Pharma deal values plummet 56% as COVID-19 disrupts resources

Over the last few years, Big Pharma executives were more than willing to lay out multiple billions of dollars to acquire companies that could help them pump up their pipelines. Then COVID-19 hit, and suddenly dealmaking became a much different game.

That phenomenon is reflected in eye-popping statistics that PwC released Wednesday. Between the second half of 2019 and the first half of this year, deal values dropped 56% in pharma to $7.7 billion and 74% in biotech to $12.6 billion. Year-over-year comparisons were even more striking, given that deal value in the first half of 2019 in pharma and biotech reached $100.1 billion and $137.4 billion, respectively.

The COVID-19 pandemic has had a wide-ranging impact on mergers and acquisitions in the biopharma sector. Several companies have changed course in an effort to develop drugs and vaccines to treat the virus—redirecting resources that might otherwise have been used for M&A. At the same time, the shutdowns disrupted supply chains, forcing companies to rethink methods for deploying capital.

“Whether they’re focusing on vaccine development or prioritizing a pivot in their supply chain, these companies are having to redirect resources,” Karen Young, U.S. pharmaceutical and life science assurance leader for PwC, said. “So looking for new sources of innovation and new opportunities [for deals] has stalled a bit.”

Were it not for COVID-19, the ingredients necessary to drive biopharma deals would have been firmly in place, Young said. Private equity firms have plenty of “dry powder” to deploy toward megadeals. And Big pharma companies are looking to divest non-core assets, and to use the cash they gain to bring in assets that boost their core competencies.

In fact, several companies seemed as if they were headed in that direction at the start of the year. Eli Lilly paid $1.1 billion for Dermira in January, but then dealmaking in Big Pharma all but shut down. In fact, there were no major deals in the sector after that until March, when Takeda shed 18 over-the-counter drugs to Hypera for $825 million.

Biotech saw one mega deal in early March—Gilead’s $4.9 billion purchase of cancer drugmaker Forty Seven. Novo Nordisk picked up Corvidia for $2.1 billion and Alexion laid out $1.8 billion for Portola. Nevertheless, the total value of biotech deals was flat from the first to the second quarter—and the lowest it’s been since the second quarter of 2017.

Even though the pandemic isn’t easing up as rapidly as everyone hoped it would, PwC analysts predict M&A activity will pick up in the second half of the year, particularly in oncology and gene and cell therapy, Young said. “Biotech continues to be a hot market. And companies are looking for those smaller tuck-in acquisitions that are often more digestible at an uncertain time,” she said.

It helps that venture capitalists and public-market investors continue to invest heavily in biopharma assets in spite of the pandemic. This year is on track to set a record for investments in biopharma, according to a new report (PDF) from Silicon Valley Bank. In fact, there have already been 26 financings of $100 million or more.

PwC predicts that M&A valuations will be rich, particularly in competitive areas like oncology. Gilead may have turned heads when it paid 96% more than Forty Seven’s share price to get ahold of its anti-CD47 antibody magrolimab, which is being developed to treat some forms of blood cancer, but it won’t be the last to devote that high a premium to the right asset. “Everybody is looking to be part of the oncology market, so certainly we’re going to see high values associated with new, innovative platforms,” Young said.

There are still some obstacles that could keep dealmakers on the sidelines, at least temporarily, Young warned. Capital could be scarce depending on the course of COVID-19 and other unknowns. “Are we really getting closer to re-emerging after the pandemic? Plus we’re in an election year, which could cause a bit of a pause,” she said.

But the underlying strength of the biopharma market portends a quick return to dealmaking, Young said. “I don’t think business development organizations are sitting idle. I think everybody had deals they were looking at pre-COVID. And they’re certainly going to watch them during this intervening period.”

https://www.fiercepharma.com/pharma/pharma-deal-values-plummet-56-first-half-as-covid-19-disrupts-resources-report

A Guide to Coronavirus Vaccines in the Works

Researchers around the world have been racing to develop vaccines that can fight off the coronavirus. Now, a handful are starting the final stage of testing, or will soon. Depending on the results, some companies say their vaccines could be greenlighted for use as soon as this year. Here’s a look at some things to know:

Q: Is there a vaccine for the new coronavirus?

A: Not yet. Only in January did researchers investigating a mystery illness sickening people in Wuhan, China, confirm it was caused by a new coronavirus, and it took weeks more before the pathogen emerged as a global health threat. It usually takes drugmakers years to research and test vaccines. Several Covid-19 vaccines moved into human trials within months. The progress is remarkably rapid. Nevertheless, researchers need to conduct bigger studies to make sure their promising candidates really are safe and protect against the virus, and give regulators the data needed to determine whether to authorize use.

Q: Why is a coronavirus vaccine important?

