Emerging Pharma: Top Moves Thus Far in 2022

Emerging Pharma companies are important as drug-development partners with larger bio/pharma companies and represent an important customer base for CDMOs/CMOs. Which companies and their deals have stood out this far in 2022?

Emerging Pharma companies are key as drug-development partners with larger bio/pharma companies and as a customer base for CDMOs/CMOs. Which companies and their deals have stood out this far in 2022?

Key deals thus far in 2022: partnering and M&A
Which moves, partnering deals and mergers and acquisitions (M&A), stand out between Emerging Pharma companies and larger bio/pharmaceutical companies thus far in 2022? A roundup of some key moves is highlighted below. Note: partnering deals reflect total deal values (upfront payments and potential milestone payments), and acquisitions represent acquisition prices, inclusive of contingent/milestone payments, if applicable.

Sanofi’s $5.3-billion AI-driven small-molecule drug pact with Exscientia. In January (January 2022), Sanofi and Exscientia, an Oxford, UK-based artificial intelligence (AI)-based drug development company, entered into a research collaboration and license agreement to develop up to 15 small molecule candidates across oncology and immunology, in a deal worth up to $5.3 billion ($100 million upfront and up to $5.2 billion in milestones).

The companies have been working together since 2016. In 2019, Sanofi in-licensed Exscientia’s bispecific small-molecule candidate capable of targeting two distinct targets in inflammation and immunology.

Under the agreement, Exscientia received an upfront cash payment of $100 million from Sanofi and will be eligible to receive future research, translational, clinical development, regulatory and commercial milestone payments of up to approximately $5.2 billion in aggregate, if all milestones for all programs are achieved. In the case that Sanofi commercializes a therapeutic from the collaboration, Exscientia will also be eligible to receive tiered royalties on product sales ranging from high-single-digits to mid-teens and an option for clinical co-investment to increase the royalty rate up to 21% on net sales of co-funded products.

BMS’ pending $4.1-billion acquisition of Turning Point Therapeutics. In June (June 2022), Bristol-Myers Squibb (BMS) agreed to acquire Turning Point Therapeutics, a San Diego, California-based clinical-stage bio/pharmaceutical company focused on oncology, for $4.1 billion.

Turning Point Therapeutics has a pipeline of investigational medicines designed to target the most common mutations associated with oncogenesis or the development of tumors. The company’s lead asset, repotrectinib, is a tyrosine kinase inhibitor targeting the ROS1 and NTRK oncogenic drivers of non-small cell lung cancer (NSCLC) and other advanced solid tumors. Repotrectinib has three breakthrough therapy designations from the US Food and Drug Administration (FDA). BMS expects repotrectinib to be approved in the US in the second half of 2023 and become a new standard of care for patients with ROS1-positive NSCLC in a first-line setting.

The deal is expected to close during the third quarter of 2022.

Amgen’s pending $3.7-billion acquisition of ChemoCentryx. Earlier this week (August 4, 2022), Amgen agreed to acquire ChemoCentryx, a San Carlos, California-based bio/pharmaceutical company developing oral drugs to treat autoimmune diseases, inflammatory disorders, and cancer, primarily for orphan and rare diseases, for approximately $3.7 billion.

ChemoCentryx is focused on the discovery, development, and commercialization of small-molecule therapeutics that target the chemoattractant system. Discrete chemokine or chemoattractant receptors play a specific role in how certain diseases progress. Each of its drug candidates focuses on a specific chemokine or chemoattractant receptor that blocks the negative inflammatory or suppressive response driven by that particular receptor while leaving the rest of the immune system intact.

ChemoCentryx has one commercial product, Tavneos (avacopan), a drug to treat anti-neutrophil cytoplasmic autoantibody-associated vasculitis, an umbrella term for a group of multi-system autoimmune diseases with small-vessel inflammation. It was approved by the FDA in October 2021. US sales of Tavneos in the first quarter of 2022 were $5.4 million. In addition to Tavneos, ChemoCentryx has three early-stage drug candidates that target chemoattractant receptors in other inflammatory diseases and an oral checkpoint inhibitor for cancer.

