on Anika’s sports medicine acquired concurrently company earn-outs. $60m in potential to up and Leerink SVB Banks/Advisors: Investment Inc.) Therapeutics (Anika products (PEEK)- based etheretherketone includes the knotless screw-in anchors and fix screw-in screw-in fix and anchors screw-in knotless the and system, tenodesis firm equity private to ing (OEM) business (Jan.) in cash. $490m for Montagu repay to sale the from proceeds use will RTI portfolio. spine global in its invest and debt a becomes RTI the divestiture, Following (implants) (implants) Inc. Holdings Surgical RTI manufactur equipment original its sold suture anchors. Parcus Medical estimated estimated Medical Parcus anchors. suture was which be $12-13m, to revenues 2019 the with Concurrent 2018. than 15% more and $60m in cash paid Anika acquisition, and in regulatory $40m to up pay could ortho - private for milestones commercial Both Inc. Arthrosurface company pedic its expand to Anika allow transactions preservation joint for products of offerings - Banks/Advi Investment restoration. and Inc.) Therapeutics (Anika Leerink SVB sors: company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

jectable lebrikizumab is complementary ALLIANCES for autoimmune diseases). Following the to Lilly’s Phase III Olumiant (baracitinib), availability of Phase I/II trial results of an oral JAK 1/2 inhibitor for AD. The ability 23ANDME INC. BNZ1 in CTCL and dependent on other de- to offer patients both an oral and inject- ALMIRALL SA fined regulatory conditions, Almirall may able AD therapy is an attractive option as Almirall SA licensed exclusive develop- exercise its option to buy Bioniz, paying Lilly faces competition in the AD space ment and commercialization rights to an exercise fee of $47m, plus additional from Sanofi/Regeneron’s twice-monthly 23andMe Inc.’s bispecific monoclonal milestones and royalties. As part of the injection Dupixent (dupilumab). The deal antibody (mAb) that blocks all three iso- agreement if the option is exercised, also gives Lilly access to Dermira’s mar- forms of IL-36 cytokine. (Jan.) Almirall will also start a research collabo- keted medicated cloth Qbrexa (glycopyr- Although a specific candidate wasn’t dis- ration to expand its early-stage pipeline. ronium) for excessive underarm sweating closed, IL-36 belongs to the IL-1 cytokine Almirall will form a new company (that will (primary axillary hyperhidrosis). The family, which is associated with various retain Bioniz’s technology platform), with acquisition will take place via tender inflammatory diseases, including some which it will collaborate to discover other offer, which has been unanimously ap- dermatological conditions. With its data- multi-cytokine inhibitors for dermatology proved by Dermira’s BOD. Bay City Capital base containing genotypic information, indications, with a goal of delivering at and New Enterprise Associates, which along with billions of phenotypic data least three IND-approved candidates. The together own 13% of the company, have points, 23andMe identifies targets from newco will be eligible for development and also entered into a Tender and Support which it generates lead compounds and regulatory milestones upon IND submis- Agreement. The transaction is expected then conducts preclinical research to sup- sion. This deal is concurrent with Almirall’s to close by the end of Q1 2020. Invest- port further development. Almirall plans announcement of dermatology partner- ment Banks/Advisors: Evercore Partners to progress this 23andMe preclinical IL-36 ships with both WuXi and 23andme. (Eli Lilly & Co.); Citigroup Inc.; SVB Leer- inhibiting mAb through clinical trials and ALMIRALL SA ink (Dermira Inc.) commercialization. This deal, along with WUXI PHARMATECH INC. concurrent dermatology partnerships NEURAXPHARM ARZNEIMITTEL GMBH WuXi AppTec Inc. with both Bioniz and WuXi, further boosts WuXi Biologics EASYPHARM OTC GMBH Almirall’s early-stage pipeline programs. CNS-focused spec pharma neuraxpharm Almirall SA and WuXi Biologics agreed to Arzneimittel GmbH agreed to acquire pri- ALLERGAN PLC collaborate on the discovery of multiple vately held Austrian consumer healthcare NESTLE SA bispecific antibodies that target derma- tologic diseases using WuXi’s WuXiBody company easypharm OTC GmbH, which To satisfy regulators ahead of its acquisi- platform. (Jan.) will be launched as Neuraxpharm Austria, tion by AbbVie, Allergan PLC is selling and retain easypharm’s existing manage- Nestle SA its FDA-approved Zenpep (pan- The WuXiBody engineering platform en- ment. (Jan.) crelipase) delayed-release capsules. (Jan.) ables the assembly of almost any monoclonal antibody (mAb) sequence pair into Easypharm’s CNS OTC brands include Zenpep is indicated for treating exocrine a bispecific construct with a structural easysleep (melatonin, valerian, and hop) pancreatic insufficiency due to cystic fi- flexibility that enables the building of aid for insomnia (available as a tablet, brosis and other conditions. In 2018, the various formats with different combina- a tea, and a sleep-spray formulation) to drug generated $237.7m in sales. Nestle tions of valencies (multiple binding sites). shorten falling asleep time and contribute is also acquiring Viokace, an uncoated Under the deal, Almirall will gain access to to healthy sleep and easyrelax (passion immediate- release drug, also for exocrine WuXi’s antibody technologies, including flower, valerian, lemon balm, lavender, pancreatic insufficiency. Concurrently, Al- WuXiBody, paying WuXi an up-front fee and saffron), a dietary supplement to lergan is divesting to its AstraZeneca its IL- and potentially providing development, reduce stress, nervous tension, and 23 inhibitor brazikumab, which is in Phase regulatory, and commercialization mile- restlessness. These products will boost IIb/III trials for Crohn’s disease and Phase stones and royalties on global sales for neuraxpharm’s existing CNS consumer II for ulcerative colitis. Financial terms of each resulting bispecific antibody project healthcare franchise of nutraceuticals. both agreements were not disclosed. generated under the agreement. Almirall’s Easypharm also has a portfolio of neurol- aim is to discover multiple bispecific ogy/psychiatry prescription generics- ALMIRALL SA BIONIZ THERAPEUTICS INC. antibodies for skin diseases, including -including aripiprazole, levetiracetam, atopic dermatitis, to which it will have and memantine, olanzapine, quetiapine, ris- Almirall SA Bioniz Therapeutics Inc. development rights. Almirall concurrently peridone, and venlafaxine--distributed in entered a collaboration and option agree- announced dermatology partnerships ment in which Almirall paid $15m for the Austria by partner Aristo Pharma. In addi- with both Bioniz and 23andMe. tion, easypharm offers respiratory, cough, option to acquire Bioniz outright. (Jan.) sore throat and pharyngitis, and cold sore Through its multi-cytokine inhibitor tech- AMUNIX PHARMACEUTICALS INC. OTC products as well as the ERAPROTECT nology platform, Bioniz has developed ROCHE medical device pen for UV radiation pro- peptides that selectively inhibit function- In their second collaboration in as many years, tection to prevent cold sores. Easypharm’s ally redundant cytokines, with a present Roche received a license to Amunix Pharma- local sales force and distributor resources focus on the IL-2 cytokine family, to treat ceuticals Inc.’s XTEN technology. (Jan.) will facilitate the commercialization in immuno-inflammatory diseases and T cell Roche’s Genentech Inc. teamed up with Austria