< PreviousM&A ROUND-UP 10 Pharma Business International www.pbiforum.net several innovative drugs, the most important being Peloton’s lead candidate PT2977 for the treatment of renal cell carcinoma which is currently in late stage development. There’s also the financial savvy involved here, with Merck having struggled to complete several deals over the last few years. But with competition at high levels, Merck has seized the day to acquire a valuable asset that will likely put it in good stead for the future. The specifics of the deal will see Merck make an upfront payment of $1.05 billion via a subsidiary and, as per the agreement, Peloton shareholders are eligible to receive a further $1.15 billion dependent on future regulatory and sales milestone. As with the BMS/Celgene deal, this acquisition is slated to close in Q3. (Looks like next issue will be a busy one for the editorial team.) The last of this issue’s billion- dollar-plus deals is Catalent’s $1.2 billion acquisition of Baltimore, Maryland-based gene therapy specialist Paragon Bioservices. In announcing the deal in mid-April, Catalent said it would provide new expertise and capabilities in the fast- growing gene therapy field and help it secure long-term growth. The company joins major players including Roche who are muscling in on the booming cell and gene therapy field, diversifying their pipeline and capitalising on an important and rapidly growing industry. A market which, according to Allied Market Research, was worth $584 million in 2016, and is estimated to reach $4.4 billion by 2023. Below the billion-dollar threshold has yielded several important smaller deals for pharma companies. Novartis has bought IFM Tre, a subsidiary of Boston-based IFM Therapeutics (who was acquired by Bristol-Myers Squibb back in 2017), for $310 million. The deal gives Novartis full rights to IFM Tre’s portfolio of NLRP3 inhibitors which, Jay Brander, President of Novartis Institutes for Biomedical Research, says can offer a “potentially potent approach for treating a large variety of diseases associated with inflammation”. Towards the end of May, Amgen made a public cash offer for the shares of Danish biopharma Nuevolution in a deal worth $167 million. The offer breaks down to SEK 32.50 in cash for each share and does not include warrants issued by Nuevolution to participants under the incentive programmes it has implemented. According to a company release, Amgen may acquire or, indeed, enter into arrangements to acquire, shares in Nuevolution outside of the offer. Lastly this issue, we take a brief look at Evotec, a German drug discovery company looking to jump- start its biologics presence with the acquisition of Just Biotherapeutics (JustBio), a Seattle company founded in 2014. The deal includes potential performance-based earn- out components expected within the next three years. Of the deal, Evotec said it will add considerable business opportunities to accelerate its long-term strategy to be the industry partner of choice for external end-to-end innovation. Specifically, it grows the company’s offering to include biologics in therapeutic areas including oncology, inflammation and infectious diseases, among others. As has been witnessed in previous years, there’ll likely be a cooling off period in the middle of the year for the M&A market, with the number of new deals dropping. That’s not to say next issue will be a quiet one with the biggest deals of the year yet to close. 08-11.qxp_Layout 1 07/06/2019 12:58 Page 3Pharma Business International 11 www.pbiforum.net M&A ROUND-UP © Shutterstock /Juliua Sudnitskaya 08-11.qxp_Layout 1 07/06/2019 12:58 Page 4GASTROINTESTINAL DISEASE EXPOSÉ 12 Pharma Business International www.pbiforum.net The second brain With some forty per cent of the world’s population suffering from some kind of gastrointestinal disease, it’s clear that there’s a pressing medical need for new therapies and medications. With new research identifying the importance of the gut microbiome to health and wellbeing, new breakthroughs are just around the corner. 12-15.qxp_Layout 1 07/06/2019 12:59 Page 1Pharma Business International 13 www.pbiforum.net GASTROINTESTINAL DISEASE EXPOSÉ G astrointestinal disease is an umbrella term given to the myriad of ailments that affect that gastrointestinal tract, stomach, intestines, rectum and the auxiliary organs involved during digestion including the liver, gallbladder, pancreas and the appendix. In adults, the digestion system can be up to thirty feet in length and there’s a great many ways in which it can be affected by disease and illness. These range from common and, often, easily treated complaints such as acid reflux, gastroenteritis and stomach ulcers, to lifelong conditions like Crohn’s or celiac disease. Some can be solved with simple over the counter medications, others with a straightforward procedure such as an appendectomy or gallbladder removal, but many require patients to recalibrate