A: The new coronavirus has infected millions of people world-wide, killing hundreds of thousands. Though the virus isn’t as deadly as other pathogens like Ebola, it spreads more easily. Testing, social distancing and wearing masks can help reduce the risks of transmission, health authorities say, and drugs could help treat people who develop Covid-19, the disease caused by the coronavirus. Yet, vaccines are needed to both protect an individual from getting very sick and to limit the spread of the virus. Without a vaccine, life can’t return to normal.

Q: What progress is being made?

A: More than 20 vaccine candidates are in human testing, and another 140 are in development, according to the World Health Organization. Researchers have begun reporting results from early-stage studies for the most advanced coronavirus vaccine candidates. The results were positive, indicating the vaccines appeared safe and produced an immune response. The trials also helped researchers pinpoint the best doses for their coronavirus vaccines.

Q: When would a vaccine become available?

A: The results from early-stage studies aren’t enough to allow widespread use. Late-stage trials, testing the shots in tens of thousands of people, are now getting under way to confirm the candidates are safe and prove they reduce the severity of disease and even prevent infection. If the vaccine candidates succeed in these so-called phase 3 trials, health regulators are expected to allow use. Developers of the most-advanced vaccine candidates say the authorizations could come as early as the fall. But that doesn’t mean everyone would get a shot right away. Initial supplies would probably go to people who need it most, like doctors, nurses and emergency responders, and essential workers at groceries, pharmacies and mass-transit agencies. The vaccines may not become widely available until next year.

Q: How do the vaccines work?

A: All vaccines work by training a person’s immune system to fight off a virus or bacteria, without causing a serious illness. How the shots accomplish that varies, however. Coronavirus vaccine researchers are using various technologies. Some shots are designed to use a safe version of a virus causing a common cold to deliver the Covid-19 fighting lessons. For example, the vaccine under development by the University of Oxford and AstraZeneca PLC uses the cold virus to deliver a weakened piece of the new coronavirus to teach the body to attack the pathogen. Differently, vaccines under development by Moderna Inc. and by a partnership between Pfizer Inc. and BioNTech SE rely on a gene-based technology to deliver their Covid-19 fighting lesson. These vaccines are designed to deliver a piece of genetic code, known as messenger RNA, or mRNA, carrying the coronavirus-fighting instructions to cells. Researchers hope people will need only one shot, but it looks like some vaccines may require another shot, known as a booster, to sufficiently build up a person’s defenses.

Q: Who would need to get one?

A: As many people as possible. Vaccination can do more than just protect an individual against the coronavirus. The risk of transmission could drop for everyone, health experts say, if enough people get vaccinated. This is known as herd immunity. Researchers aren’t certain what percent of people would need to get coronavirus vaccines for there to be herd immunity. Many estimate, based on their understanding of the coronavirus, 60% to 70% of the population would need to be immune.

https://www.marketscreener.com/ASTRAZENECA-PLC-4000930/news/A-Guide-to-Coronavirus-Vaccines-in-the-Works-30984262/

Baxter teams up with Vipun Medical to commercialize gastric monitoring system

Baxter International (NYSE:BAX) has agreed to collaborate with Boortmeerbeek, Belgium-based VIPUN Medical to commercialize the VIPUN Gastric Monitoring System, a device featuring a “smart” enteral feeding tube designed to measure stomach motility thereby enabling clinicians to identify intolerance to enteral feeding and make better nutritional therapy decisions in ICU and other settings.

Under the terms of the partnership, BAX will support clinical studies supporting regulatory approval in key global markets and will have worldwide distribution rights. Financial terms are not disclosed.

https://seekingalpha.com/news/3594766-baxter-teams-up-vipun-medial-to-commercialize-gastric-monitoring-system

Sarepta gene therapy Fast Track’d for Duchenne muscular dystrophy

July 24, 2020

The FDA designates Sarepta Therapeutics’ (NASDAQ:SRPT) gene transfer therapy SRP-9001 for Fast Track review for the treatment of Duchenne muscular dystrophy (DMD), an Orphan Drug and Rare Pediatric Disease-tagged indication.

Fast Track status provides for more frequent interaction with the FDA review team and a rolling review of the marketing application.

https://seekingalpha.com/news/3594777-sarepta-gene-therapy-fast-trackd-for-duchenne-muscular-dystrophy

Glendale, Cal. OKs up to $2,000 fine for those not wearing face masks in public

People in Glendale must wear a face covering in public or they will face a steep fine, beginning with the first offense, officials announced this week.

The Glendale City Council on Tuesday affirmed the imposition of fines for those who do not comply with the city’s public order, which was originally issued on April 10, to wear a face covering when outside of their household and in public.

In a statement, officials said Glendale “continues to take an aggressive approach to the fight against COVID-19 by enacting strict measures for the use of facial coverings.”

Under the new order, the first offense will result in a $400 fine, the second a $1,000 fine and $2,000 for a third offense. The fines are the same for businesses.

Glendale businesses are allowed to refuse service to anyone who does not wear a face covering or who fails to comply with social distancing. Businesses must also take all reasonable steps to ensure those in line or entering their business wear a mask and comply with physical distancing requirements.

