BioSpace: you Hey, welcome to Biospaces the Weekly. I'm your host, Heather McKenzie, and today we're going to be talking about deals, deals, and more deals, specifically biopharma ⁓ &A. In the past week, pharma companies have collectively dropped more than $20 billion to swallow biotechs with approved products or promising drug candidates. We'll also touch on a couple of wins in the rare disease space, including Denali's approval for the first new treatment for Hunter syndrome in nearly 20 years. Plus we'll check in on wave life sciences, which crashed hard last week after disappointing weight loss data. Let's get started. Can you guys see me? Yeah. All right. One technical issue solved. We started on the Riverside, but you can see me on Teams. Let's get this podcast done. So how was your trip, Annalee? Welcome back. It was really good. I went down to Florida to visit my in-laws, which was lovely. Yeah, it was nice to get out of the snow and rain and everything, all the miserable weather. March has sucked here. And then you came back and there was no snow, right? Well, there's a little bit of snow, but yeah, I was raking leaves yesterday and hunting for Gaffadils. I'm excited. It hit 70 degrees here yesterday and today it's humid. Yeah. So that's really weird for Ontario in March. That is just not known. Yeah, and it's in the 80s all week here after having snowed earlier this month. So it's definitely been a fast stick march, I think across the board. Yeah, I had such a cool experience in Florida, though, I have to tell you guys, I did talk about this on LinkedIn, but I am we were out on the water. We were going boating with my kids and I was sitting there and had a few moments while we were waiting to get our tackle box, which we forgot. And I checked in on work and Jeff was teasing me, of course, because Signing in from a boat. Go back to your vacation. I was like, I swear I'm just sitting here with my feet up. got a sec. So anyways, and then we went out on the water and everything was great and we went swimming and we get back on our boat and I noticed that there was a boat nearby us that was from Alaska. So we pulled over to say hello because I've spent some time in Alaska. Turns out I knew this person and she was one of the mushers from the Yukon Quest sled dog race that was like kind of one of the high points of my early career. So very cool. You're from Canada. She's from Alaska. You met in Florida, but you already knew each other. Yeah, it was it was wild. And like, yeah, we knew each other. Like we got to catch up on, you know, our lives since then. Obviously, met my I met my husband on this sled dog race. We're now married. We have kids like it was really, really cool. I can't can't believe that it that she was just there. Isn't one of your kids named after something on that trip? Yes, yes, he is. He's named after one of the stops. So, yeah, it's obviously this. this event has had like a huge impact on my personal life and my career. So it was just a really weird full circle moment. Six degrees of separation. I really believe in that. It is eerie sometimes. Yeah. Well, we are so glad to have you back, especially because this morning was kind of insane. ⁓ We will get to that. But first, let's do introductions in case any of you kind people don't know who we are. Annaleigh, why don't you go first? Yeah, I'm Anneli Armstrong. am senior editor and I do the Biofarm executive newsletter. So I am back after my vacation and it's, as Heather said, a crazy, crazy day. So, ⁓ B.E. day, very busy normally, but even crazier today. I am Heather McKenzie, senior editor here at Biospace and in charge of ClinicaSpace, which is the newsletter that hits your inboxes every Monday. So that was yesterday, just yesterday. I can't believe it. And I'm Jeff Axe, Managing Editor, and as always, putting plugs in for some of our other newsletters, we have our daily gene pool newsletter, as well as weekly manufacturing brief and career insider. Thank you. Well, like I said, this morning, we woke up, this morning is work recording on Tuesday, for those of you who don't know that, but we woke up and we're immediately inundated with deals, deals, deals, deals. ⁓ So starting with Merck's, big buy of turns last week. The past week has actually seen three of the four biggest takeovers of the year. Yeah, it's been really crazy. I have been working on my first quarter ⁓ &A wrap and I have now had to rewrite it about three times. ⁓ Yeah, so we'll get to the two from today with Lily and Biogen, but I did want to talk about this Merck deal looking back to last Wednesday now and their buyout of turns. This clock says the second biggest of the year at 6.7 billion. It is second only to Gilead's $7.8 billion takeover of their CAR-T partner Arcelics. That was back in February. So Merck with the second biggest so far this year. And of course, Merck is facing a loss of exclusivity for Keytruda. So has actually been pretty active on the deal making front in advance of that patent cliff. And I really like to comment from BMO Capital Markets Analyst who cited this TURNS about as one of the best deals Merck has made since its spree ahead of the key true to loss of exclusivity. definitely one to pay attention to. TURNS comes with a mid-stage leukemia drug, this is an asset that analysts say could offer a multi-billion dollar revenue opportunity. It's for chronic myeloid leukemia. And so definitely one that