The deal is expected to close in the fourth quarter of 2022.

GSK’s pending $3.3-billion acquisition of Affinivax. In May (May 2022), GlaxoSmithKline (GSK) agreed to acquire Affinivax, a Cambridge, Massachusetts-based bio/pharmaceutical company developing vaccines, in a $3.3-billion deal ($2.1 billion upfront and up to $1.2 billion in potential development milestones).

Affinivax’s most advanced vaccines are pneumococcal vaccines for which it applies its proprietary vaccine technology platform, Multiple Antigen Presenting System (MAPS). MAPS supports higher valency than conventional conjugation technologies to enable broader coverage against prevalent pneumococcal serotypes and potentially creating higher immunogenicity than current vaccines.

Affinivax’s most advanced vaccine candidate, AFX3772, is in Phase II development and includes 24 pneumococcal polysaccharides plus two conserved pneumococcal proteins (compared to up to 20 serotypes in currently approved vaccines). The FDA granted breakthrough therapy designation for AFX3772 to prevent Streptococcus pneumoniae invasive disease and pneumonia in adults 50 years old and above. Phase III trials are expected to start in the short term (as reported on May 31, 2022). Phase I/II clinical trials for pediatric use are planned to begin later this year (2022). A 30-plus valent pneumococcal vaccine candidate is also in preclinical development.

The acquisition is expected to close in the third quarter of 2022.

GSK’s $1.9-billion acquisition of Sierra Oncology. Last month (July 2022), GlaxoSmithKline (GSK) completed its $1.9-billion acquisition of Sierra Oncology, a San Mateo, California-based late-stage bio/pharmaceutical company focused on rare forms of cancer.

Sierra Oncology’s lead asset is momelotinib, in Phase III trials for treating myelofibrosis, a cancer of the bone marrow impacting the normal production of blood cells, resulting in anemia. If approved, the companies anticipate launch of the product in the US in 2023. Momelotinib increases GSK’s hematology portfolio, which includes Blenrep (belantamab mafodotin) for treating a certain type of multiple myeloma. 

UCB’s $1.9-billion acquisition of Zogenix. In June (June 2022), UCB acquired Zogenix, an Emeryville, California-based bio/pharmaceutical company developing therapies for rare diseases, for approximately $1.9 billion. Zogenix’s only commercial product is Fintepla (fenfluramine), approved for treating seizures associated with Dravet syndrome, a rare form of epilepsy, and with potential in other seizure disorders, including Lennox-Gastaut syndrome, a type of epilepsy.

Amgen’s $1.9-billion research pact with Generate Biomedicines. In January (January 2022), Amgen and Generate Biomedicines, a company using machine learning and artificial intelligence (AI) to program protein therapeutics, entered into a $1.9-billion pact to discover and create protein therapeutics for five clinical targets across several therapeutic areas and multiple modalities.

Amgen will pay Generate Biomedicines $50 million in upfront funding for the initial five programs with a potential transaction value of $1.9 billion, plus future royalties, and will have the option to nominate up to five additional programs at additional cost. For each program, Amgen will pay up to $370 million in future milestones and royalties up to low double digits.

Lilly’s $1.7-billion ADC pact with ImmunoGen. In February (February 2022), Eli Lilly and Company and ImmunoGen, a Waltham, Massachusetts-based bio/pharmaceutical company, formed a multiyear licensing agreement to research, develop, and commercialize antibody-drug conjugates (ADCs), in a deal worth up to $1.7 billion.

The deal involves targets selected by Lilly using Immunogen’s camptothecin linker-payloads. Camptothecins are a class of anticancer drugs targeting Type I topoisomerase, which are enzymes that cut one of the two strands of double-stranded DNA, relax the strand, and re-anneal the strand.

