< PreviousM&A ROUND-UP 10 Pharma Business International www.pbiforum.net © stock.adobe.com/ Tada Images Big Pharma braces itself Big Pharma br aces itselfPharma Business International 11 www.pbiforum.net M&A ROUND-UP raft of acquisitions has hit the headlines since Pharma Business International’s last issue, seeing potential for further recovery in the pharmaceutical industry’s dealmaking activity. With large cash reserves, with around $700bn for acquisitions and investment, according to Goldman Sachs Research, and looming patent expiries exposing $200bn of branded drugs to competition from generics, Big Pharma’s appetite for M&A is expected to grow, though regulatory uncertainty could present a hurdle. Though not quite reaching the heights of Pfizer’s $43bn swoop for Seagen and Merck’s $10.8bn deal for Prometheus Biosciences, significant acquisitions have been made by major pharmaceutical companies in the past couple of months. Biogen - Reata Pharmaceuticals At the end of July, Biogen revealed its intentions to acquire Reata Pharmaceuticals for $172.50 per share in cash, reflecting an enterprise value of approximately $7.3bn. Reata has made significant advancements developing therapeutics that regulate cellular metabolism and inflammation in serious neurologic diseases. Its FDA- approved SKYCLARYS (omaveloxolone) is the first and only approved treatment for Friedreich’s ataxia (FA) in the United States, with a commercial launch underway, and European regulatory review ongoing. Christopher Viehbacher, Biogen’s president and Chief Executive Officer, said: “With extensive expertise in rare disease product development and global commercialization, as demonstrated by SPINRAZA and the recent launch of QALSODY, we believe Biogen has the foundation in place to accelerate the delivery of SKYCLARYS to patients around the world. This is a unique opportunity for Biogen to bolster our near-term growth trajectory, and SKYCLARYS is an excellent complement to our global portfolio of treatments for neuromuscular and rare disease.” Eli Lilly and Company - DICE Therapeutics, Sigilon Therapeutics, Versanis Bio Eli Lilly and Company, meanwhile, has recently made a trio of acquisitions. The first of these will see the pharma giant acquire DICE Therapeutics in a $2.4bn deal. DICE is a biopharmaceutical company that leverages its proprietary DELSCAPE technology platform to develop novel oral therapeutic candidates, including oral IL-17 inhibitors currently in clinical development, to treat chronic diseases in immunology. Patrik Jonsson, executive vice president, 12 Á Huge cash reserves and a looming patent cliff are expected to see a surge in dealmaking for Big Pharma. M&A ROUND-UP 12 Pharma Business International www.pbiforum.net president of Lilly Immunology and Lilly USA, chief customer officer, said: “In combination with its novel technology and expertise in drug discovery, DICE’s talented workforce and passion for innovation will enhance our efforts to make life better for people living with devastating autoimmune diseases. We welcome DICE colleagues to Lilly and, together, we can tackle the challenges ahead in finding new treatments for patients with significant unmet medical needs.” Kevin Judice, Ph.D., CEO of DICE Therapeutics, added: “We’re eager to see our pipeline, including our oral IL-17 inhibitors, DC-806 and DC-853, benefit from Lilly’s resources and global reach and I’m excited by the prospect of watching these two talented teams in a united quest for scientific innovation. Our novel approach to discovering and advancing oral, small molecules against validated protein-protein interaction targets has even greater potential with Lilly’s industry-leading clinical development capabilities to get these medicines to patients suffering from autoimmune diseases.” Lilly has further announced a definitive agreement to acquire all outstanding shares of Sigilon Therapeutics, a biopharmaceutical company that seeks to develop functional cures for patients with a broad range of acute and chronic diseases, in a $309.6m deal. The total consideration excludes Sigilon shares currently held by Lilly. Lilly and Sigilon have worked together since 2018 to develop encapsulated cell therapies, including SIG-002, for the treatment of type 1 diabetes. The aim of these therapies is to free patients from constant disease management by sensing blood glucose levels, restoring insulin production and releasing it over the long term. “This agreement represents the culmination of the important work led by our research and development team to continue advancing SIG-002 at Lilly – the preeminent leader in the treatment of diabetes,” said Rogerio Vivaldi, M.D., CEO of Sigilon. “With deep industry expertise, Lilly is well-positioned to apply its industry-leading clinical and technical capabilities to harness the full potential of SIG-002 for the benefit of patients and their caregivers.” Finally, Lilly is set to snap up Versanis Bio, a private clinical-stage biopharmaceutical company focused on the development of new medicines for the treatment of cardiometabolic diseases. Under the terms of the agreement, Versanis shareholders could receive up to $1.925bn. Versanis’ lead asset is bimagrumab, a monoclonal antibody that binds activin type II A and B receptors to block activin and myostatin signaling. Bimagrumab is currently being assessed in the BELIEVE Phase 2b study alone and in combination with semaglutide in adults who are overweight or obese. Combining incretins with bimagrumab has the potential to further reduce fat mass while preserving muscle mass and may lead to © stock.adobe.com/ MichaelViPharma Business International 13 www.pbiforum.net M&A ROUND-UP better outcomes for people