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Sanofi to buy Synthorx; Merck & Co. to acquire ArQule; deal on medical bills


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Essential IR Insights Newsletter - February 2023

Sanofi to buy Synthorx; Merck & Co. to acquire ArQule; deal on medical bills

Editor's Note: Today's edition of the Daily Dose was published late due to technical issues. We apologize for the inconvenience.

Top news

* France's Sanofi is acquiring all the outstanding shares of immuno-oncology company Synthorx Inc. in a deal with a total equity value of about $2.5 billion. Under the agreement, Sanofi will initiate a cash tender offer for all the outstanding shares of Synthorx for $68 apiece, representing a 172% premium to Synthorx's closing price Dec. 6. Sanofi said the merger has a total enterprise value of about $2.35 billion.

* Merck & Co. Inc. reached a definitive deal to acquire precision cancer drug developer ArQule Inc. for about $2.7 billion. Kenilworth, N.J.-based Merck will launch a tender offer to purchase all of ArQule's outstanding shares for $20 each in cash. The deal will expand Merck's drug pipeline to include therapies for blood cancers.

* U.S. House and Senate health committee leaders said they have struck a deal to end surprise medical bills, lower drug prices, fund community health centers and increase the age from 18 to 21 to buy tobacco products. Details of the agreement, however, remain unclear.

The lawmakers said the bipartisan legislation included a "new system of dispute resolution that includes arbitration" for settling surprise medical bills — unexpected high charges from hospitals, doctors and other providers not covered in a person's health plan, or out of network.

* Meanwhile, Sens. Chuck Grassley, R-Iowa, the Senate Finance Committee chairman, and Ron Wyden, D-Ore., the ranking member, revealed the tweaks they made to their legislation aimed at lowering prescription medicine costs for Medicare beneficiaries.

The lawmakers also added into the legislation a number of must-pass measures to extend the life of several healthcare programs through the $100 billion projected savings generated from their drug pricing bill — a strategy to entice their colleagues on Capitol Hill to get behind the package.

* Johnson & Johnson's Janssen Biotech Inc. agreed to acquire all rights to XBiotech Inc.'s anti-inflammatory antibody bermekimab for $750 million in cash. XBiotech may also receive up to $600 million in potential milestone payments.

* David Lennon, president of Novartis AG unit AveXis, defended the price of Zolgensma — a gene therapy for spinal muscular atrophy that costs $2.1 million — saying the one-time treatment is still less expensive than its alternatives, the Financial Times wrote in a special report. Zolgensma, the world's most expensive drug, was approved by the U.S. Food and Drug Administration in May.

On the policy front

* Members of the Medicare Payment Advisory Commission supported eliminating a payment update for hospices for fiscal year 2021 due to providers reporting sufficient Medicare profit margins. The commission also supported a wage adjustment and Medicare payment cap reduction of 20% to better reign in spending.

Drug and product pipeline

* Johnson and Johnson said its unit Janssen Pharmaceutical Cos. will commit up to 200,000 Ebola vaccine regimens to support a new immunization program led by Rwanda's government. The vaccination program was launched to protect Rwanda's citizens from the Ebola outbreak in neighboring DRC that has recorded more than 3,300 cases and over 2,200 deaths.

* Cortexyme Inc.'s bacteria-targeting drug candidate, COR388, reduced levels of a protein associated with Alzheimer's disease risk in an early-stage trial, according to new data presented at the annual Clinical Trials on Alzheimer's Disease conference. COR388, which zeroes in on the ApoE gene recently highlighted in Alzheimer's drug development by large pharma companies Biogen Inc. and Novartis AG, was evaluated in a phase 1b trial that enrolled healthy volunteers and people with Alzheimer's.

* Amgen Inc. said the U.S. FDA approved Avsola, a biosimilar of Johnson & Johnson's Remicade for treating autoimmune disorders, including rheumatoid arthritis and psoriasis.

* Biohaven Pharmaceutical Holding Company Ltd. said troriluzole, its experimental treatment for Alzheimer's disease symptoms, passed an interim futility analysis and will continue in its ongoing late-stage trial.

* The FDA partially halted phase 2 and phase 3 trials evaluating Ipsen SA's drug palovarotene in patients with rare bone disorders under the age of 14, citing safety concerns. The French pharmaceutical company was testing palovarotene for treating fibrodysplasia ossificans progressiva, which has no cure or treatment, as well as multiple osteochondromas, which is usually first diagnosed in patients around age 4.

Operational activity

* Moody's placed Astellas Pharma Inc.'s A1 issuer ratings under review for downgrade after the company announced it would acquire San Francisco-based Audentes Therapeutics Inc. in a deal valued at $3 billion. Moody's said the acquisition shows the urgent need for Astellas to replenish its long term product pipeline after many patents expire this year and signal acquisition event risk.

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