< PreviousM&A ROUND-UP 10 Pharma Business International www.pbiforum.net development, manufacturing and commercialisation rights in the US and Japan for Telavant’s RVT-3101, a novel TL1A directed antibody and a promising new therapy for people suffering from inflammatory bowel disease, including ulcerative colitis and Crohn’s disease. Given the antibody’s novel mode of action targeting both inflammation and fibrosis, it has potential to be applied in multiple other diseases. Thomas Schinecker, CEO, Roche Group, said: “We strongly believe this novel TL1A directed antibody has the transformational potential to make a significant difference for patients living with inflammatory bowel disease and potentially other diseases. We are excited to add this promising new therapy in development to our portfolio and to make it available to patients as quickly as possible.” Following the closing of the transaction, expected to take place in Q4 2023 or in Q1 2024, Roche will additionally have an option to enter into a global collaboration with Pfizer on a next- generation p40/ TL1A directed bispecific antibody, currently in Phase 1. Bristol Myers Squibb - Mirati Therapeutics Moreover, Bristol Myers Squibb and Mirati Therapeutics have entered into a definitive merger agreement under which the former has agreed to acquire the latter for $58.00 per share in cash, for a total equity value of $4.8 billion. Mirati stockholders will also receive one non- tradeable Contingent Value Right (CVR) for each Mirati share held, potentially worth $12.00 per share in cash, representing an additional $1 billion of value opportunity. Commercial stage targeted oncology company Mirati’s assets are a strong fit with Bristol Myers Squibb’s portfolio and innovative pipeline and represent a chance to grow Bristol Myers Squibb’s oncology franchise. Through this acquisition, Bristol Myers Squibb will add KRAZATI, a lung cancer medicine, to its commercial portfolio. The company further gains access to several promising clinical assets that complement its oncology pipeline and are strong candidates for single agent development and combination strategies. Giovanni Caforio, CEO and board © stock.adobe.com/Valeriya ZankovychPharma Business International 11 www.pbiforum.net M&A ROUND-UP chair, Bristol Myers Squibb, said: “We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients. With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.” Bristol Myers Squibb also recently acquired Orum Therapeutics’ ORM-6151 program in a $180 million deal. ORM- 6151 is a first-in-class, anti-CD33 antibody-enabled GSPT1 degrader that has received the FDA’s clearance for Phase 1 for the treatment of patients with acute myeloid leukemia or high-risk myelodysplastic syndromes. MSD - Caraway Therapeutics Finally, in a smaller transaction, MSD (Merck & Co.) has entered into a definitive agreement to acquire Caraway Therapeutics, through a subsidiary, for a total potential consideration of up to $610 million, including an undisclosed upfront payment as well as contingent milestone payments. Caraway is a preclinical biopharmaceutical company that has built a pipeline of novel, small- molecule therapeutics for the treatment of genetically defined neurodegenerative and rare diseases. George Addona, senior vice president, discovery, preclinical development and translational medicine, MSD Research Laboratories, said: “Caraway’s multidisciplinary approach has yielded important progress in evaluating novel mechanisms of modulation of lysosomal function with potential for the treatment of progressive neurodegenerative diseases. We look forward to applying our expertise to build upon this work with the goal of developing much needed disease- modifying therapies for these conditions.” MSD, through its MRL Ventures Fund, has been a shareholder of Caraway Therapeutics since 2018. These represent just some of the key recent deals in the pharmaceutical industry, with many more being made across the spectrum, from the large to the small. © stock.adobe.com/Rafael HenriqueEND OF YEAR SUCCESS STORIES 12 Pharma Business International www.pbiforum.net A market ripe for the picking There’s no denying the economical outlook has been troubling for the year, but those able to navigate the choppy waters have reaped dividends. As 2023 comes to an end, we look at what went right and what trends might be in stock for 2024. Pharma Business International 13 www.pbiforum.net END OF YEAR SUCCESS STORIES © stock.adobe.com/artemstepanov I t’s been a year of geopolitical uncertainty that looks like it’s bound to continue into 2024, and this comes off the back of a weak 2022, so how has the pharma industry done? Against all odds, or perhaps because of those tall odds, the outlook doesn’t look so dark. While it’s undeniable that there are a lot of problems in the industry – from pressure on finances to a dearth of recruitable talent through to a loss in consumer trust off the back of conspiracy theorists – there has also been a lot of upbeat notes. The industry has bounced back from very low levels of M&As in 2022 to a much healthier amount in 2023, and certain regions have experienced almost explosive growth. The pharma sector in India, for example, has done very well for itself with over 30 partnerships, MOUs and collaborations announced in the year alone. The pharma products market in India is expected to reach $130 billion by 2030, which is impressive given the worldwide pharma value was at $1.4 trillion in 2022. India is also experiencing a rise in investment in research and development, with the top 10 companies in India signalling an increase of an average of 7.6% in R&D from 2022 to 14 ÁEND OF YEAR SUCCESS STORIES 14 Pharma Business International www.pbiforum.net 2023 which, on top of the numerous collaborations, is set to pay dividends in coming years. While the pharma industry is generally rising across the globe (at least when one relies on statistics) it does feel like India is having a better time than some western regions, especially in the EU. An interesting trend rising in 2023 has also seen a reduction in engagement from health care providers (HCP) with the pharma industry or its representatives. In Europe especially, it’s been noted that as many as 65% of HCPs are limiting their contact with