their entire lives around an illness that could very well be with them the rest of their lives. A 2018 report found that overall annual healthcare expenditures for gastrointestinal diseases totalled $136 billion in the United States. That’s more than heart disease, trauma or mental health, all major healthcare concerns that one could be forgiven for thinking are responsible for more visits to GPs and hospitals. And yet, abdominal pain is the symptom most responsible for visits to the doctor’s and to emergency departments. Analysis from World Gastroenterology Organisation found that thirty-five to forty per cent of the world’s total population is suffering from an acute or chronic gastrointestinal complication. That same analysis found that by the end of 2024, the gastrointestinal drugs market is expected to reach £59.3 billion. Needless to say, the gastrointestinal disease market represents a major medical need, and a ripe research area for the pharmaceutical and life sciences 14 Á © Shutterstock /Natali_Mis 12-15.qxp_Layout 1 07/06/2019 12:59 Page 2GASTROINTESTINAL DISEASE EXPOSÉ 14 Pharma Business International www.pbiforum.net sectors. In one of the latest industry efforts, Takeda, Asia’s largest pharmaceutical company, and US venture capital firm Frazier Healthcare Partners have a formed brand-new biopharmaceutical company focussed on gastrointestinal diseases and disorders. Research should of course explore treatments to existing issues and improve quality of life for patients, particularly for those living with Crohn’s or irritable bowel syndrome. But more and more research is uncovering the links between gut health and overall health and wellbeing and exploring the link between the two. Understanding this could likely lead to important new discoveries and means of treating patients. Researchers at the University of Sydney have found that a common nanoparticle added to food products has a substantial and harmful influence on human health. Food additive E171 (titanium dioxide nanoparticles) is used as a whitening and brightening agent in hundreds of food products including chewing gum, mayonnaise, cake icing and white sauces. The danger is that nanoparticles can pass through the intestinal lining and, according to the researchers, impact gut health, contributing to inflammation in the colon which could trigger diseases such as inflammatory bowel disease and colorectal cancer. The additive is currently banned in Germany and, as of April this year, also in France, and now the European Commission is being called on to enact a ban across the bloc. It’s no exaggeration to say that the gut is vulnerable to the products we consume and that our gut microbiomes would be unrecognisable to our grandparents and their parents before them. A new hypothesis from a research team over at Kiel University in Germany has explored the evolutionary effect on the human microbiome. Their findings suggest that inflammatory diseases are caused by an over-supply of food and the associated disturbance of the intestine’s natural bacterial colonisation. They claim that an unnatural and particularly comprehensive nutrient supply decouples bacteria from their host organisms and, thus, destroys the delicate balance of the microbiome. These over-fed gut bacterial then promote disease development. The researchers say that their findings offer valuable approaches for further study and can potentially transfer to future treatments. To date, scientists have been preoccupied with looking for ways to correct a disturbed microbiome through external interventions such as probiotics or even faecal transplants. Now, this ecological-evolutionary perspective has added another dimension. Researchers can now incorporate the natural ability of the microbiome to readjust itself and to restore a healthy composition. Therefore, future research approaches lie in the specific mechanisms that balance the microbiome and ask whether this over-feeding of bacterial can be reduced by changed eating habits. Short of the brain, the digestive system is perhaps the most complicated part of the human body and now research is revealing that the two are more closely linked that we could have ever predicted. As well as opening new avenues of research to explore, it also means there’s potentially untapped possibilities for treating patients. 