living with obesity and obesity-related complications. “Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans,” said Ruth Gimeno, Ph.D., group vice president, diabetes, obesity and cardiometabolic research at Lilly. “By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients.” Novartis - Chinook Therapeutics, DTx Pharma Novartis has also made multiple acquisitions, swooping for Chinook Therapeutics in a $3.5bn deal and DTx Pharma in a $1bn agreement. Chinook Therapeutics is a Seattle- based clinical stage biopharmaceutical company with two high-value, late-stage medicines in development for rare, severe chronic kidney diseases. Vas Narasimhan, M.D., CEO of Novartis, said: “IgA Nephropathy is a devastating disease mostly affecting young adults and potentially leading to dialysis or kidney transplantation. We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients. We look forward to closing the deal, to a smooth transition for Chinook employees and to welcoming them to Novartis.” DTx Pharma is a San-Diego-based, preclinical stage biotechnology company focused on leveraging its FALCON platform to develop siRNA therapies for neuroscience indications. DTx’s lead program, DTx-1252 targets the root cause of CMT1A—the overexpression of PMP22, a protein that causes the myelin sheath that supports and insulates nerves in the peripheral nervous system to function abnormally. DTx-1252, which was recently granted Orphan Drug Designation by the U.S. Food and Drug Administration (FDA), decreases the expression of this protein in Schwann cells, the target cell type for the development, maintenance, and function of peripheral nerves. The FALCON platform facilitates this targeted approach by conjugating siRNAs to naturally occurring fatty acids to improve the biodistribution and cellular uptake to tissues and cell types of interest. Fiona Marshall, president of the Novartis Institutes for BioMedical Research (NIBR), said: “We look forward to continuing the development of DTx’s therapeutic programs and bringing new hope to patients with neuromuscular and other neurological disorders for which there have historically been few treatment options. We are also excited to bring DTx’s FALCON technology to Novartis and explore its potential to deliver drugs to extrahepatic tissues.” © stock.adobe.com/ diy13MATERIALS HANDLING 14 Pharma Business International www.pbiforum.net Handling the Materials handling is more important in pharma than any other industry and the explosive growth expected for the sector proves it. IssuePharma Business International 15 www.pbiforum.net MATERIALS HANDLING © stock.adobe.com/ gopixa I mplementing a HACCP (Hazard Analysis Critical Control Points) system in pharma processing facilities provides a checklist for identifying and controlling potential hazards at critical stages of the production process. From strict adherence to hygiene protocols – including cleaning methods and rotas – to regular monitoring schedules, systems such as these make excellent starting points in defining each action needed to handle pharmaceutical products appropriately and safely. Efficiency is another core objective of materials handling in the industry. Streamlining production processes and optimising storage facilities help to reduce operational costs and minimise waste, improving the overall productivity of your business. Rethinking how and when materials move between these areas will create a smooth flow of goods throughout the production and distribution cycle. This means minimising unnecessary handling and reducing wait times between processes wherever possible. Optimising the layout of the production facility and storage areas will ensure materials are never handled or held in one place for too long, while reducing travel time between processes. Trying out automated conveyance systems or robotics are optional added extras but can reduce human workload and speed up the entire process for those who can afford them. Effective materials handling also contributes to maintaining product quality throughout the supply chain. From the moment raw materials are received to the point of consumption, the careful handling of goods prevents physical damage and maintains a product’s viability. To avoid unnecessary waste, set up and be consistent with routine inspections and quality checks during stages such as raw material receiving, processing and packaging. Here too, machinery and robotics can be employed to ease the stress load on human workers, with automated sensors and quality control tools available to detect defects, and then remove these substandard products from the production line. Proper documentation and traceability are just as essential for demonstrating compliance in the unfortunate event of audits or recalls. Assigning batch numbers or lot codes to each product during handling enables fast and accurate traceability, while maintaining comprehensive records of the movement and processing of each batch will make it even easier to trace the origin of any quality issues and allow targeted recalls if needed. During the majority of occasions when quality checks catch every flaw, appropriate packaging and protection of 16 ÁMATERIALS HANDLING 16 Pharma Business International www.pbiforum.net products will ensure they survive transportation and storage to reach consumers in optimal condition. The pharmaceutical world is high-pressure enough without materials handling problems causing drops in efficiency along a manufacturing chain. The method by which material is moved from one machine to another will differ greatly depending on whether it is liquid, solid or in any other state, and the risk of contamination (either with other product or with employees) will