Merck is hoping to make some money off of to. counter the loss that it will have. We'll see in Keytruda. Although I'll add, Annali, you know this Keytruda is still the best-selling drug as of last year, but it is on its way down. Yeah, maybe not for 2026, but we'll see. ⁓ So, you know, we called this deal. A lot of analysts have had turns on their list as one of the kind of most promising targets in biotech. So absolutely not surprising to see turns ⁓ bought out. What's really fascinating about this company is like this is like their third or fourth Pivot they now have this leukemia drug, but they were previously one of the leading companies in the obesity race really early on ⁓ So they actually you know seeing kind of this competitive pressure they pivoted they now have been advancing this turn 701 ⁓ So just a really cool, know, this company has just been through so many lives So this is a really good ending for them to after you know having to move and groove with kind of like the bio tech markets, it hasn't been an easy ride for them. I remember adding that to the article because I wanted to say this is a really big win, you know, for for for Turin's. I don't know how you pivot so many times and still still get to this spot. I think it's a really good a really good harbinger for my own life, actually, with all the pivots I've done. Yeah, absolutely. And also, I will note another their CEO, Amy Burroughs is a woman. We love to see a woman dealing like this. Hopefully this is, you remember last year I did this whole feature on like women who were conducting some of the biggest deals. Hopefully we'll see some more throughout the year so I can repeat that feature. All right. Well, a deal that just came out this morning was between Eli Lilly and Sintessa. ⁓ So in this deal, Eli Lilly picked up a pipeline of sleep disorder drugs, including an early stage, including an early clinical stage asset that could compete with K does over pork stone, which is currently under FDA review with a decision expected in Q3. So Lily will still be a little bit behind the drug they picked up from Sintessa, just had faced one data last year, but it was positive data and enough for Lily to strike this deal. This is a really cool deal for Lily. I don't think they had any assets in sleep disorders. Yeah, so this is like a bit of a diversification, something really cool. And obviously this is a competitive space with Decata in it that adds some validation for them. So neat one, very cool. Yeah, Lilly has actually been on a diversifying kick the past year. So they've been active in gene therapy deals. So they've picked up Edvarum biotechnologies and its lead eye disease therapy and the gene editing biotech Verve both in 2025. They've also recently jumped into the car tea space with Orna Therapeutics in February. Yeah, Lily obviously has a lot of cash to spend. They're obesity portfolios, so you know, they're on a big deal spree. That's not surprising. ⁓ But one company that has not been on a deal spree is Biogen. They had a deal this morning that was also a really fascinating one. ⁓ know, CEO Chris Weibacher has like absolutely been unable to shake analyst questions every single quarter about when they're gonna deal, what they're gonna deal, what they might do. They've consistently said they have about five to $6 billion to spend. So this morning, they have now put in an offer to buy a palace for $5.6 billion. This kind of ends like a bit of a string in which they hadn't conducted any deals. They've only done three since about 2020. So this is a big one. So in a Pellis, they are going to snag two approved medicines. have M-Pavelli, which is approved in three kidney diseases, and Cyphivore, which is approved in an eye disease. These drugs combine for $689 million in revenue for 2025. That's not a huge amount, it's nice. Biogen says that this is gonna help them through to 2028 when they have some products in their pipeline that should start contributing revenue. What Biogen was really interested in for this deal is actually the expertise that Appellus will bring in this kidney disease space. If you remember, one of the very few deals that Biogen has done back in 2022, they bought HighBio, which brought them the kidney disease drug, Felsartumab. This is heading into a period of some pretty significant phase three readouts that will start to come out in about the first half of 2027. So Biogen thinks that by buying a Pellis, they can kind of have quote, a running start in these disease areas. That's really interesting. It makes a lot of sense. You need that expertise and rather than going through the recruitment process of hiring to just buy out a company that has a 350 strong team of those people that you need, that's a really smart way to acquire talent. Yeah, absolutely. And that's what executives said. They're like, this is competitive. You know, there's not a lot of this talent out there, so they were able to just basically buy them. ⁓ So really good news for like kind of the workforce side of things, which if you know, biotech has been under a lot of stress lately. There's been a lot of layoffs across the industry for many years. ⁓ know, Chris Weibacher very specifically said, we're going to retain as much talent from this as we can. ⁓ So analysts were pleased with that aspect of the deal, as well as the diversification. that Biogen is getting here. However, a lot of analysts were