The M&A Rumor Mill Points to Gilead Acquiring Intercept Pharma

The M&A Rumor Mill Points to Gilead Acquiring Intercept Pharma April 25, 2016
By Mark Terry, BioSpace.com Breaking News Staff

The biopharma rumor mill continues to churn, with New York-based Intercept Pharmaceuticals thrown out as the latest possible acquisition target for Foster City, Calif.-based Gilead Sciences .

There are several reasons why this rumor has come to the top again, but the primary one is that on April 7, the U.S. Food and Drug Administration (FDA)’s Gastrointestinal Drugs Advisory Committee voted unanimously to recommended accelerated approval of the company’s Ocaliva (obeticholic acid) to treat primary biliary cirrhosis (recently renamed primary biliary cholangitis, or PBC). If approved, the drug would be the first to hit the market for the disorder in 20 years. The FDA’s final decision is scheduled for May 29.

Although the company is currently being rumored to be a target for Gilead, it was only February when it was rumored that AstraZeneca might be eyeing the company. And before that, it was rumored that Dublin, Ireland-based Shire might buy Intercept. GlaxoSmithKline has also been mentioned.

Apparently there’s a long list of big companies interested in Intercept. But the rumors were fed when it was suggested that the company had teamed with CenterView Partners to consult on a potential merger. CenterView had been involved with Shire’s acquisition of Dyax Corp , as well as Celgene ’s merger of Receptos, Inc. .

The company has had some ups and downs with Ocaliva. In May 2015, Intercept announced it had a new design for its Phase III trial of the drug for non-cirrhotic nonalcoholic steatohepatitis (NASH) with liver fibrosis. Both the FDA and the European Medicines Agency had advised a redesign, so as a result the REGENERATE Phase III trial was designed as a double-blind, placebo-controlled pivotal trial with enrollment of approximately 2,500 patients. It also included a pre-planned interim histology analysis at the end of 72 weeks of treatment in about 1,400 patients.

There are currently no approved treatments for NASH, although Gilead Sciences (GILD) is studying Simtuzumab for the disease, and Tobira Therapeutics is evaluating cenicriviroc in NASH.

Although the FDA is not required to follow the advisory’s committee’s recommendation, it typically does. Recently Morgan Stanley analysts expressed concern that Ocaliva might not reach full market potential because of safety concerns related to a more advanced form of PBC, but otherwise the market projections are very positive. To allay concerns over the PBC patients, Intercept is conducting a Phase IV study to assess long-term outcomes in PBC patients.

A treatment for PBC would bring in millions, but as a treatment for NASH, the market size is estimated at $35 billion. It could exceed a billion dollars in annual sales.

Another reason Bidnessetc believes Gilead might be a frontrunner is that it recently acquired a NASH drug from Nimbus Therapeutics for $400 million and milestone payments that could hit $800 million. Hadia Taqi, writing for Bidnessetc., says, “Gilead will be buying one of the half-dozen subsidiaries owned by Nimbus Therapeutics, called Nimbus Apollo Inc. The company has been developing a technology that works by blocking a disease-causing enzyme called Acetyl-CoA Carboxylase (ACC). Its lead ACC inhibitor is an early-stage drug called NDI-010976. It has won the FDA’s fast-track authorization already, and Phase I trial data for the drug in NASH is expected next month.”

But the Nimbus program is very early-stage, while Intercept’s potential is only weeks away from approval. And since Gilead dominates the hepatitis C market, it appears to want to expand into NASH as its next major liver project, and has three products in its NASH pipeline. Simtuzumab is the most promising, but it also is looking at GS-4997 alone and in combination with simtuzumab in Phase II trials, and GS-9674 is being evaluated in early-stage trials.

Taqi writes that with Gilead’s hepatitis C revenue still strong, but expected to taper after this year, and its HIV market facing stiff competition and patent expirations, “Gilead needs new blockbuster products to keep up with its own extraordinary growth…. Intercept could very well be the next one on its list.”

Back to news