of neuraxpharm’s own probiotic malignancies. Bioniz’s pipeline includes Amunix in 2017 to discover and develop product NeuraxBiotic Spectrum (Lactoba- BNZ1 (an IL-2, IL-9, and IL-15 inhibitor in drugs in undisclosed therapy areas. Under cillus plantarum PS128), a psychobiotic Phase I/II for cutaneous T cell lymphoma the new partnership, Roche has rights to that modulates the gut-brain-axis, first (CTCL), Phase I for alopecia areata, and use XTEN to discover and develop candi- launched in the UK last year. Neuraxpharm preclinical for other T cell leukemias/ dates in non-oncology indications against has over the past four years expanded with lymphomas); BNZ2 (an IL-15 and IL-21 certain unknown targets. Amunix receives acquisitions across Europe; the current inhibitor in preclinical development for $40m up front, up to $1.5bn in develop- deal marks its twelfth European country, celiac disease and inflammatory bowel ment and sales milestones, and royalties. further extending the company’s Central disease); and BNZ3 (also an IL-15 and XTEN creates protein polymers that are re- European reach. IL-21 inhibitor in preclinical development combinantly fused to therapeutic products

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JN2581 Generics Bulletin Login Print Advert US Letter.indd 1 2019/09/27 12:27 ❚ DEAL-MAKING

(such as T-cell engagers, cytokines, and tor, an epidermal growth factor receptor years. The deal includes the beta blockers checkpoint inhibitors); the fused entity- inhibitor, and a multi-kinase inhibitor) and Inderal (propranolol), Tenormin (atenolol), -called an XTENylated drug--as a result three monoclonal antibodies (anti-PD-1, and Tenoretic (atenolol/chlorthalidone has increased half-life and decreased anti-PD-L1, and cytotoxic T-lymphocyte- fixed-dose combination), which are all immunogenicity. The most advanced associated protein 4). indicated for angina, hypertension, and XTEN molecule in the pipeline currently is arrythmias, as well as the ACE inhibitors Sanofi’s BIVV001, an engineered Factor ARO BIOTHERAPEUTICS CO. Zestril (lisinopril) and Zestoretic (hydro- VIII therapy for hemophilia A. Sanofi got IONIS PHARMACEUTICALS INC. chlorothiazide/lisinopril, fixed-dose the program through its 2018 acquisition Ionis Pharmaceuticals Inc. and Aro Bio- combination). (Zestril treats hyperten- of BioVerativ (Amunix originally licensed therapeutics Co. will collaborate on the sion, congestive heart failure, diabetic the therapy to Biogen in 2011). development of RNA-targeted therapeu- related conditions and hypertensive tic candidates, combining the former’s renal disease, while Zestoretic treats APEXIAN PHARMACEUTICALS INC. antisense oligonucleotides with Aro’s hypertension.) In the licensed territories, OCUPHIRE PHARMA INC. Centyrin protein drug platform. (Jan.) the five products brought in $132m in Apexian Pharmaceuticals Inc. granted A 2017 start-up established and backed sales in 2018. Atnahs’ business model Ocuphire Pharma Inc. an exclusive global in part by Johnson & Johnson Innovation is to acquire established branded drugs sublicense to APX3330 for all ophthalmic - JJDC Inc., Aro holds an exclusive world- from large and specialty pharmacos. The and diabetic indications. (Jan.) wide license from J&J to use the Centyrin company’s therapy areas of focus encom- APX3330 is an oral apurinic/apyrimidinic technology--which was discovered by pass women’s health and endocrinology, endonuclease 1/reduction-oxidation ef- Aro’s CSO Karyn O’Neil, PhD, and her neurology and pain, gastroenterology, fector factor-1 (APE1/Ref-1) inhibitor in team at Janssen Pharmaceutical Co.--to and oncology. preclinical studies for diabetic retinopathy develop, manufacture, and commercialize (DR) and diabetic macular edema (DME). protein therapeutics. Centyrins are small, ATYR PHARMA INC. Future indications for the compound may non-antibody protein scaffolds with the KYORIN PHARMACEUTICAL CO. LTD. include wet age-related macular degen- ability to simultaneously target multiple ATyr Pharma Inc. licensed Kyorin Phar- eration and retinal vascular occlusion. cell surface receptors to deliver complex maceutical Co. Ltd. exclusive rights to de- Apexian is also developing APX3330 for drug payloads in high concentration to velop and commercialize its lead program cancer. Based on the positive results of specific cell types and tissues, while low- ATYR1923 for interstitial lung diseases (ILDs) a recently completed Phase I oncology ering the toxicity in non-diseased organs. in Japan. (Jan.) trial (APX-CLN-0011) and ten other Phase Because of its structurally simple, ultra- In exchange for the rights, Kyorin will pay I and Phase II prior trials conducted by stable, and highly soluble properties that aTyr $8m up front, up to $167m in develop- Apexian, Ocuphire plans to commence can be expressed in various formats, this ment, regulatory, and sales milestones, plus a Phase II proof-of-concept trial (ZETA-1) platform is expected to facilitate the dis- royalties, as well as tiered royalties on net in non-proliferative DR and DME in 2020. covery of medicines with new mechanisms sales in Japan. Kyorin will fund all R&D and APX3330 will join Ocuphire’s ophthalmic of action. Using the Centyrin platform, commercialization activities, and aTyr will pipeline which is led by Nyxol, a Phase IIb Aro will be responsible for discovery. supply the therapeutic. ATYR1923 is a fusion eye drop for front-of-the-eye disorders, The partners will together collaborate to protein comprised of the immuno-modulato- including night vision disturbances, create for further development a defined ry domain of histidyl tRNA synthetase fused reversal of mydriasis, presbyopia, and number of lead Centyrin drug conjugates to the FC region of a human antibody. It is normal-tension glaucoma. APX3330 was (in a variety of diseases with high unmet a selective modulator of neuropilin-2 that licensed to Apexian from Eisai in 2008 and medical need) designed to achieve--via downregulates the innate and adaptive incorporates IP that Apexian licensed from systemic administration--tissue-specific, immune response in inflammatory disease Indiana University in 2017. therapeutically effective gene knockdown states. ATYR1923 is currently in Phase I/II in extra-hepatic tissues. Ionis will lead trials for pulmonary sarcoidosis. APOLLOMICS INC. development and will have worldwide GLYCOMIMETICS INC. exclusive commercialization rights for AXSOME THERAPEUTICS INC. Apollomics Inc. licensed exclusive rights each resulting drug conjugate. Aro and PFIZER INC. to co-develop and commercialize Glyco- Ionis will also collaborate on additional Pfizer Inc. licensed Axsome Therapeutics Mimetics Inc.’s blood cancer candidates discovery programs. In exchange, Aro gets exclusive US rights to nonclinical and uproleselan and GMI1687 in China, Hong an up-front cash payment, R&D funding, clinical data, and intellectual property Kong, Macau, and Taiwan. (Jan.) and up to $1.4bn in specific development surrounding the norepinephrine reuptake GlycoMimetics gets $9m up front, up to and commercial milestones, plus royalties inhibitor reboxetine--the active ingredient $180m in milestones, and tiered royalties. on net sales. Ionis has a diverse pipeline in Axsome’s narcolepsy candidate AXS12- Apollomics is responsible for all costs of antisense oligonucleotides across -and esreboxetine (renamed AXS14) for related to development and commercial- multiple therapeutic areas, with several fibromyalgia and other indications. (Jan.) ization of the E-selectin inhibitors in its programs set to enter