Lilly will pay ImmunoGen an upfront payment of $13 million, reflecting initial targets selected by Lilly. Lilly may select a pre-specified number of additional targets, with ImmunoGen eligible to receive an additional $32.5 million in exercise fees if Lilly licenses the full number of targets. ImmunoGen is eligible to receive up to $1.7 billion in potential target program exercise fees and milestone payments based on the achievement of pre-specified development, regulatory, and commercial milestones. ImmunoGen is also eligible for tiered royalties as a percentage of global commercial sales by Lilly. Lilly is responsible for all costs associated with research and development.

Ipsen’s $1.6-billion partnering deal with Marengo Therapeutics. Earlier this month (August 2022), Ispen,a Paris-based bio/pharmaceutical company, and Marengo Therapeutics, a Cambridge, Massachusetts-based bio/pharmaceutical company, formed a partnership to advance two of Marengo’s preclinical immuno-oncology drug candidates, in a deal worth up to $1.6 billion ($45 million upfront and up to $1.592 billion in milestone payments).

Margengo has a proprietary T cell activation platform, Selective T Cell Activation Repertoire (STAR), which encompasses of understanding of T cell function and receptor signaling for developing advanced therapies for cancer. Under the agreement, Marengo will lead the preclinical development efforts and will expense related costs until the submission of an investigational new drug application to the US Food and Drug Administration. Ipsen will assume responsibilities for clinical development and commercialization.

Ipsen will make an upfront payment of $45 million, together with potential payments up to a total of $1.592 billion if all milestones are met in addition to tiered sales royalty payments.

AstraZeneca’s $1.57-billion “undruggable” drug pact with Scorpion Therapeutics. In January (January 2022), AstraZeneca and Scorpion Therapeutics, a Boston-based oncology-focused drug company, formed a pact to discover, develop, and commercialize precision medicines against previously hard-to-target cancer proteins, in a deal worth up to $1.57 billion ($75 million upfront and up to $1.5 billion in milestones).

The collaboration focuses on a class of proteins called transcription factors, which control gene expression and can regulate cellular processes, including cell growth and survival. Many transcription factors have been identified as targets for new cancer treatments and drivers of disease, but have historically been considered “undruggable” using conventional drug-discovery approaches.

Under the collaboration, Scorpion will lead discovery and certain preclinical activities. AstraZeneca has the exclusive option to license global rights for up to three drug candidates. AstraZeneca would be responsible for development and commercialization activities globally following opt-in while Scorpion would retain the option to co-develop and co-promote up to two of these programs in the US under certain conditions, including if AstraZeneca exercises three license options.

Scorpion received an upfront cash payment of $75 million and is eligible to receive up to an additional $1.5 billion in the form of option fees and milestone payments as well as tiered royalties on net sales ranging from mid-single digit to low-double digits. In the event Scorpion opts-in to co-developing and co-promoting a nominated program, Scorpion will participate in the operating costs and be entitled to a proportionate share of the economics in the US, subject to certain adjustments.

Novartis’ $1.5-billion acquisition of Gyroscope. In February (February 2022), Novartis completed its acquisition of Gyroscope Therapeutics, a London-based ocular gene-therapy company, in a $1.5-billion deal ($800 million upfront and up to $700 million in milestone payments).

Through the acquisition, Novartis adds GT005, an investigational, a one-time gene therapy currently in Phase II for treating geographic atrophy, an advanced form of dry age-related macular degeneration. Gyroscope also has several additional assets in its pipeline in early discovery for retinal diseases.

Astellas’ $1.36-billion ADC deal with Sutro Biopharma. In June (June 2022), Astellas and Sutro Biopharma, a San Francisco, California-based biopharmaceutical company, formed a strategic collaboration and licensing agreement for the discovery and development of immunostimulatory antibody-drug conjugates (iADCs) in a deal worth up to $1.36 billion ($90 million upfront plus up to $422.5 million in milestones for each target, up to three targets). 

iADCs are dually conjugated with an immunostimulant and a cytotoxin. The dual conjugation incorporates a cytotoxin that can directly kill tumor cells together with an immunostimulatory component that has the potential to locally prime an immune response to a patient’s particular tumor cells. They are designed to treat so-called “cold tumors,” referring to a tumor that is not likely to trigger a strong immune response and are targeted for patients who are not responsive to immunotherapies.