criticizing the deal premium. I saw estimates that it was like 130 % of Appellus's share price, which is pretty significant. But Vibecker again kind of dismissed competitive concerns, said that like, if you look at the long-term revenue and what this is going to provide for the kidney franchise, that this deal was really worthwhile. Well, it's been a really big week for Biogen. Yesterday, they announced an approval of a high dose version of Svinraza, which is their spinal muscular atrophy drug. And this is after the drug was rejected based on manufacturing concerns last September. So they got that one through. actually, coming back to what you were saying, Annali, about kind of biding time, Jeffrey said the approval could basically bridge Biogen's SMA franchise until its next gen drug, Salinersin, hits the market. ⁓ They also knocked it out of the park ⁓ with one of their lead I &I drugs, ⁓ Litophilumab, ⁓ or LIDI for short, they call it LIDI. ⁓ And LIDI reduced disease activity in cutaneous ⁓ lupus. erythromylus, so lupus, in a second straight trial. ⁓ that was, know, analysts were really big on this drug. They said, I think RBC Capital Markets, was, said we believe this should underscore the promise of biogen's ⁓ immunology and inflammation pipeline. We were just talking about I &I. It is so hot right now. Yeah. in just an absolutely crazy week for Biogen. You don't hear about them for a few months and then all of a sudden they have three big news items in one week. yeah. Yeah. And those big ticket deals, they weren't the only acquisitions in the past week. Novartis, one of this year's most prolific deal makers, will pay up to two billion to bolster its I &I, again, pipeline, with Xcelergy. And ⁓ This one actually isn't final yet, but Orinia Pharmaceuticals, ⁓ which is now headed by activist investor Kevin Tang, is going after Kazar Life Sciences again. Again, yes. If you guys do not know this, my favorite beat in all of biopharma, I'm pretty sure, is the Kevin Tang beat and what this man is doing. I like to call him kind of the dark horse of biopharma. He essentially buys companies and then shuts them down. He gets a little bit of a return for shareholders, whatever's left over he keeps and kind of makes some cash off of this. It's kind of like a biotech cleanup service. ⁓ So he owns a couple of shell companies and he previously tried to buy Kazar, which was unsuccessful in 2024. However, last week he actually took over control of Orinia as CEO. He swapped out other key positions on the C-suite with his allies as well. So This appears to be, guess, one of his first acts. He has now moved to acquire Kazar, a biotech that has really been struggling in the past couple years ⁓ after some clinical failures. They've been trying to find agreement with the FDA to advance their pipeline. ⁓ So now, Arrhenia is going to buy this company. ⁓ And the deal is valued at about $50 million. We will see if Kazar will ⁓ try to fight this off. They did previously. ⁓ and Tang and his companies were unsuccessful, but this is just another wild twist in the story of Kevin Tang, this mysterious biotech investor. Yeah, you had fun writing this one, didn't you? I did. was very, again, I've been following this for so long that it's really hard to summarize, but yeah, it was fun. We definitely met you last week. Tristan, our senior staff writer, he lives in the Philippines and he was scanning the news and he immediately shot that one over to the chat like, man, if Annali were here, she would have jumped on it immediately. So we tried to do our best without you, but Kevin Tang didn't let you down. He made more news this week so you could jump on it. Yeah, I don't think my internet was that good on the boat. ⁓ Well, we talked a lot this past year about the challenges facing rare disease drug developers, but this week we had some good news. So in addition to that ⁓ SMA approval, ⁓ two other novel therapies will hit the market this year. ⁓ One for Hunter syndrome and another for leukocyte adhesion deficiency ⁓ one or I otherwise known as LAD I. Yeah, the Hunter one was really exciting to me. So this was from Denali. They won approval on Thursday for Avila. I think it's called maybe you Star Wars fans will appreciate this one. It's an enzyme replacement therapy. It is the first new treatment for Hunter syndrome in 20 years and first ever to address the neurologic complications of the disease. It's also the first FDA approved biotherapeutic that uses the transferrin receptor to cross the blood brain barrier. So a lot of firsts with this one. But one of the reasons it was so exciting is because it comes on the heels of a rejection from the FDA for a different Hunter syndrome. This one was a gene therapy from Regenexx Bio. And we cover that rejection in the context of yet another rare disease rejection that came as a bit of a surprise to the company. was, Regenexx had said at the time of the rejection that the FDA had previously agreed to their protocol and that the company had submitted additional data and information to address the very points raised in the CRL. So it was, again, as we've talked about so many times, Heather, another one of those reversals, of course, or it seemed, or just a little bit of not clear communication from the FDA. and devastating to that patient community. So to follow that up with a win for Denali, it was a much needed win, like I said, for this particular disease space