pivotal studies this Axsome issued Pfizer $8m in stock and territories and will receive the candidates year. Aro is developing its own pipeline of paid $3m in cash up front. Pfizer is also from GlycoMimetics under a supply agree- Centyrins for oncology and immunology. eligible for up to $323m in regulatory and ment. IV-administered uproleselan is in sales milestones, plus tiered sales royal- Phase III for acute myelogenous leukemia, ASTRAZENECA PLC ties in the mid-single to low-double-digits and has received Breakthrough Therapy ATNAHS PHARMA (Strategic Transactions estimates 4-29%). designation from the FDA, while GMI1687 AstraZeneca PLC divested a portfolio of Pfizer gets a right of first negotiation on is in IND-enabling preclinical studies. non-core mature hypertension brands to any potential collaborations involving The latter is also indicated for AML but Atnahs Pharma, which paid $350m. The AXS12 or AXS14. In December 2019 Ax- is delivered via subcutaneous injection rights to Atnahs are global excluding the some announced positive results from with equivalent activity to uproleselan at a US and India (previously divested), and the Phase II CONCERT trial of AXS12. It 250-fold lower dose. Apollomics adds the Japan (where AZ will retain rights). (Jan.) plans to move the candidate into Phase projects to a pipeline that holds three tar- Atnahs could also hand over up to $40m III in 2020. AXS12 was granted orphan geted cancer candidates (a c-Met inhibi- in sales milestones during the next two drug designation in 2018 and has two

48 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - - - ❚

| 49 DEAL-MAKING Strategic Transac Strategic exclusive US rights rights US exclusive In Vivo | In Vivo 2020 February INTERNATIONAL INC. INTERNATIONAL CHARLES RIVER LABORATORIES LABORATORIES RIVER CHARLES LTD. CO. PHARMACEUTICAL TAKEDA BIOGEN INC. BIOGEN INC. PFIZER estimates 7-12%). PF05251749 had had PF05251749 7-12%). tions estimates - pro safety an acceptable demonstrated Phase in a proof-of-mechanism and file a commence to plans Biogen Ia trial. a treatment as in Q4 2020 Ib study Phase late-day as known (also sundowning of and disease Alzheimer’s in confusion) disorder rhythm wake sleep irregular Biogen disease. in Parkinson’s (ISWRD) improve to PF05251749 develop to seeks - sundown of disturbances behavioral rhythm, and circadian correcting ing by improve and symptoms ISWRD treat to be- quality, sleep wakefulness, daytime to According function. daily and havior, PF05251749 lists Pfizer Biomedtracker, pipeline in its project a discontinued as exit to a January 2018 decision following and discovery neuroscience their internal Concurrent efforts. development early Ax licensed Pfizer the agreement, with Therapeutics some - intel and data, clinical and nonclinical to reboxetine, surrounding property lectual in Axsome’s ingredient the active is which also AXS12. Axsome candidate narcolepsy esrebox to rights US exclusive received AXS14) fibromyalgia. for etine (renamed $334m. to be worth up could The deal Ltd. penned Co. Pharmaceutical Takeda - Laborato River Charles CRO with a deal preclinical of the discovery for Inc. ries of areas four Takeda’s across programs - path signaling of network and machinery across expression gene control that ways - collabora The body. human the in cell any en- be can that identify to targets tion seeks unhealthy or down up either dial to gaged cells, microglial within expression gene the of cells immune the primary are which an ideal is Biogen system. nervous central in developing expertise its partner with will Biogen conditions. CNS for therapies in addition to front CAMP4 $15m up pay optionthe gets Biogen funding. research up pay would and targets initial license to for milestones development in $96m to CAMP4 would royalties. sales plus each, target additional each for $173m to up get In addi- royalties. plus Biogen, by selected also may parties the cells, microglial to tion types. cell other CNS examine ’s Inc. Pfizer ca acquiring is Inc. Biogen PF05251749 inhibitor 1 (CK1) sein kinase - neuro and behavioral with patients for the of diseases across symptoms logical (Jan.) system. nervous central and front up $75m Pfizer paid Biogen in de- another $635m out shell could milestones, commercial and velopment in the high-single royalties tiered plus ( sub-teens to digits

- - (siltuximab) in China, China, in (siltuximab) for $115m in cash from from $115m in cash for is approved in over 40 coun 40 over in approved is an exclusive option to license de- license option to an exclusive BIOGEN INC. BIOGEN THERAPEUTICS CAMP4 BEIGENE LTD. BEIGENE THERAPEUTICS LEAP INC. BEIGENE LTD. BEIGENE PHARMA EUSA Biogen Inc. Biogen and CAMP4 Therapeutics develop and discover to up teaming are and neurodegenerative for therapies (Jan.) diseases. neurological Gene Circuitry its contribute CAMP4 will the transcriptional map can which Platform sive rights to develop and commercialize commercialize and develop to rights sive Sylvant the biologics BeiGene granted Inc. Therapeutics Leap Ltd. rights commercialization and velopment II anti-Dickkopf-1 DKN01, a Phase to Asia in cancer, gastric for antibody (DKK1) New and Australia, Japan), (excluding (Jan.) Zealand. receive will and front $3m up gets Leap its BeiGene exercises if money additional proof-of-concept initial following option to up for eligible also is Leap studies. and regulatory, in development, $132m tiered plus milestones, commercialization BeiGene has Additionally, royalties. sales in a a $5m investment make to agreed Leap’s. of placement private concurrent in the potential interested BeiGene is anti- own its DKN01 with of combination the During tislelizumab. PD-1 inhibitor studies conduct will option period, Leap in 40 combo on the DKN01/tislelizumab cancer/ gastric second-line with patients whose cancer junction gastroesophageal DKK1 in of high levels express tumors suggesting research to bolster an effort the combination with outcomes positive trials These PD-1 inhibitors. DKN01 and of 2020. of half the first during expected are exclu Ltd. BeiGene licensed Pharma EUSA Qa- and Taiwan, and Macau, Hong Kong, (Jan.) in China. beta) rziba (dinutuximab form $160m in the to up receive will EUSA and regulatory and payment an up-front of eligible also is It milestones. commercial BeiGene will royalties. sales tiered for development, clinical perform all and fund activities. commercial and regulatory, Sylvant Qa- 2018. in July Ireland Sciences Janssen targeted EMA-approved the only rziba is high-risk treating for immunotherapy solid common the most neuroblastoma, originates which children affecting tumor been have Both drugs the brain. of outside in China. approval track fast for submitted & Jefferies Banks/Advisors: Investment Pharma) (EUSA Inc. Co. tries for treating idiopathic multicentric multicentric idiopathic treating for tries orphan an is which disease, Castleman’s and nodes the lymph affecting condition worldwide acquired EUSA tissues. related Sylvant to rights - - - - Evotec Evotec and ’s elagolix, a luteinizing a luteinizing elagolix, ’s database. Bayer Bayer database. Atlas Reproductive to produce preclinical preclinical produce to Inc. Celmatix ’s fezolinetant, a neurokinin 3 a neurokinin fezolinetant, ’s Ogeda are collaborating, this time in a five- this collaborating, are BAYER AG BAYER INC. CELMATIX EVOTEC SE patents pending in the US. Pfizer currently currently Pfizer US. the in pending patents the outside Edronax as reboxetine markets a more Esreboxetine, depression. for US rebox of version potent and selective