BMS' $2.4B Grab Spotlights Platforms
Attention Shoppers: Antibody Prizes Not Limited to Medarex
By Jennifer Boggs
Assistant Managing Editor
There's one less antibody player on the market now that Bristol-Myers Squibb Co. has staked a claim to Medarex Inc. in the form of a $2.4 billion buyout offer, leaving many to speculate on the next takeout target in the rapidly diminishing antibody platform space.
New York-based BMS' move was not surprising, given its existing partnership with Medarex on late-stage ipilimumab - set to report Phase III metastatic melanoma data next quarter - and its unsuccessful attempt last fall to acquire Erbitux (cetuximab) partner ImClone Systems Inc. BMS declined to pursue a bidding war after Eli Lilly and Co. topped its offer by $8 per share for a total purchase price of about $6.5 billion, but perhaps even then, it was eyeing its ipilimumab collaborator. (See BioWorld Today, Oct. 7, 2008.)
Even though some analysts remain skeptical of ipilimumab's success in melanoma, particularly after Medarex's Pfizer Inc.-partnered antibody tremelimumab fizzled in the same indication last year, the drug has shown promise in other indications such as prostate and lung cancers. Best of all, BMS would gain full rights to Medarex's platform antibody technology, which has generated two marketed products to date: Simponi (golimumab) for rheumatoid arthritis, sold by Johnson & Johnson unit Centocor Ortho Biotech, and Novartis AG's Ilaris (canakinumab) for cryopyrin-associated periodic syndrome.
Medarex receives royalty streams on sales of all three drugs. It also holds equity stakes in Copenhagen, Denmark-based Genmab A/S and Needham, Mass.-based Celldex Therapeutics Inc.
BMS' $16-per-share bid is nearly double Medarex's Wednesday closing price, an impressive premium that underscores pharma's unflagging interest in antibody technologies.
And, as the demand for antibody platforms increases, especially since they, like biologics carry the potential for higher pricing and longer patent lives in the uncertain era of health care reform, additional acquisitions likely will follow.
Over the last few years firms such as Abgenix Inc. and Cambridge Antibody Technology Ltd. have been snatched up - both of them, like Medarex, by partners - in deals with Amgen Inc. and AstraZeneca plc, respectively. (See BioWorld Today, Dec. 15, 2005, and May 16, 2006.)
Analyst Mark Monane, of Needham & Co., identified in a research note four characteristics of the company that could be acquired next. It's likely to be working in the hematology/oncology space, and will have a product in late-stage development, an existing relationship with the potential acquirer and - of course - the antibody technology. Medarex fit the bill on all four counts, but a couple of other firms are similarly positioned, such as Seattle Genetics Inc. and Regeneron Pharmaceuticals Inc., both of which saw their stocks lift Thursday.
Bothell, Wash.-based Seattle Genetics, which recently began Phase III testing of antibody-drug conjugate SGN-35, also is in a Phase IIb trial with dacetuzumab, an anti-CD40 antibody partnered with Genentech (now part of Roche Holdings AG). Its shares (NASDAQ:SGEN) gained 64 cents, to close at $9.97.
Although Regeneron's late-stage cancer therapy aflibercept, partnered with Sanofi-Aventis Group, is a fusion protein rather than an antibody, the Tarrytown, N.Y.-based firm has an antibody platform that has yielded three Phase I-stage drugs, also partnered with Sanofi.
Regeneron's stock (NASDAQ:REGN) jumped $1.65, to close Thursday at $19.62.
Piper Jaffray's Edward Tenthoff also highlighted Rockville, Md.-based Human Genome Sciences Inc., which recently reported positive data of Benlysta (belimumab) in a Phase III lupus trial, as a potential acquisition target for partner London-based GlaxoSmithKline plc. Earlier in development, HGS has TRAIL receptor antibodies against cancer.
But it's not only public antibody firms that have captured big pharma's attention. In late 2006, GSK spent $454 million to acquire Domantis Ltd., an early stage UK firm with a domain antibody platform.
That could be good news for smaller, private firms such as 2007 start-up Adimab Inc. The Lebanon, N.H.-based company, which has a platform for rapidly delivering yeast-based antibodies, signed deals last month with Roche and Merck & Co. Inc. (See BioWorld Today, June 22, 2009.)
In addition to ipilimumab, the Medarex deal adds several other pipeline programs to BMS's arsenal. MDX-1100 is an anti-IP10 drug in Phase II development for ulcerative colitis, and the firm has five Phase I-stage programs in inflammatory disease and cancer.
Three other programs are being developed in partnerships with AstraZeneca, Ono Pharmaceutical Co. Ltd. and PharmAthene Inc.
BMS is expected to begin the tender offer for all of Medarex's outstanding shares on or about July 27, and the deal is anticipated to close about 30 days later.
Shares of Medarex (NASDAQ:MEDX) shot up $7.49, or 89 percent, to close Thursday at $15.89.
Published July 24, 2009
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