Under the agreement, Sutro will receive an upfront cash payment of $90 million to develop iADCs for three biological targets and may be eligible to receive up to $422.5 million in development, regulatory, and commercial milestones for each product candidate, and tiered royalties ranging from low double-digit to mid-teens on worldwide sales of any commercial products that may result from the collaboration, subject to Sutro’s cost- and profit-sharing option for the US. Sutro has the option to share in the costs and profits for developing and commercializing product candidates in the US. If Sutro exercises this option for a particular product candidate, Astellas and Sutro will equally share the costs of such co-development and co-commercialization, with the resulting profits/losses from co-commercialization also shared equally in the US.

Pfizer’s $1.35-billion rare-disease pact with Beam Therapeutics. In January (January 2022), Pfizer and Beam Therapeutics, a Cambridge, Massachusetts-based bio/pharma company developing precision genetic medicines through base editing, entered into an exclusive four-year research collaboration for rare genetic diseases in a deal worth up to $1.35-billion ($350 million upfront and up to $1.05 billion in milestone payments).

The base editing programs will use Beam’s in-vivo delivery technologies, which use messenger RNA and lipid nanoparticles to deliver base editors to target organs. The pact is focused on rare genetic diseases of the liver, muscles, and central nervous system. Beam’s proprietary base editing technologies are designed to target a single base in the genome without making a double-stranded break in the DNA. This approach aims to create a more precise and efficient edit compared to traditional gene-editing methods, which operate by creating targeted double-stranded breaks in the DNA, resulting in potential challenges associated with unwanted DNA modifications.

Under the collaboration, Beam will conduct all research activities through development candidate selection for three undisclosed targets, which are not included in Beam’s existing programs. Pfizer may opt in to exclusive, global licenses for each development candidate, after which, it will be responsible for all development activities as well as potential regulatory approvals and commercialization for each such candidate. Beam has a right to opt in, at the end of Phase I/II studies, into a global co-development and co-commercialization agreement for one program. For that program, Pfizer and Beam would share net profits as well as development and commercialization costs in a 65%/35% ratio (Pfizer/Beam).

Beam will receive an upfront payment of $300 million and, assuming Pfizer exercises its opt-in license rights for all three targets, is eligible for development, regulatory and commercial milestone payments for potential total deal consideration of up to $1.35 billion. Beam is also eligible to receive royalties on global net sales for each licensed program. The collaboration has an initial term of four years and may be extended up to one additional year.

AstraZeneca’s pending $1.3-billion acquisition of TeneoTwo. Last month (July 2022), AstraZeneca agreed to acquire TeneoTwo, a bio/pharmaceutical company, in a deal worth up to $1.3 billion ($100 million upfront, up to $805 million in additional contingent R&D-related milestone payments, and up to $360 million in additional contingent commercial-related milestone payments).

TeneoTwo’s key asset is TNB-486, currently in Phase I development for treating relapsed and refractory B-cell non-Hodgkin lymphoma. TNB-486 belongs to a class of therapeutic antibodies known as T-cell engagers, which are emerging as a promising therapeutic approach in hematologic malignancies and solid tumors. T-cell engagers are bispecific molecules that are engineered to redirect the immune system’s T-cells to recognize and kill cancer cells. By binding to both CD19, an antigen expressed on B-cells, and to the CD3 receptor on T-cells, TNB-486 activates and recruits T-cells to CD19-expressing tumors where they can elicit an immune response, according to information from AstraZeneca. The acquisition adds to AstraZeneca’s position in developing drugs to treat blood cancers, including B-cell hematologic malignancies, including diffuse large B-cell lymphoma and follicular lymphoma.

The deal is expected to close in the third quarter of 2022.