preclinical conduct jointly will Evotec and takes the Big Pharma which after studies, commer and development clinical over For the third time, Bayer third the AG For etine, demonstrated efficacy in previous previous in efficacy etine, demonstrated trials. III fibromyalgia Phase II and Phase had Pfizer Biomedtracker, to According esreboxetine of development suspended it considered they because 2009 in early provide would compound the that unlikely the beyond patients to benefit meaningful with Concurrent care. of standard current its Inc. Biogen sold the agreement, Pfizer PF05251749 inhibitor 1 (CK1) kinase casein diseases. Parkinson’s and Alzheimer’s for $710m. to be worth up could deal That SE develop to agreement multi-target year, syndrome ovary polycystic for candidates (Jan.) (PCOS). up in 2012 teamed first The companies in endometriosis; deal a multi-target for in many resulted has agreement that II. I and Phase into advancing molecules in the area again partnered In 2016 they chronic including diseases, kidney of In the cur in diabetes. disease kidney each will Evotec and Bayer alliance, rent high-quality and drug targets provide - contribu Evotec’s platforms. technology identified targets include also will tions in Oc established partnership its through 2019) in December (expanded 2019 tober with conditions health in women’s programs multi- proprietary Celmatix’s on based omics front up €6.5m for in exchange cialization, five over €10m in R&D funding and ($7.2m) Celmatix with this share will (Evotec years identification target novel for in return also will Bayer work). prioritization and in €330m over Celmatix and Evotec pay milestones, sales and clinical, preclinical, royalties. sales double-digit low to up plus 2012 Evotec’s and Bayer (In comparison, in worth $761m was deal endometriosis one kidney the while value, potential total older of a handful are There $351m.) was PCOS, for used are that drugs hormonal underdiagnosed often is disease the but ap- specifically no products are there and there Presently the condition. for proved - in the pipe candidates PCOS six only are the Evotec/Bayer are which of line (two The most assets). Evotec/Celmatix and AbbVie advanced-- antagonist, hormone releasing hormone and II trials. in Phase antagonist--are receptor company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

focus--oncology, gastroenterology, neu- EFFECTOR THERAPEUTICS INC. EYEPOINT PHARMACEUTICALS INC. roscience, and rare diseases. (Jan.) PFIZER INC. OCUMENSION THERAPEUTICS Throughout the deal, Charles River will Pfizer Inc. licensed excusive global rights EyePoint Pharmaceuticals Inc. licensed use its end-to-end integrated drug dis- to eFFECTOR Therapeutics Inc.’s small- Ocumension Therapeutics exclusive rights covery platform to identify new potential molecule inhibitors of eukaryotic initiation to develop and commercialize the oph- candidates and bring them into preclinical factor 4E (eIF4E). (Jan.) thalmic product Dexycu (dexamethasone) intraocular suspension 9% in China, Hong development. Takeda retains options to Pfizer will pay $15m up front plus up Kong, Macau, and Taiwan. (Jan.) license any projects it wishes to advance to another $492m in R&D funding and further. It made an undisclosed up-front development and sales milestones, plus EyePoint will receive $2m up front, up to payment and will hand over in excess sales royalties. EFFECTOR has an option $12m in predetermined development, of $50m per program in development regulatory, and commercial milestones, to co-promote in the US and would share milestones per compound, up to $120m plus sales royalties. Dexycu is indicated in profit and losses with Pfizer. The Big in sales milestones, and royalties on for treating post-operative inflammation Pharma will develop the eIF4E inhibitors projects that make it to the market. Takeda following ocular surgery. EyePoint already for various treatment-refractory cancers. is consistently working to enhance its sells Dexycu in the US and will exclusively pipeline and strengthen the company’s In the past, development of such small supply Ocumension with the product. offerings in core disease areas. The deal molecules has proven challenging be- Dexycu is a single-dose sustained release with Charles River was announced shortly cause of the nature of its binding site. therapy that provides long-lasting benefit after Takeda penned two other alliances; EMPIRICO INC. for up to 22 days. It will offer patients an alternative to a burdensome steroid in December, it entered into a potential IONIS PHARMACEUTICALS INC. $1bn agreement with Turnstone Biologics eye drop regimen, which has low patient Empirico Inc. signed a three-year deal to under which Takeda took exclusive global compliance due to its complex dosing identify targets for indications and tissues rights to Turnstone’s vaccinia virus-based schedule. In November 2018, EyePoint cancer immunotherapy RIVAL01 (and op- of interest to Ionis Pharmaceuticals Inc. licensed Ocumension exclusive rights to tions to license additional candidates), in its development of antisense thera- develop and commercialize its three-year and it also signed a deal with Cerevance peutics. (Jan.) posterior segment uveitis micro insert to discover and develop new treatments Ionis made a $10m up-front payment to (sold as Yutiq in the US) in China, Hong for CNS-based gastrointestinal disorders. Empirico in the form of an equity stake Kong, Macau, and Taiwan. That agreement (as part of Empirico’s concurrent/sepa- could be worth up to $11.75m. EAGLE PHARMACEUTICALS INC. rate $17m series A-2 round), and will be TYME TECHNOLOGIES INC. GILEAD SCIENCES INC. responsible for $30m in near-time opera- KYVERNA THERAPEUTICS Eagle Pharmaceuticals Inc. has agreed to tional and preclinical milestones, $620m co-promote in the US Tyme Technologies Cell therapy start-up Kyverna Therapeu- in clinical development, regulatory, and tics penned a deal with Gilead Sciences Inc.’s oral cancer candidate SM88 (racem- commercial milestones, plus sales royal- etyrosine) for advanced cancers. (Jan.) Inc. through which the companies will ties. Ionis may select up to 10 targets to develop engineered T-cell therapies for SM88 is a Cancer Metabolism-Based Ther- bring into preclinical and clinical stud- autoimmune diseases. (Jan.) apy (CBMT) in Phase II/III development by ies. Empirico has the option to license, Kyverna will use its synthetic Treg platform Tyme that has demonstrated complete or develop, and sell a therapy directed at a and the SynNotch synthetic gene expres- partial response in 15 different types of collaboration target, in exchange for mile- sion technology (belonging to Gilead’s solid and blood cancers including pancre- stone payments and royalties. In addition, Kite division) to conduct research and atic, prostate, sarcoma, breast, and lung. the partners plan to apply human genet- initial clinical studies through proof-of- Under terms of the ten-year agreement, ics evidence to existing Ionis candidates, concept. Gilead holds an option to license Tyme will be responsible for all develop- and will together perform target valida- rights to further develop and sell the ment, regulatory, commercial, market- tion, indication and biomarker selection, resulting projects. It paid Kyverna $17.5m ing, reimbursement, and manufacturing and patient stratification. Ionis’ current up front and committed to up to $570m in activities. It also reserves the right to re- pipeline spans multiple indications in development and sales milestones. Gilead purchase Eagle’s co-promotion rights