pharma companies to just three selected companies, which could negatively impact the ability for providers to suggest medicines to patients. A major reason for this is thought to be the issue of time-sensitivity. Simply put, there are more time constraints on HCPs and more demands on their time that they feel their only options are to limit engagement with the pharma industry. This is especially prevalent in the UK, according to the research, which suggests that they’re leading the “initiative” with 94% of HCPs only contacting three or less pharmaceutical companies compared to only 50% in Spain. Given the immense pressure on the UK’s health system, it should not come as a surprise, but this is still something that pharma companies may want to look toward in 2024. If HCPs are only engaging with a select few companies then those companies will only be pushing their products, creating unfair balances that could harm not only profits, but patient care – as providers, pharmacists and doctors further down the chain simply won’t be aware of drugs they can provide to their patients/customers. What the solution to this will be is hard to say, as it’s undeniable that HCPs are lacking in time and are feeling pressured. Opening up more available time may be difficult for pharma companies to push, as the issues are on the side of the HCPs © stock.adobe.com/Mike Mareen © stock.adobe.com/WESTOCKPharma Business International 15 www.pbiforum.net and might be related to poor infrastructure or investment. What the research did find was that face-to-face meetings were still more successful in terms of forming bonds, so personal visits and meetings ought to be preferred to online or remote conferences no matter how convenient the latter might be. With COP28 underway at the time of writing this, one route that’s going to be in the limelight moving into 2024 is that of sustainability – and it’s an angle that investors are taking notice of. 1nhaler recently managed to acquire £2 million in investment from angel and seed investors for the development of a single-use sustainable inhaler, and the UK’s NHS are also pursuing a “single route” system with companies working with the NHS to become carbon neutral by 2045. Businesses in the pharma sector have been happy to play the card of sustainability to impress the people expecting them to, but we are fast reaching the stage where actions are being demanded, and those companies who are all bluster are finding themselves struggling in an increasingly competitive market. FINANCE AND INVESTMENT 16 Pharma Business International www.pbiforum.net I nstability, wars, sky-high inflation. It’s not a good time for finance in any industry, but at times when people’s bank balances are under pressure, it’s often the case that expensive medicines, and the companies who produce them, come under the crosshairs for what people see as profit-making off life- saving products. And it is. There’s little point pretending otherwise if you’re in the pharma industry. Geopolitical pressure is putting a strain on many countries, most recently of all Israel and Palestine, but before that Ukraine and Russia. 2024 will also see the next US elections, which are primed to be highly controversial and also highly involved as Russia, China and Iran all join in to cast their ballots in an election they’re not supposed to be a part of. Simply put, the problems of 2022 and 2023 are highly likely to continue into 2024 and maybe even beyond. As UK Chancellor Jeremy Hunt told the pharma industry earlier this year, the UK government has no “magic wand” to deal with issues of financial pressure. And there is a lot of pressure. In the UK, the taxes on the sale of drugs to the Global pressure Finance is a tricky subject for pharma every year. At the end of 2022 we talked of the struggles the world has faced with regards to economies, inflation and economic pressure – and that’s only gotten worse through 2023. 18 ÁPharma Business International 17 www.pbiforum.net FINANCE AND INVESTMENT © stock.adobe.com/EgorFINANCE AND INVESTMENT 18 Pharma Business International www.pbiforum.net NHS have risen to 26.5% when they were only 5.1% a few years ago, and the UK already uses bargaining power to force drugs to be sold to the NHS at low prices. This situation makes it very difficult for smaller pharma companies to compete and raise money. While there are some success stories to be had, such as 1nhaler raising £2 million from angel and seed investors to develop their single-use sustainable inhaler, the fact that they have to seek out investment from individual investors rather than more typical sources is telling. The rules are changing and people are having to seek investment from the ever-increasing wealth of the 1%, likely because a lot of the money that governments and banks and private equity groups would have had before is being syphoned out by those people (and corruption) to pad the pockets of select individuals. When other companies are struggling for finance, however, this is often where larger ones swoop in. In the first five months of 2022, there was only $35.6bn spent on M&As, whereas in the first five months of this year, that figure rose to an impressive $85bn. This goes to show that crisis breeds opportunity, but, as is often the case, only for those with the largest war chests. The struggles of smaller companies to not only raise money but to compete for quality recruits is crippling them and may well be crippling innovation on a global scale. We don’t want to tie money to progress but it’s often the case that high demand draws talent, and there are worries that the financial pressures on the industry may cause investors to back out, which will mean less capital to throw at emerging diseases, potentially pushing back research against illnesses like cancer and heart disease and costing the lives of millions. Pharmaceutical research has never been cheap, but investors are looking for big returns, and with governments across the world imploding with their own dramas and petty squabbles – the Parthenon marbles, anyone? – it’s hard to say if this will get any better. The industry can only hope that cooler heads prevail. Pharma Business International 19 www.pbiforum.net FINANCE AND INVESTMENT © stock.adobe.com/Golden House ImagesNext >