12-15.qxp_Layout 1 07/06/2019 12:59 Page 3Pharma Business International 15 www.pbiforum.net GASTROINTESTINAL DISEASE EXPOSÉ A little bit more about diseases mentioned in this article Gastroenteritis A common condition typically caused by a bacterial or viral stomach bug that results in diarrhoea and vomiting. It typically clears up by itself after about a week. Irritable bowel syndrome This long-term condition can cause bouts of stomach cramping, bloating, diarrhoea and/or constipation. It’s thought to affect up to one in five people at some point in their lives and usually develops between the ages of twenty and thirty. Though the exact cause remains a mystery, many experts believe it’s related to increased sensitivity of the gut and problems digesting food. Phycological factors such as stress are also thought to play a part. Crohn’s disease One type of condition under the inflammatory bowel disease umbrella, Crohn’s disease is a lifelong condition in which parts of the digestive system become inflamed. There’s no cure, but treatment can help reduce or control symptoms. Stomach ulcers There are two main causes behind stomach ulcers, the first being taking anti-inflammatory painkillers such as aspirin and ibuprofen in high doses or for a long time and, secondly, a common bacterial infection. Though it remains unclear why the bacteria only affect certain people. Contrary to popular belief, spicy food, alcohol and stress are not thought to result in stomach ulcers but may make existing ulcers worse. In any case, they are easily treated with medicine. Colorectal cancer It’s unknown exactly what causes bowel cancer, but there are several things which increase one’s risk – including a lack of exercise, a poor diet, smoking, alcohol and family history. Others might be at risk because of another condition, such as ulcerative colitis or Crohn’s. Surgery is usually the main treatment and may be combined with chemotherapy, radiotherapy or biological treatments. © Shutterstock /amab © Shutterstock /Rattiya Thongdumhyu © Shutterstock /Zetar Infinity © Shutterstock /Room’s Studio 12-15.qxp_Layout 1 07/06/2019 12:59 Page 4ALLERGIES 16 Pharma Business International www.pbiforum.net I t goes without saying that while allergies are bad for humankind, they are good for business – especially those in the business of selling allergy medication. Were allergies cured entirely, these avenues of revenue would be closed off entirely, and that is exactly what some specific industries are facing at this time thanks to allergy immunotherapy. Essentially like vaccines, immunotherapy revolves around a series of shots of an allergic substance over a period of three to five years, which can be used to stop allergic reactions. Immunotherapy can be used to protect and become immune to numerous allegories including, but not limited to, dogs, cats, insect stings, grass and even pollen. The market, as one might expect, is a powerful one. Research by Future Market Insights suggests that the allergy immunotherapy market could reach a value of more than $3.3 billion by the year 2025, and that it will have a CAGR of over 10%. Europe is expected to account for the largest demand in this, but it should be noted that the US could also become a prominent market, with the Centers for Disease Control and Prevention (CDC) suggesting that over 50 million Americans suffer from allergic reactions each year, and that by 2025 almost 50% of the population will suffer from allergic diseases. Allergies no more The allergies market has always been a profitable one for the pharma industry, but allergy immunotherapy may well be the silver bullet that patients, but not the pharma giants, want. 18 Á © Shutterstock /Elisa Manzati 16-19.qxp_Layout 1 07/06/2019 13:00 Page 1Pharma Business International 17 www.pbiforum.net ALLERGIES © Shutterstock /Robert Kneschke 16-19.qxp_Layout 1 07/06/2019 13:00 Page 2ALLERGIES 18 Pharma Business International www.pbiforum.net These startling figures suggest an allergy crisis in the future, one that may well have been caused by our reliance on solving the symptoms of allergies and not the cause. With allergy immunotherapy set to make a splash on the world stage, that may soon change. Pharmaceutical companies would be wise to cash in on the market early and secure patents where possible. Given the rate of acquisitions in recent years, it’s safe to say those companies who develop such treatments may be experiencing sudden interest from pharma giants. While allergy immunotherapy may take some time to take off – and more time to convince certain political groups and conspiracy theorists in the US – it’s certain to be one of the more powerful industries in coming years and may well have a knock-on effect on other sectors. A study recently found that up to 93% of over-the-counter medicines could contain allergenic ingredients, be they to increase absorption of the medicine into the body, taste, texture or other factors of the parent drug. If immunotherapy can end certain allergens in the same way the MMR virus ended (or very nearly ended) certain diseases, then pharmaceutical companies may have more resources open to them when it comes to what they can and can’t include in their drugs. The future is bright, and possibly one involving less sneezing. The Centers for Disease Control and Prevention (CDC) suggest that over 50 million Americans suffer from allergic reactions each year 16-19.qxp_Layout 1 07/06/2019 13:00 Page 3Pharma Business International 19 www.pbiforum.net ALLERGIES © Shutterstock /Tero Vesalainen 16-19.qxp_Layout 1 07/06/2019 13:00 Page 4Next >