for rare and more common conditions within also took part in Kyverna’s concurrent $200m. Eagle pays $20m up front via an the neurological, cardiometabolic, renal, $25m series A round. equity investment (10 million Tyme shares and oncology areas. Empirico, founded in at $2, a 65% premium), and will make a INCYTE CORP. 2017, will leverage its Precision Insights $20m milestone payment ($10m cash and MORPHOSYS AG Platform, which aggregates big data, $10m equity) upon completion of one of In a deal potentially worth up to $2bn, human genetics, and programmable three events: achievement of the primary Incyte Corp. licensed exclusive global data (statistical and machine learning endpoint of overall survival in a pivotal rights to develop and sell MorphoSys AG’s trial with SM88 for pancreatic cancer, algorithms) to identify and prioritize anti-CD19 antibody tafasitamab, an Fc-en- achievement of the primary endpoint of therapeutic targets that have the highest gineered antibody for B-cell cancers. (Jan.) probability of success based on the roles overall survival in the Phase III Precision Incyte paid $900m up front ($750m and Promise registration arm of a trial with the that genes and targets play in disease. a $150m equity investment through the Pancreatic Cancer Action Network, or FDA Internally, Empirico has used the technol- purchase of MorphoSys American De- approval of SM88 in any cancer indication. ogy to generate preclinical candidates in positary Shares). The deal also calls for Once launched, Eagle will carry out 25% multiple areas including immune, derma- up to $1.1bn in development, regulatory, of the promotional sales efforts in the tology, cardiometabolic, and ophthalmol- and commercialization milestones, plus US oncology market and receive 15% of ogy. The same day as the current alliance, tiered royalties on ex-US sales ranging net revenues. The companies could also Ionis also signed a separate partnership from the mid-teens to the mid-twenties study SM88 in combination with Eagle’s with Aro Biotherapeutics to combine anti- (Strategic Transactions estimates 14- oncology pipeline, with potential trials in sense oligonucleotides with Aro’s protein 26%). The partners will co-commercialize breast, lung, and other cancers. therapeutics platform Centyrin. tafasitamab in the US, where MorphoSys

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will book all revenues. Commercialization up to $91m in development and commer- clinical, regulatory, and commercialization activities there will be shared, and the cial milestones if the option is exercised. milestones for multiple projects, and tiered companies will share profits and losses Pulmatrix will also get sales royalties in sales royalties. The Big Pharma gets exclu- 50:50. Costs associated with development the low-single-digits. RV1162/PUR1800 sive global rights, while Taiho retains co- both globally and in the US will be split incorporates Pulmatrix’s iSPERSE (inhaled promotion rights in Japan and an option to 55% Incyte and 45% MorphoSys, though Small Particles Easily ReSpirable and Emit- rights in specific Southeast Asia territories. Incyte agreed to cover all future trials spe- ted) dry powder inhalation technology. Taiho and Astex are both active in the cancer cific only to ex-US countries. MorphoSys The Phase Ib study in stable patients with drug development space, and look forward filed a BLA for tafasitamab in combination chronic obstructive pulmonary disease is to the leverage a partnership with Merck with lenalidomide for relapsed/refractory expected to commence in Q1 2020 and will provide in bringing their preclinical diffuse large B-cell lymphoma; additional trial data is anticipated in Q3 2020. candidates into further development. KRAS development is planned in combination is one of the most common mutations found studies with Incyte’s PI3K-delta inhibi- MEREO BIOPHARMA GROUP PLC in a variety of cancers, especially pancreatic. tor parsaclisib in follicular lymphoma, ONCOLOGIE INC. Merck joins a number of competitors in the marginal zone lymphoma, and chronic Mereo BioPharma Group PLC granted On- KRAS space, including Amgen, Mirati, No- lymphocytic leukemia. The deal adds cologie Inc. exclusive global rights to de- vartis (in partnership with Cancer Research another late-stage program to Incyte’s velop and commercialize navicixizumab, UK), Lilly, and J&J. coffers. Tafasitamab could see approval an anti-DLL4/VEGF bispecific antibody in later this year, as could the company’s Phase I for refractory solid tumors includ- REGENERATIVE MEDICINE OF CHINA INC. pemigatinib for cholangiocarcinoma and ing ovarian cancer. (Jan.) ZHITTYA GENESIS MEDICINE INC. capmatinib for non-small cell lung cancer. Mereo gets $4m up front, a $2m payment Regenerative Medicine of China Inc. (RMC) related to a CMC (chemistry, manufactur- licensed over a 30-year term exclusive mar- IOVANCE BIOTHERAPEUTICS INC. ing, and controls) milestone, and up to keting rights in China, Taiwan, Hong Kong, NOVARTIS AG $300m in development, regulatory, and and Macao to biological drugs developed Iovance Biotherapeutics Inc. gained devel- sales milestones. The company is also by Zhittya Genesis Medicine Inc. (Jan.) opment and commercialization rights to an eligible for tiered royalties ranging from RMC pays Zhittya $75m up front and could antibody cytokine engrafted protein from mid-single-digits to sub-teens (Stra- provide future milestones up to $75m. Novartis AG. (Jan.) tegic Transactions estimates 4-12%). Zhittya’s drug development efforts span Novartis’ compound, which Iovance will Navicixizumab is in a Phase Ib trial in multiple therapeutic areas focusing on name IOV3001, is an engineered IL-2 non- combination with paclitaxel for heavily disorders caused by insufficient blood complementarity determining region (CDR) pretreated ovarian cancer and has also perfusion. Zhittya’s approach use dif- graft, which targets IL-2R beta-gamma- completed a Phase Ia monotherapy study ferent formulations of fibroblast growth expressing cells and limits regulatory T in other solid tumors. Mereo gained the factor 1 (FGF-1) to trigger the angiogenesis cell (Treg) activation. Iovance is developing project through the merger last year with process, which stimulates growth of new cancer immunotherapies based on tumor OncoMed Pharmaceuticals; as a result blood vessels, provides nourishment, re- infiltrating lymphocytes (TILs), in which of the current alliance, former OncoMed moves waste products, and re-establishes immune cells are extracted from a patient’s stockholders are now eligible to receive normal cellular functioning in diseased tumor and then those cells are infused back cash payments under the terms of a CVR tissues that have become ischemic due into the patient’s own tumor tissues where agreement signed in accordance with that to lack of blood flow. Although specific they attack cancer. The biotech will take merger. Oncologie adds navicixizumab to candidates weren’t disclosed, Zhittya over GMP manufacturing during 2020 and a pipeline that includes three other can- has eight active preclinical development expects to initiate IND-enabling activities cer projects--bavituximab (glioblastoma, programs--in diabetic foot ulcers, venous by next year. Iovance provides an up-front advanced hepatocellular carcinoma, leg ulcers, coronary artery disease, pe- payment; development and regulatory and gastric cancers), varisacumab (solid ripheral artery disease, stroke, vascular milestones in the low-single-digits trig- tumors), and lefitolimod (various solid dementia, Alzheimer’s