Sanofi’s $1.2-billion acquisition of Amunix. In February (February 2022), Sanofi completed its acquisition of Amunix Pharmaceuticals, an immuno-oncology company, in a deal worth up to $1.2-billion ($1 billion at closing plus $225 million in milestones)

Amunix is developing masked T cell engagers (TCE) and cytokines, which are designed to preferentially activate in the tumor microenvironment and to overcome toxicity challenges of other T cell and cytokine therapies. The company’s initial product candidate is AMX-818, a T cell engager targeting a variety of HER2-expressing solid tumors.

Bayer’s $1.04-Bn CRISPR Pact with Mammoth Biosciences. In January (January 2022), Bayer and Mammoth Biosciences, a San Francisco-based developer of a CRISPR-based disease detection platform, entered into a pact, worth up to $1.04 billion ($40 million upfront and up to $1 billion in milestone payments), to develop in vivo gene-editing therapies using Mammoth’s CRISPR systems.

Under the agreement, Mammoth Biosciences will receive an upfront payment of $40 million and is eligible to receive target option exercise fees as well as potential future payments of more than $1 billion upon successful achievement of certain research, development, and commercial milestones across five preselected in-vivo indications with a first focus on liver-targeted diseases. In addition, Bayer will pay research funding and tiered royalties up to low double-digit percentage of net sales. The companies are also exploring work on ex-vivo projects on a nonexclusive basis.

AbbVie’s $1-billion acquisition of Syndesi Therapeutics. To enhance its neuroscience portfolio, in March (March 2022), AbbVie acquired Syndesi Therapeutics, a Belgium-based bio/pharmaceutical company, in a $1-billion deal ($130 million upfront and up to $870 million in milestone payments).

Syndesi is focused on developing therapeutics that modulate synaptic function to relieve the symptoms of cognitive impairment. Syndesi’s molecules act pre-synaptically to enhance synaptic efficiency by positively modulating the function of the synaptic vesicle protein 2A (SV2A), which plays a role in regulating neurotransmission. The acquisition gives AbbVie access to Syndesi’s portfolio of modulators of SV2A, including Syndesi’s lead molecule, SDI-118, a small molecule currently in Phase Ib studies, which is being evaluated to target nerve terminals to enhance synaptic efficiency. Synaptic dysfunction is believed to underlie the cognitive impairment seen in multiple neuropsychiatric and neurodegenerative disorders

Roche’s $1-billion gene-therapy pact with Avista Therapeutics. Earlier this year (2022), Roche partnered with Avista Therapeutics, a Pittsburgh, Pennsylvania-based bio/pharmaceutical company focused on gene therapies, to develop adeno-associated virus (AAV) gene-therapy vectors for ocular diseases in a deal worth up to $1 billion ($7.5 million upfront and up to $1 billion in milestone payments and royalties). The partnership aims to apply Avista’s single-cell AAV engineering platform technology to develop intravitreal AAV capsids matching a capsid profile defined by Roche. Under the agreement, Roche has the right to evaluate and license capsids from Avista and will be responsible for conducting preclinical, clinical, and commercialization activities for gene-therapy programs using these capsids.

J&J’s $1-billion ADC pact with Mersana. In February (February 2022), Janssen Biotech, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, and Mersana Therapeutics, a bio/pharmaceutical company focused on developing antibody-drug conjugates (ADCs) targeting cancers, entered into a research collaboration and license agreement to discover ADCs for three targets, in a deal worth up to $1 billion ($40 million upfront).

Under the agreement, Janssen will provide proprietary antibodies for three targets. Mersana will apply its proprietary ADC platform to discover novel ADC product candidates. Mersana may use Synaffix’s GlycoConnect technology as its preferred site-specific ADC bioconjugation technology. Mersana says it will collaborate with Janssen on target candidates during preclinical development, with Janssen being solely responsible for clinical development and commercialization.

Mersana received an upfront payment of $40 million. Mersana is eligible to receive reimbursement of certain costs as well as more than $1 billion in potential milestone payments, plus mid-single-digit to low double-digit percentage royalties on worldwide net sales of ADCs against the selected targets.

