Teva makes its first M&A play in years, buying Emalex

 After a hiatus of almost a decade, Teva has made a pipeline-building acquisition, buying Emalex Biosciences and its candidate therapy for Tourette's syndrome for up to $900 million.

The deal – which includes an upfront payment of $700 million – focuses on selective dopamine D1 receptor antagonist ecopipam, which already has positive phase 3 data in hand in children with Tourette's and is being prepared for a US marketing application in the second half of this year.

Teva's last acquisition, completed in August 2016, was the $40.5 billion mega-merger with Actavis, part of a wave of consolidation that swept through the generics industry at that time. That has been widely perceived as a poor deal, exacerbated by forced divestments to meet antitrust regulatory demands, which hampered the company's growth for years as pricing pressure ramped up in the generics sector, and resulted in a massive restructuring drive.

In the last couple of years, under new chief executive Richard Francis (formerly the boss at Sandoz), Teva has shown signs of a return to its former strength, fuelled by a greater emphasis on innovative, branded medicines like Huntington's disease therapy Austedo (deutetrabenazine).

Dipping its toe in the M&A water once again reflects that growing confidence, and shares in the company rose just under 12% after the announcement. The announcement came alongside a 2% increase in first-quarter revenues to $4 billion, driven by a 41% hike in Austedo sales to $578 million.

Teva said that ecopipam has first-in-class potential in Tourette's, a neurological disorder characterised by involuntary tics and verbal outbursts. Current treatments, such as Otsuka/Lundbeck's Abilify (aripiprazole), target dopamine D2 receptors and often lack efficacy and/or have tolerability issues, and less than a third of patients remain on therapy for a year or more.

Analysts at Jefferies have suggested that ecopipam could eventually reach $1 billion in peak sales.

Francis said buying Emalex is "a prime example of our 'pivot to growth' strategy in action, advancing focused, capital-efficient agreements that expand our late-stage innovative pipeline and commercial portfolio, while delivering on our unrelenting commitment to patients."

In its phase 3 trial, ecopipam achieved a statistically significant reduction in vocal and motor tics compared to placebo, while patients taking the D1 antagonist were less likely to relapse over 24 weeks of follow-up. By the end of the trial, 42% of ecopipam-treated patients had relapsed, compared to 68% of subjects in the control group.

https://pharmaphorum.com/news/teva-makes-its-first-ma-play-years-buying-emalex