disease, and gered by the initiation of dosing in various tumors, developed in partnership with Parkinson’s disease. Zhittya contracts development phases and approvals in the Mologen.) For Mereo, the out-licensing with a cGMP biologics drug manufacturer US, EU, and Japan; as well as low-to-mid- allows the company to further focus de- to produce clinical and preclinical lots to single-digit sales royalties (1-6%). The velopment efforts on its lead rare disease support its programs. deal will expand the company’s existing candidate setrusumab, which is approach- TIL pipeline, which includes candidates ing a pivotal Phase III pediatric trial for REGENERATIVE MEDICINE OF LATIN for metastatic melanoma, cervical, head osteogenesis imperfecta. AMERICA INC. and neck, non-small cell lung, and blood ZHITTYA GENESIS MEDICINE INC. cancers. In a separate concurrent collabo- OTSUKA HOLDINGS CO. LTD. Regenerative Medicine of Latin America ration, Iovance licensed exclusive world- Astex Pharmaceuticals Ltd. Inc. (RMLA) licensed over a 30-year term wide rights to Cellectis’ TALEN technology Taiho Pharmaceutical Co. Ltd. exclusive marketing rights in Mexico and to develop gene-edited TILs. MERCK & CO. INC. all Latin American countries south of Mexico Merck & Co. Inc. signed a deal with Ot- to biological drugs developed by Zhittya JOHNSON & JOHNSON suka Pharmaceutical Co. Ltd. divisions Genesis Medicine Inc. (Jan.) PULMATRIX INC. Taiho Pharmaceutical Co. Ltd. and Astex RMLA pays Zhittya $76.5m up front and Pulmatrix Inc. granted the Lung Cancer Ini- Pharmaceuticals Ltd. for the development could provide future milestones up to $75m. tiative at Johnson & Johnson an option to and commercialization of small-molecule Zhittya’s pipeline, which includes eight license exclusive global rights to RV1162/ inhibitors of KRAS and other targets. The preclinical development programs--in dia- PUR1800 and a portfolio of related narrow heavily backloaded deal has a potential betic foot ulcers, venous leg ulcers, coronary spectrum kinase inhibitors in develop- value topping $2.5bn. (Jan.) artery disease, peripheral artery disease, ment for lung cancer interception. (Jan.) All three firms agreed to combine preclini- stroke, vascular dementia, Alzheimer’s J&J will pay $7.2m up front, a $2m mile- cal candidates, data, and research. Merck disease, and Parkinson’s disease--focuses stone upon completion of the Phase Ib will fund all research and will pay the two on disorders caused by insufficient blood trial (to be conducted by Pulmatrix), and partners $50m up front, up to $2.5bn in perfusion. Zhittya uses different formula-

52 | In Vivo | February 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - ❚

| 53 DEAL-MAKING In Vivo | In Vivo 2020 February ARMATA PHARMACEUTICALS INC. PHARMACEUTICALS ARMATA LTD. AUTOLUS INC. THERAPEUTICS DIAMOND BLACK CORP. MEDICINES BLUEPRINT II for Parkinson’s diseases and preclinical preclinical and diseases Parkinson’s for II injury). (Jan.) brain traumatic for Cantor Banks/Advisors: Investment - Wed LLC; Co. & Cowen Co.; & Fitzgerald Sciences Life PacGrow bush grossed Inc. Pharmaceuticals Armata - place private a two-tranche through $25m $2.87 at shares common million 8.7 of ment Armata Inc. Innoviva to average) (market to up purchase to warrants issued also at exercisable shares million another 8.7 use to plans The company price. the same including R&D activities for the proceeds program lead its of studies first-in-human as aeruginosa Pseudomonas for APPA02 - Staphylo for APSA02 preclinical as well two appoint will Innoviva Aureus. coccus (Jan.) board. Armata’s to directors - immuno (T-cell PLC Therapeutics Autolus through $75m netted cancer) for therapies American million 7.25 of offering the public ordinary) at to (1:1 Shares Depositary ongoing support will Funds $11 apiece. work including activities, development lymphocytic acute adult for on AUTO1 B-cell large diffuse for AUTO3 leukemia, T- peripheral for AUTO4 and lymphoma, (Jan.) lymphoma. cell - Wain HC Banks/Advisors: Investment Co.; & Chase Morgan JP Co.; & wright Co. & Blair William Inc.; Co. & Jefferies - (preci Inc. Therapeutics Diamond Black through $187m netted oncology) sion million 10.6 of offering public initial its had The company $19. at shares common at shares 8.9 million to sell file originally (Jan.) $16-18. of a range Canaccord Banks/Advisors: Investment JP Morgan LLC; & Co. Cowen Inc.; Genuity Inc. Co. & Jefferies & Co.; Chase (precision Corp. Blueprint Medicines can- defined genomically for therapeutics $308.7m netted diseases) rare and cers million 4.7 of offering a public through support will Funds $69. at shares common commer global company’s the of out build regulatory support to infrastructure cial for Ayva launches upcoming and filings stromal gastrointestinal kit (avapritinib, non- (RET-altered pralsetinib and tumors) thyroid medullary cancer, lung cell small in tumors) other solid and carcinoma, go also will Proceeds Europe. and the US and drug development additional towards (Jan.) costs. manufacturing Canaccord Banks/Advisors: Investment Goldman LLC; & Co. Cowen Inc.; Genuity Raymond LLC; JMP Securities & Co.; Sachs Inc. & Associates James - (N-methyl- Inc. Aptinyx APTINYX INC. APTINYX APPLIED THERAPEUTICS THERAPEUTICS INC. APPLIED APELLIS PHARMACEUTICALS INC. PHARMACEUTICALS APELLIS ALIGOS THERAPEUTICS THERAPEUTICS INC. ALIGOS Neurology-focused Neurology-focused discovery receptor (NMDA) acid D-aspartic public the through $33.6m netted platform) the (including shares million 11.7 of sale use will $3. The company at overallotment) receptor NMDA its advance to the proceeds NYX2925 including pipeline, modulator neuropathy peripheral diabetic II for (Phase - preclini and indications fibromyalgia and peripheral chemotherapy-induced for cal post- II for (Phase NYX783 neuropathy); for preclinical and disorder stress traumatic (Phase NYX458 and disorder); use alcohol (developing (developing Inc. Therapeutics Applied metabolic, cardiovascular, for therapies $134.8m netted diseases) ophthalmic and of offering follow-on an upsized through exercise full (including shares 3.15 million The each. $45.50 at overallotment) the of advance to the funds use to plans company to and galactosemia for AT007 I/II Phase - ongo for launch; commercial for prepare pre-launch potential and ing development diabetic for II/III AT001 Phase for activities preclinical its advance to cardiomyopathy; - retinopa diabetic I for Phase through AT003 (Jan.) R&D activities. additional for and thy; InvestmentBanks/Advisors: Barclays Bank & Sachs Goldman LLC; Co. & Cowen PLC; Bank Investment UBS Co.; - (comple Inc. Pharmaceuticals Apellis in $332m netted inhibitors) system ment at shares 9.5 million of offering a public to the proceeds use will company The $37. potential and development continued fund a of build-out (including commercialization force) sales and infrastructure commercial (APL2), a pegcetacoplan candidate lead of - indica multiple III for in Phase C3 inhibitor, Apellis the financing, with tions. Concurrent III a Phase from results topline announced - hemoglobin nocturnal in paroxysmal study - a 66% like has the candidate which for uria, (Jan.) (7% average). above approval of lihood Fitzger Cantor Banks/Advisors: Investment Partners; Evercore Inc.; Citigroup & Co.; ald Inc. & Co. Baird W. Robert & Co.; JP Morgan (therapies for he- for (therapies Inc. Therapeutics Aligos raised infections) viral and diseases patic B series in an oversubscribed $125m Management Wellington by led financing - manage investment an undisclosed and