dictate containment facilities and procedures. At all places, the amount of risk must be assessed, and that is difficult to do when you’re looking to change up an existing system. It’s much easier when starting with scratch and planning out a manufacturing line considering available space, purpose and investment, but more often than not the need for changes will come later down the line, when it’s harder to make those adjustments. Careful planning can only get a company so far after all – technology changes and updates and staying on top of it all is important. While projects that are planned out in advance are obviously more likely to succeed, work undertaken later must still involve a degree of planning. How will the adjustment be made, what equipment will be used, and how best the work be undertaken so as not to risk both the wellbeing of workers but also the functionality of the line? Less disruption is better but rushed work might lead to more later. The question of automation is not so much a question in our industry as it is in many others. There are still many manufacturers in food and drink for instance that choose to limit automation to save costs, but the need for hygiene in pharma means that automation remains king and is likely to keep that crown for the foreseeable future. The automated materials handling market is expected to reach a value of over $51 billion by 2025, with the expansion of third party logistics Pharma Business International 17 www.pbiforum.net MATERIALS HANDLING © stock.adobe.com/ opterandmom (3PL) industries leading to mass adoption of the technology. With 3PL’s being more commonly used now than ever before, the businesses are updating and upgrading their materials handling systems to cope with the influx of new business and ensure they can meet the demand. This new investment will be a driving force for the industry, both enrichening it and leading to further development which may, in time, be efficient enough for those same 3PL’s to invest again, creating a symbiotic relationship. Speaking of materials handling in warehouses and distribution centres, there has been a rise in demand for Automatic Guided Vehicles (AGVs) to transport workers and products across the vast expanse of a depot. They remove the requirement for manually operated forklifts, lessening costs for hiring workers who are qualified to operate such machinery. AGV’s can also operate for 24 hours a day. They utilise Artificial Intelligence to drive across pre-determined routes, pick up material, and transport it to another pre- determined destination. This decreases time delays, and the risk of misplaced goods, as a tracking system is integrated, which can be reviewed on a cloud-based system. © stock.adobe.com/ SiniehinaPACKAGING 18 Pharma Business International www.pbiforum.net Sustainable, traceable, profitable Sustainable, traceable, profitable Pharma Business International 19 www.pbiforum.net PACKAGING © stock.adobe.com/Artinun I t is not enough nowadays for pharma products to simply be protected by its end of line packaging. For the investment that has been put into it, the packaging must make the process more efficient and – if possible – both cheaper and made to more sustainable standards. This is more important than ever given the rising cost of fuel and the skills shortages that are gripping the logistics industry. It is still more common than not for pharmaceutical products to be transported by road by lorry, often refrigerated or chilled, but not always. In these cases, the biggest investment often comes from fuel, with the item that a company is buying essentially being the empty space in the back of the vehicle. The problem comes from the fact that in many cases, all this space cannot be utilised. The weight of products will push down on those stacked beneath them, often damaging products. Obviously, this is unacceptable with delicate medicine be it in pills, bottles or any other form, and thus it is not uncommon for space to go unused in the back of a vehicle. Boxes are stacked as high as they can be and no further. This is empty space that still had to be paid for. Strong and rigid end of line packaging can help prevent this, strengthening and protecting the product so that more of it can be stacked without damage. This can be a delicate task, least of all because stronger material will undoubtedly be more expensive. There is a necessity to judge and test on how much is saved by filling lorries further than they were before, and whether this takes a significant number of vehicles off the road. In many cases this will depend on the product itself and how fragile it is. Pharmaceuticals more prone to breakage such as those served in glass bottles, will benefit more from the stronger packaging. Counterfeit drugs and other medical products continue to plague the pharmaceutical sector and put patients at risk. The financial damage can also be significant, and so a reliable solution needs to be implemented in order to eradicate this illegal trade. Track and trace has frequently proven its ability to strengthen the supply chain, prove effective for manufacturers and keep patients safe from unregulated and potentially harmful products. It proves that packaging will remain critical going forward, as track and trace systems There’s no easy means of defining end of line packaging given the depth of its capabilities and requirements. It’s an industry constantly in flux, moving quickly to try and keep up with legislation and trends, while remaining efficient enough to keep the pharmaceutical industry turning a profit. Yet it’s also doing this while meeting the growing requirement for energy efficiency in the supply chain. 20 ÁNext >