Astellas’ $784-million immuno-oncology pact with GO Therapeutics. In June (June 2022), Astellas, through its subsidiary, Xyphos Biosciences, entered into a strategic research collaboration and license agreement with GO Therapeutics, a Cambridge, Massachusetts-based bio/pharmaceutical company, to develop immuno-oncology therapeutics, in a deal worth up to $784 million ($20.5 million upfront and $763 million in milestone and contingency payments). 

GO Therapeutics is applying advances in glycoproteomics to develop antibody-based cancer therapeutics. Astellas’ Xyphos Biosciences has a proprietary technology platform, Accel, which uses convertible chimeric antigen receptors on immune cells. The two companies will collaborate exclusively to identify antibodies with high affinity to two different glycoprotein targets and apply these antibodies to a range of therapeutic modalities. GO Therapeutics will lead the collaboration to discover high-affinity antibodies against the two targets, and Astellas will be responsible for research activities, clinical development, and commercialization of the therapeutics derived from the antibodies provided by GO Therapeutics. 

AstraZeneca’s $760-million cardiovascular drug pact with Neurimmune. In March (March 2022), Alexion, AstraZeneca’s Rare Disease Group, entered into a global collaboration and license agreement, worth up to $760-million ($30 million upfront and $730 million in milestones) with Neurimmune, a Zurich, Switzerland-based bio/pharmaceutical company, for NI006, an investigational human monoclonal antibody, currently in Phase Ib development for transthyretin amyloid cardiomyopathy, a fatal condition resulting from progressive heart failure.

Under the agreement, Alexion gained an exclusive global license to develop, manufacture, and commercialize NI006. Alexion pays Neurimmune an upfront payment of $30 million with the potential for additional contingent milestone payments of up to $730 million upon achievement of certain development, regulatory, and commercial milestones as well as low-to-mid teen royalties on net sales of any approved medicine resulting from the collaboration.

Neurimmune continues to be responsible for completion of the current Phase Ib clinical trial on behalf of Alexion, and Alexion will pay certain trial costs. Alexion will be responsible for further clinical development, manufacturing and commercialization.

Pfizer’s $525-million acquisition of ReViral. In June (June 2022), Pfizer acquired ReViral, a Stevenage, Hertfordshire, UK-based-clinical-stage bio/pharmaceutical company focused on antiviral therapeutics for respiratory syncytial virus (RSV), for $525 million.

ReViral’s lead asset is sisunatovir, an orally administered inhibitor designed to block fusion of the RSV virus to the host cell. The drug has been granted fast-track designation by the FDA. It is in Phase II development in adults and infants. A second program for sisunatovir is focused on the inhibition of RSV replication targeting the viral N protein. The lead candidate in that program is in Phase I development. If successful, Pfizer says it believes annual revenue for these programs has the potential to reach or exceed $1.5 billion.

Gilead Sciences’ pending $405-million acquisition of MiroBio. Earlier this week (August 2, 2022), Gilead Sciences agreed to acquire MiroBio, an Oxford, UK-based bio/pharmaceutical company, for approximately $405 million. MiroBio is focused on developing therapeutics that restore immune balance with agonists targeting immune inhibitory receptors. The company has a proprietary drug-discovery platform, I-ReSToRE, to assess these receptors’ roles in immunity and their potential as therapeutic targets for immune-mediated diseases. The acquisition will provide Gilead with MiroBio’s proprietary discovery platform and portfolio of immune inhibitory receptor agonists.

MiroBio’s lead investigational antibody, MB272, is in Phase I development and targets T, B, and dendritic cells to inhibit or blunt activation and suppress an inflammatory immune response. Gilead says it anticipates advancing additional agonists derived from MiroBio’s I-ReSToRE platform, including a PD-1 agonist, MB151, and other undisclosed early-stage programs, over the next several years (as reported on August 4, 2022).

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