and I think rare diseases more generally as well. Yeah, no, definitely. I was saying to someone the other day that it's really good that we had two shots on goal with the Hunter syndrome this spring or this winter spring. But yeah, know, mean, analysts were saying, I think it was Jeffries that were was saying that they were kind of gauging it as a 70 % chance of approval for this one, for Denali's drug, part of their reasoning was that it's an enzyme replacement therapy, and there's already one of those on the market. So the FDA might feel a little more comfortable with that. Makes sense. Good. Either way, whatever the reason, great news for the hunter community. is. Well, and the Rocket has launched finally. Rocket won approval for Creslite. ⁓ for ⁓ LAD-I, which is a rare, is it like D-I or LAD-1? Is that a one or an I? I never know. I don't know. It might be a Roman numeral one. ⁓ So it's a rare life-threatening immunodeficiency disease. so analysts aren't expecting chrysalidae to bring in much revenue for ROCKET. This is due to the rareness of the LAD-1 community. ⁓ And there, but the real value in the approval, according to Jefferies again, is that it de-risks Rockets platform and manufacturing network, ⁓ which could set it up for future approvals. Yeah. Hunter syndrome is also extremely rare. It is just 500 patients in the U S and 2000 globally have Hunter syndrome. And analysts actually said the same thing about the Avaya approval ⁓ that it de-risk Stan Donnelly is transport vehicle chemistry for CNS delivery. So maybe two real foundational ⁓ approvals here. Yeah, that would be great if they could set the stage for more rare disease approvals using these platforms. Definitely. Well, we have just a mini weekly weight loss segment for you this week, but we thought it was important to talk about this one. So weight loss stock price cut in half last week when early data from their RNA therapy for obesity failed to impress investors. Yeah, so Phyllis, why did it crash so terribly? Yeah, well basically the lower dose of the therapy did better on total fat loss than the higher one. ⁓ However, the lower dose data was at six months and the higher dose was only three months. And there were also body composition differences that that we've noted between the cohorts. They said the higher dose cohort cohort was leaner and had a lower BMI. So analysts weren't so quick to write ⁓ WVE007 off either. Oppenheimer analyst Chang Li said the firm would be buyers on any weakness. As a result, further support for the therapy's clean safety profile. And this is interesting. I wasn't even sure I knew this. ⁓ Once or twice yearly dosing schedule. That's way more convenient than the current options. Right. Yeah, I mean, that could be a real convenience benefit for them. ⁓ So it's been quite the roller coaster wave over the past few months, though. ⁓ When they reported three-month data for the lower dose in December, their stock popped 80%. So it's like up and down for wave in the past few I feel like every one of these readouts in the weight loss space, know, Wall Street just reacts significantly. It means so much to a small biotech because they have so many so much less in the pipeline and you know their their fortunes just really go on these. Yeah there's a lot riding on it for sure. This has been a really exciting time for some of these smaller biotechs that are trying to get into the weight loss space like we've had a lot of readouts from Lily and Novo and there's been a lot of discussion there but like I really think this is the show me year for these smaller companies that have sworn that they can do better so it's it's great to see some of these readouts finally coming. Yeah, well, just one more note on the weight loss front. We are all eagerly awaiting the approval or decision on or for Glipron, Lily's oral obesity drug by April 10th. Now that would be a shocker if that one rejected. By all accounts, that one is on its way to the market. That one would be, yeah, that would be a breaking email. Well, Anna-Lee, what have you got going on in BioPharmaExpect this week? Yeah, so obviously ⁓ &A is gonna be a big theme. Once I rewrite my ⁓ first quarter deal story for the third or fourth time, we will have that recapping the activity. We also have two really great stories that are leading the newsletter. The first one is looking at how pharmas are... considering delaying European launches in light of President Donald Trump's most favored nation drug pricing. The argument there is that if they have to use reference pricing in European nations, that will take the price down in the US, less revenue, et cetera. ⁓ But one key element of this is that that could provide an opportunity for China, which is making a lot of kind of like me too ish drugs that are similar. They could easily come into the European market and take away. some potential revenue. So that's a really cool story we've got. We also take a look at how AI is shaping IPO prospects in ⁓ biotech. We recently saw an IPO from Generate Biomedicines, which really galvanized some excitement in the biotech area. So you can see that and more in Biofarm Executive, which comes out on Wednesday mornings. All right. Thanks, Annali. You haven't included any April Fool's jokes in that, you? No, but now I'm gonna have to do that too. Lily's share price plunges 40%. Yikes. Well, thank you all for listening and happy April everyone. you you