first-time by joined were firm, which ment Boxer Investor, Henderson Janus backers Cormorant Group, Tavistock of Capital bioVenture Pivotal Management, Asset returning and Capital, Logos and Partners, Versant Capital, Vivo investors A series Venture Roche Holdings, Novo Ventures, fund. healthcare an undisclosed and Fund, in 2018 when founded was The company (Jan.)A round. $100m in a series raised it - - - - , the companies are studying studying are companies the , Regenerative Medicine of China of China Medicine Regenerative Chugai Pharmaceutical Co. Ltd. li- Co. Pharmaceutical Chugai - Veras as known (also Inc. Verastem FINANCINGS VERASTEM INC. VERASTEM ROCHE ADAPTIMMUNE THERAPEUTICS THERAPEUTICS PLC ADAPTIMMUNE a combination of CH5126766 and defac and CH5126766 of a combination small-molecule oral (Verastem’s tinib inhibitor (FAK) kinase adhesion focal advanced KRAS-mutant for II) Phase in serous low-grade including tumors, solid - can lung cell non-small cancer, ovarian The MEK/FAK cancer. colorectal and cer, be beneficial, to believed is combination signaling FAK activates inhibition MEK as drug for mechanism escape a potential as to According survival. cell and resistance potential at be looking will it Verastem, CH5126766. for partnering strategies a companion been developing had Roche the cur but the candidate, for diagnostic KRAS-targeting unknown. is status rent been an have in the pipeline therapies of because development for area active cur are There results. clinical positive the and drugs, KRAS no approved rently ’s Amgen is on the horizon program lead non- and colorectal II for in Phase AMG510 cancers. lung cell small tem Oncology) worldwide rights to develop to rights worldwide Oncology) tem inhibitor RAF/MEK I dual Phase its sell and for RG7304) RO5126766; (CKI27; CH5126766 (Jan.) tumors. solid KRAS-mutant sales plus front up $3m pay will Verastem began that I trial Under a Phase royalties. - Ve by sponsored is and 2017 in December Health National the UK’s Chugai, rastem, of Cancer Institute the UK’s , and Service Research tions of fibroblast growth factor 1 (FGF-1) to 1 (FGF-1) factor growth fibroblast of tions of growth stimulates to angiogenesis trigger normal re-establish and vessels new blood that tissues in diseased functioning cellular blood of lack due to ischemic become have a cGMP biolog with contracts Zhittya flow. ’s Roche censed Chugai Pharmaceutical Co. Ltd. Ltd. Co. Pharmaceutical Chugai ics drug manufacturer to produce clinical clinical produce to drug manufacturer ics programs. its support to lots preclinical and a 30-year signed Zhittya month, this Earlier it which in terms similar with agreement granted in China, rights marketing exclusive Inc. biologic to Macao and Kong, Hong Taiwan, produces. it drugs (cancer im- (cancer PLC Therapeutics Adaptimmune - pub a through $79m netted munotherapies) Depositary American 21 million of offering lic at ordinary) 126 million (representing Shares the that believes Adaptimmune $4 per ADS. combined offering, the from proceeds net - collabora expected and cash existing with operations company fund will revenues, tion (Jan.) 2021. of half the second into & Co. Cowen Banks/Advisors: Investment Partners Capital Roth LLC; company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

CONCERT PHARMACEUTICALS INC. HUTCHISON CHINA MEDITECH LTD. metabolic diseases) netted $47m in a Concert Pharmaceuticals Inc. netted $61m Hutchison China MediTech Ltd. (Chi-Med) follow-on public offering of 32.26 million through the public offering of 4.75 million netted $103.4m through the public offer- common shares at $1.55 each. The com- shares at $9.92 and pre-funded warrants ing of 4.4 million American Depositary pany will use most of the proceeds for to purchase 1.8 million shares at $9.919. Shares (representing 22 million ordinary) development of its lead clinical program The company will use the proceeds to at $25 per ADS. The company is devel- MAT9001 for hypertriglyceridemia. (Jan.) advance CTP543 (a deuterium-modified oping immunotherapies for cancer and Investment Banks/Advisors: BTIG LLC; version of ruxolitinib) into Phase III for autoimmune diseases, and will put the HC Wainwright & Co.; Maxim Group LLC; alopecia areata and to fund pipeline proceeds towards ongoing development, Piper Jaffray & Co.; Roth Capital Partners; development, including CTP692 (a manufacturing, and commercialization SunTrust Banks Inc. activities. (Jan.) deuterium-modified form of D-serine) for MIRATI THERAPEUTICS INC. Investment Banks/Advisors: Bank of schizophrenia through Phase II, for which Mirati Therapeutics Inc. (oncology) net- topline data is expected by year end. (Jan.) America Merrill Lynch; CLSA; Canaccord Genuity Inc.; Deutsche Bank AG; Goldman ted $324.3m through the public sale of Investment Banks/Advisors: HC Wain- Sachs & Co.; HSBC; Morgan Stanley & Co.; 3.5 million common shares (including the wright & Co.; JMP Securities LLC; Jefferies Panmure Gordon overallotment) at $97.50. Some of the pro- & Co. Inc.; Mizuho Bank Ltd. ceeds will support continued development I-MAB BIOPHARMA CO. LTD. of solid tumor candidates MRTX849 and DBV TECHNOLOGIES SA I-Mab Biopharma Co. Ltd. netted $96.4m sitravatinib, in addition to other preclini- DBV Technologies SA (food allergy im- through its initial public offering in the US cal and manufacturing activities. (Jan.) munotherapies) netted $144.5m through of 7.4 million American Depositary Shares Investment Banks/Advisors: Cowen & Co. a global offering of 7.5 million ordinary (representing 17 million ordinary shares) LLC; Credit Suisse Group; Goldman Sachs shares: 4,535,581 ordinary shares in the priced at $14 per ADS. (Jan.) & Co.; SVB Leerink form of 9.1 million American Depositary Investment Banks/Advisors: China Re- MIRUM PHARMACEUTICALS Shares (ADSs) in the US, Canada and cer- naissance; Jefferies & Co. Inc. tain countries outside of Europe at a public Mirum Pharmaceuticals Inc. (liver disease offering price of $10.25 per ADS and 2.96 IMMUNOGEN INC. therapies) netted $45m through a public million ordinary shares at a public offer- ImmunoGen Inc. sold 24.5 million com- offering of 2.4 million common shares at ing price of €18.63 ($20.49) per ordinary mon shares (including the overallotment) $20. Funds will support continued devel- share to qualified investors in Europe at $4.25 in a public offering that net- opment of maralixibat for Alagille syn- (including France). Proceeds will support ted $98m. The company is developing drome, progressive familial intrahepatic the upcoming launch of Viaskin Peanut antibody-drug conjugates for cancer, cholestasis, and biliary atresia, as well (2H 2020, if approved), and additional and will use the funds to support clinical as volixibat for intrahepatic cholestasis R&D activities. (Jan.) trials, supply, and pre-commercialization of pregnancy and primary sclerosing activities. (Jan.) cholangitis. (Jan.) Investment Banks/Advisors: Citigroup Investment Banks/Advisors: Citigroup Inc.; Goldman Sachs & Co.; HC Wainwright Investment Banks/Advisors: Cowen & Co. Inc.; Evercore Partners; Guggenheim Part- & Co.; JMP Securities LLC; Kempen & Co. LLC; Jefferies & Co. Inc.; William Blair & Co. ners LLC; Raymond James & Associates INFINITY PHARMACEUTICALS INC. DENALI THERAPEUTICS INC. Inc.; Roth Capital Partners Infinity Pharmaceuticals Inc. entered into Denali Therapeutics Inc. netted $169.2m a $20m non-dilutive royalty financing NOVOME BIOTECHNOLOGIES INC. through the public offering of 7.8 million with its largest shareholder BVF Partners. Three-year-old Novome Biotechnologies