M&A in May 2019

Welcome back to Flagged Events: M&A, where we recap some of the latest mergers & acquisition activities across pharma for the previous month.

No go for NextCell and Idogen

In April, it was originally announced that the boards of NextCell Pharma AB ($NXTCL) and Idogen AB ($IDOGEN) were discussing a potential merger, which resulted in an April 25 halt in trading of NextCell shares, as the prospective deal would have had NextCell buying all shares of Idogen. Later on in the month, the two Swedish companies concluded that the talks had been suspended.

The talks had been officially announced around the reporting for the first half of FY 2018/2019, citing an operating income of SEK 508,779, which is up from SEK 391,204 during the same period in the previous year.

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Lundbeck picks up Abide Therapeutics

Denmark’s Lundbeck ($LUN) announced their agreement to purchase Abide Therapeutics Inc., the California clinical-stage neurology biotech developing candidates that target the monoacylglycerol lipase (MGLL) enzyme.

Under the terms of the deal, Lundbeck will pay DKK 1.65b (~$250m USD) upfront, with up to another DKK 1.0b (~$150m USD) based on milestones. The deal will bring Abide’s ABX-1431 program into the Lundbeck pipeline, giving them a Phase 2a Tourette Syndrome candidate that is also being evaluated for the treatment of L-Dopa Induced Dyskinesia and Pain. Abide currently has 5 other candidates in early development.

Lundbeck opted to keep Abide’s La Jolla lab as a drug discovery center, rather than shuttering the location, hopeful that the MGLL platform will provide a greater potential for other prospective drugs outside of ABX-1431.

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Adynxx & Alliqua Complete Their Merger

San Francisco’s Adynxx (Now trading as $ADYX) announced the completion of their merger with Alliqua Biomedical Inc. (Previously $ALQA). The plans were made public in October 2018, after Alliqua had spun off and merged their contract manufacturing business, AquaMed Technologies, with TO Pharmaceuticals in November 2018. Adynxx’s pipeline consists of several candidates targeting pain and inflammation, including their Phase 2 candidate, Brivoligide (AYX1) for postoperative pain, and preclinical AYX2 candidate for focal neuropathic pain.

The stock-for-stock deal was proposed as having all outstanding Adynxx shares would be converted into Alliqua common stock, with outstanding Alliqua shares undergoing a reverse split prior to closing. Upon closing of the deal, Alliqua was renamed to Adynnx Inc., the official headquarters listed as San Francisco, and trading commenced under the new $ADYX ticker symbol. Alliqua shareholders were also designated to receive a special cash dividend of $1.05 per share, distributed on a pre-split basis, with May 29 2019 as the payment date.

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Pfizer builds on rare disease portfolio with Therachon acquisition

In early May, it was announced that New York’s Pfizer ($PFE) had acquired Basel’s Therachon Holding AG in a $810m deal ($340m upfront and $470m dependent on milestones). Therachon will also spin out their apraglutide program into an independent company, with Pfizer Ventures holding a minority stake in the new company. The program is currently in Phase 2 for the treatment of Short-Bowel Syndrome and Phase 1 for other rare gastrointestinal indications.

The deal brings Therachon’s clinical stage Achondroplasia candidate (TA-46) into Pfizer’s rare disease portfolio. The autosomal dominant disorder is the most common form of short-limbed dwarfism, and is caused by a mutation in the fibroblast growth factor receptor 3 (FGFR3), which causes the signaling pathway to remain overactive. TA-46 is a FGFR3 decoy, and aims to regulate this overactivity with the weekly injection for youth patients. There are currently no approved treatments for Achondroplasia, but TA-46 faces competition from Ascendis’ TransCon CNP and BioMarin’s Vorsoritide (BMN 111).

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C3J + AmpliPhi = Armata Pharmaceuticals

In early January, it was announced that the two clinical stage biotechs, AmpliPhi Biosciences ($APHB) and C3J Therapeutics had entered into agreement to merge under an all stock deal. The resultant company, Armata, would be newly listed under the stock ticker $ARMP and would be focused on the development of precisely targeted bacteriophage therapeutics for antibiotic-resistant infections. The deal closed successfully as of the announcement on May 9 2019. Ownership in the new company is split 76:24 between C3J and AmpliPhi’s current shareholders.

Armata’s combined pipeline now consists of a Phase 1b/2 candidate (AP-SA01) targeting Bacteremia indications from staphylococcus aureus, as well as a preclinical synthetic phage candidate for pseudomonas aeruginosa related respiratory indications. A synthetic phage candidate in partnership with Merck & Co. is currently in the discovery stage, but further details remain undisclosed.

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Gingko Bioworks to buy Warp Drive Bio’s platform

Seven months after being acquired by Revolution Medicines, it was announced that Warp Drive Bio has sold their genome mining platform to Boston’s Gingko Bioworks. The genomic technology will expand Gingko’s biological engineering capabilities, complementing their expertise in the search for better antibiotics.

Following the divestment from Revolution, Warp Drive Bio’s genome mining team will move to Gingko’s Boston HQ.

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ESSA Acquires Realm

Vancouver-based ESSA Pharma ($EPI) announced their agreement to acquire Houston’s Realm Therapeutics ($RLM) in an all stock deal, estimated in value around $21.5 million. The deal comes after the completion of Realm’s asset disposal that was announced back in February as part of the company’s strategic review that commenced in September 2018.

The deal is expected to be completed by mid-2019, and aims to advance ESSA’s N-terminal domain of the androgen receptor (AR) candidate (EPI-506) being developed for patients with advanced prostate cancer.

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EVER’s Euro Expansion

Austria’s Ever Pharma announced their acquisition of Amneal Deutschland in mid-May. Purchasing the Amneal Pharmaceuticals subsidiary will help to expand EVER in the European market, giving them a strong generics affiliate in the German marketplace.

Amneal Deutschland’s (Rebranded Ever Pharma GmbH) portfolio of CNS, Hematology, Oncology, Cardiovascular, GI, and other products will complement EVER’s core offerings of Neurology, specialty injectables, and contract manufacturing units.

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Merck scoops up Peloton (No, not the bike company…)

Merck & Co. ($MRK), the New Jersey giant often confused with Germany’s Merck Group ($XE:MRK), may not be launching a foray into the fitness world (yet…), but they did recently announce their purchase of Dallas-based Peloton Therapeutics, just one day before the oncology company was set to price their IPO. The irony is hard to miss, as the fitness focused Peloton is rumoured to be exploring going public in the near future. But, we digress…

Update: Peloton confidentially filed for IPO shortly after publishing.

The upfront payment amounts to $1.05 billion in cash, with another $1.15 billion dependent on development milestones and performance. With an expected IPO price of $17 per share ($756 million market value), Merck’s deal works out to roughly $50 per share, a 195% premium.

The acquisition brings Peloton’s lead oral small molecule candidate (PT2977) into Merck’s oncology portfolio, with the program targeting the hypoxia-inducible factor-2α (HIF-2α) pathway for patients with renal cell carcinoma. Alongside Keytruda, Merck’s existing oncology blockbuster, PT2977 will help to expand their offerings.

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Have a Zymewire account? Click here to view Merck & Co.’s global activity!

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