In Glendale face coverings must be worn when a person is outside their household, except for the following:

• You are alone or with household members only.
• Children under the age of 2.
• Children with breathing problems.
• Individuals with certain disabilities engaging in the permitted activities are exempt from wearing face coverings if they adopt social distancing requirements and follow all governmental directives and the Los Angeles County Public Health protocols.
• If face covering creates a risk related to work activity under federal, state or local laws, or workplace regulations.
• By anyone who has trouble breathing or is unconscious, incapacitated, or otherwise unable to remove the face covering without assistance.
• Indoors, provided that there is at least six feet of space and others are not likely to be in the same space for a few days
• Outdoors — provided that you are alone or with household members only — when nobody else is within 30 feet. Individuals must keep masks visible and ready to cover mouth and nose when others are within 30 feet.
• When a person is alone in a private office or area that is not shared and not likely to be visited by others without prior warning.
• When in a vehicle and either alone or with other members of the same household, unless they must lower their windows for any purpose such as to interact with first responders, food service workers or others outside their household.

Face coverings have been required in Los Angeles County since May 14. Other Southern California cities, including Manhattan Beach and Costa Mesa, recently imposed similar fines in an effort to get more people to comply.

Glendale residents and businesses can pick up free lawn signs and retail signage to help inform friends, neighbors and customers about the city’s face mask requirement. The signs are available for pickup at Glendale City Hall, located at 613 E. Broadway, at the back entrance, Monday through Thursday, from 7:30 a.m. to 5:30 p.m. and Friday from 8 a.m. to 5 p.m.

Residents who have concerns about anyone not wearing face coverings, or businesses that are not following the mandatory protocols, can call the Glendale COVID-19 hotline at 818-548-3301.

Glendale approves up to $2,000 fine for those not wearing face masks in public

Lonza plans to sell specialty ingredients unit, first-half profit rises

July 24, 2020

Lonza will begin selling its specialty ingredients unit in the second half of 2020, the Swiss drug contract manufacturer said, as it focuses on its drugs business that is making Moderna’s prospective vaccine for the COVID-19.

First-half profit rose 22% to 478 million Swiss francs (406.08 million pounds) on rising demand from biotech customers, Lonza said on Friday. Sales rose 3.3% to 3.1 billion francs, matching the consensus from analyst estimates collected by the company.

Lonza has been carving out its specialty ingredients business into a separate unit since last year and the board decided on Thursday to unload it in a sale process, Chairman Albert Baehny said in a statement.

“Once the sale is completed, Lonza will become a pure-play pharma and biotech company,” Baehny said in a letter to shareholders. “The sale will provide an opportunity to focus our attention and resources.”

Baehny added that the technology transfer with Moderna on their mRNA vaccine project is complete, with the first small-scale batch expected to be delivered to its Portsmouth, New Hampshire, facility before month’s end.

Lonza aims to finish a commercial production line in New Hampshire for Moderna’s prospective vaccine a month earlier than its original December 2020 target, Lonza told Reuters in June.

https://www.marketscreener.com/LONZA-GROUP-2956013/news/Lonza-plans-to-sell-specialty-ingredients-unit-first-half-profit-rises-30981751/

AstraZeneca’s lung disease treatment gets FDA nod

The U.S. Food and Drug Administration approved AstraZeneca’s drug to treat patients with a form of lung disease, the British drugmaker said on Friday.

The drug Breztri Aerosphere is being approved as a maintenance treatment for patients with chronic obstructive pulmonary disease (COPD), the third leading cause of death globally, AstraZeneca said.

Known as “smoker’s lung”, COPD is a progressively worsening and potentially deadly condition that affects more than 380 million people worldwide, primarily caused by smoking, but also by occupational hazards such as air pollution or chemical fumes.

The approval for AstraZeneca comes at a time when the British drugmaker is seeking to catch up with the runaway success of rival Glaxosmithkline’s Trelegy Ellipta drug.

COPD-related sales of Trelegy Ellipta more than tripled to 518 million pounds last year. Trimbow by Italy’s Chiesi is another competitor in the European market.

Breztri Aerosphere, which is a three-drug inhaler, is already approved in Japan and China for patients with COPD and is under regulatory review in the European Union, AstraZeneca said.

Last month, data from a late-stage trial showed that Breztri reduced the risk of a recurrence in flare-ups, or exacerbations, by between 13% and 24% when compared to standard two-drug inhalers, and cut the risk of death from all causes by 46%.

“Preventing exacerbations is central to the management of COPD … Breztri Aerosphere has demonstrated significant benefits in reducing exacerbations,” Weill Cornell, an investigator in a late-stage trial that tested the drug, said.

Sales of Astra’s respiratory drugs rose 10% last year, while oncology drugs saw a 44% surge in revenues.

https://www.marketscreener.com/ASTRAZENECA-PLC-4000930/news/AstraZeneca-s-lung-disease-treatment-gets-FDA-nod-30981933/