shares at $23. The company will use the BVF will realize royalties due Infinity Inc. raised $33m in its series A financing proceeds to fund further development from PellePharm for future sales of the led by DCVC Bio, which was joined by of its LRRK2 inhibitor program, includ- hedgehog pathway inhibitor patidegib, 5AM Ventures, Alta Partners, Alexandria ing completion of Phase I and Phase Ib which is in Phase III to reduce the basal Venture Investments, and Mayo Clinic. trials for DNL151 in Parkinson’s disease cell carcinoma burden in patients with A representative from DCVC Bio and Alta (expected in mid-2020) and the advance- Gorlin syndrome. (BVF could also make a Partners will join the board. (Jan.) ment of either DNL201 or DNL151 into $5m payment for positive Phase III data Phase II/III trials in PD; a Phase I/II trial of the candidate.) Infinity has the right ONCONOVA THERAPEUTICS INC. of enzyme replacement DNL310 (ETV:IDS) to repurchase the rights for $20m plus Oncology firmOnconova Therapeutics Inc. in Hunter syndrome planned for 1H 2020; interest during the next three years. The netted $9.3m through a private placement a Phase I study of EIF2B activator DNL343 financing will support key data readouts to two health care-focused institutional in- in amyotrophic lateral sclerosis expected from now until the second half of 2021 vestors of 27.66 million common shares at in early 2020; and RIPK1 inhibitors DNL747 on five ongoing solid tumor trials with $0.3615 (a 6% premium). HC Wainwright and SNL758 (in collaboration with partner sole candidate IPI549, a PI3K-gamma was the placement agent. The company re- Sanofi); and to advance other candi- inhibitor. (Jan.) cently netted $4.65m through a separate PIPE that closed last month. (Jan.) dates, including IND-enabling studies for LEAP THERAPEUTICS INC. PTV:PGRN and ATV:TREM2 for AD, which Investment Banks/Advisors: HC Wain- Leap Therapeutics Inc. grossed $27m are partnered with Takeda. Denali also wright & Co. through a private placement of convertible plans to potentially use some of the mon- preferred shares. Raymond James was the OSMOTICA PHARMACEUTICALS PLC ies to support future development and placement agent. (Jan.) Osmotica Pharmaceuticals PLC (specialty early-stage R&D programs. (Jan.) Investment Banks/Advisors: Raymond extended-release generics) netted $28m Investment Banks/Advisors: Goldman James & Associates Inc. through the public offering of 6 million Sachs & Co.; HC Wainwright & Co.; JP ordinary shares at $5. In November 2019, Morgan & Co.; Janney Montgomery Scott MATINAS BIOPHARMA HOLDINGS INC. Osmotica announced the FDA accepted Inc.; Jefferies & Co. Inc.; Nomura Securi- Matinas BioPharma Holdings Inc. (treat- its NDA filing for RVL1201 (oxymetazoline ties International Inc. ments for cardiovascular, infectious, and hydrochloride) ophthalmic solution, 0.1%

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for acquired blepharoptosis (droopy eyelid or ptosis) with a PDUFA goal date of July 16, 2020. (Jan.) editors editorial advisory board Investment Banks/Advisors: Jefferies & Lucie Ellis Brian Chapman Co. Inc.; RBC Capital Markets; SVB Leer- Executive Editor ZS Associates, Partner ink; SunTrust Banks Inc. Ben Comer TRILLIUM THERAPEUTICS INC. Pharma Editor Don Creighton Immuno-oncology firmTrillium Therapeu- Ashley Yeo ICON, Global Head of Pricing tics Inc. netted $110m through a public Medtech Editor & Market Access offering of common and preferred shares. The company sold 41.3 million common Amanda Micklus Principal Analyst Sara Jane Demy (including the overallotment) at $2.75 Demy Colton, CEO and also issued 1.25 million series II non- Andrea Charles voting convertible first preferred shares at Custom Content Editor $2.75. Proceeds will support development Regina Paleski Barbara Freischem of the company’s CD47 programs includ- Contributing Editor European Biopharmaceutical ing TTI621 in patients with B- and T-cell Enterprises lymphomas and other blood cancers, and Executive Director TTI662 for lymphoma and myeloma. (Jan.) director, medtrack & Investment Banks/Advisors: Bloom Bur- strategic transactions content Les Funtleyder ton & Co.; Cowen & Co. LLC Patricia Giglio E Squared Capital Management Health Care Portfolio Manager XENON PHARMACEUTICALS INC. deals analysts Beth Detuzzi, Deanna Kamienski CNS-focused Xenon Pharmaceuticals Maureen Riordan Inc. (small-molecule ion channel drug Annlisa Jenkins development) netted $56.4m through the PlaqueTec, CEO public offering of 3.75 million shares at head of publication design $16. The company will use the proceeds Gayle Rembold Furbert Harris Kaplan to support clinical development related Red Team Associates, to Kv7 potassium channel modulators senior designer Managing Partner XEN1101 (Phase IIb for epilepsy) and Janet Haniak XEN496 (ezogabine; in preclinical stud- designers ies for KCNQ2 epileptic encephalopathy Debi Robinson, Jean Marie Smith, Ellen Licking Paul Wilkinson EY, Senior Analyst, in pediatric patients) and Cav2.1 calcium Global Life Sciences channel modulator XEN007 (flunarizine; in Phase II for epilepsy and preclinical development for hemiplegic migraine head of editorial ops (pharma) Roger Longman and alternating hemiplegia, orphan CNS Karen Coleman Real Endpoints, Chairman conditions); fund discovery activities; and advertising potentially expand its business through Christopher Keeling William Looney the in-licensing or acquiring of candi- Specialist Writer dates, products, or companies. (Jan.) subscriptions Investment Banks/Advisors: Guggenheim Dan Simmons, Shinbo Hidenaga Partners LLC; Jefferies & Co. Inc.; Stifel managing director Kenneth Schultz, MD Nicolaus & Co. Inc. Phil Jarvis Trethera Corporation, Chairman and CEO ZYMEWORKS INC. (multifunctional biologics Zymeworks Inc. editorial office Melanie Senior for cancer) netted $301.6m through a pub- 605 Third Avenue, Floor 20-22 Healthcare Writer & Analyst lic offering of 5.8 million common shares New York, NY 10158 (including the overallotment) at $46.50 invivo.pharmaintelligence.informa.com and 1.07 million pre-funded warrants Jack Wong priced at $46.4999. Funds are earmarked customer service Allergan, Associate VP, Regulatory Affairs, for continued development of ZW25 as [email protected] Asia Pacific, Middle East & Africa a single agent and combination therapy for HER2-expression tumors including gastroesophageal, biliary tract, breast, and others, and will also support work on IN VIVO: [ISSN 2160-9861] is published monthly, except for the combined July/August issue, ZW49 for locally advanced or metastatic by Informa Business Intelligence, Inc., 605 Third Avenue, Floor 20-22, New York, NY 10158. HER2-expressing cancers that have pro- US Toll-Free: +1 888 670 8900 | US Toll: +1 908 547 2200 | UK & Europe: +44 (20) 337 73737 gressed following treatment with existing Australia: +61 2 8705 6907 | Japan: +81 3 6273 4260 approved therapies. (Jan.) Office of publication, The Sheridan Group, 66 Peter Parley Row, Berlin, CT 06037. Investment Banks/Advisors: Citigroup Postmaster: Send address changes to Informa Business Intelligence, 605 Third Avenue, Inc.; JP Morgan Chase & Co.; Raymond Floor 20-22, New York, NY 10158. James & Associates Inc.; Stifel Nicolaus & © 2020 by Informa Business Intelligence, Inc., an Informa company. Co. Inc.; Wells Fargo Securities LLC All rights reserved. No part of this publication may be reproduced in any form or incorporated into any information retrieval system without the written permission of the copyright owner.

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