Celgene Swallows Up SoCal's Receptos in $7.2 Billion Deal

Celgene Swallows Up SoCal's Receptos in $7.2 Billion Deal
July 14, 2015
By Alex Keown, BioSpace.com Breaking News Staff

SUMMIT, N.J. – Celgene Corporation has struck again, acquiring Receptos, Inc. for $7.2 billion to enhance the company’s inflammation and immunology portfolio. The acquisition was announced Tuesday afternoon.

The acquisition brings some key drugs into Celgene’s pipeline, including Ozanimod, an oral once-daily, selective sphingosine 1-phosphate 1 and 5 receptor modulator used in the treatment of ulcerative colitis, irritable bowel syndrome and relapsing multiple sclerosis. The drug is currently undergoing a Phase III trial with data expected in 2018. Zanimod is positioned to potentially become the first S1P receptor modulator to be approved for IBD, Celgene said.

Bob Hugin, Celgene’s chief executive officer and chairman of the board of directors, called the acquisition an “important strategy to sustain growth and enhances long term growth profit,” during a webcast following the transaction. He also touted the product pipeline Celgene will absorb through the acquisition of Receptos. He said Celgene expects Ozanimod to generate between $4 and $6 billion in annual revenue by 2020.

The deal comes as Celgene predicts a 22 percent increase in sales for the second quarter, about $2.25 billion.

closed on a positive note following announcement of the deal. The stock closed at $122.85, up $1.96 per share on the day’s trading.

Under terms of the deal, Celgene will acquire Receptos for $232 per share, or a total of about $7.2 billion. Celgene expects to fund the transaction through a combination of existing cash and new debt. The transaction is expected to close later this year, Hugin said.

Faheem Hasnain, president and CEO of Receptos, called Celgene the “ideal partner to maximize the potential of Ozanimod and our promising pipeline in order to improve the lives of patients worldwide.”

Responding to investors on a conference all, Hugin said the plethora of M&A Celgene has been involved with over the pat year is allowing the company to build a substantial platform for future growth.

The addition of Ozanimod will complement other drugs in Celgene’s pipeline, including the experimental Crohn’s Disease drug GED-0301 (mongersen). That drug was licensed from Nogra Pharma for $710 million with a promise of nearly $2 billion more in milestone payments. Hugin said Celgene feels “very strongly” about GED-0301 and what it can offer patients.

The third-leg of Celgene’s new inflammation and immunology portfolio includes Otezla (apremilast) used in the treatment of psoriasis and psoriatic arthritis.

Additionally, in its developmental pipeline the company includes seven molecules in phase II development in a variety of indications, including RPC4046 for eosinophilic esophagitis (EoE), and a growing number of phase I and preclinical assets.

Celgene’s deal with Receptos comes weeks after Celgene acquired a $1 billion stake in Juno as those two companies entered into a 10 year collaborative agreement to leverage combined immunology and oncology expertise to develop treatments for cancer and autoimmune diseases. The collaboration will have with an initial focus on Chimeric Antigen Receptor Technology (CAR-T) and T Cell Receptor (TCR) technologies.

Celgene is becoming something of a trailblazer in developing collaborative partnerships with other pharmaceutical companies. In April, Celgene Corporation struck two deals with other pharmaceutical companies with a combined value of $110 million to advance its oncology platform, continuing the cancer drugmaking company’s deal making trend to advance its oncology pipeline. Celgene entered into an $80 million agreement with Agios Pharmaceuticals, Inc. to develop AG-881, a small molecule that has shown in preclinical studies to fully penetrate the blood brain barrier and inhibit isocitrate dehydrogenase-1 (IDH1) and IDH2 mutant cancer models. Celgene also announced today it struck a $30 million agreement with one-year-old Canada-based Northern Biologics to advance that company’s work in oncology and fibrosis therapeutics.

Also in April, Celgene entered into a collaborative agreement with AstraZeneca PLC that will allow the U.S.-based drug firm to develop MEDI4736, AstraZeneca’s immunotherapy treatment for blood cancer.

In 2014 Celgene entered into 10 deals, shelling out an average of $222 million in upfront payments to its partners. Juno is developing cell-based cancer immunotherapies based on chimeric antigen receptor and high-affinity T cell receptor technologies to genetically engineer T cells to recognize and kill cancer. JCAR015 is Juno’s chimeric antigen receptor product candidate indicated for the treatment of relapsed or refractory B-cell acute lymphoblastic leukemia. JCAR015 is currently the subject of a Phase I trial, which is designed to determine the safety and appropriate dose of modified T cells in patients. Chimeric antigen receptor technology employs the body’s immune system to attack cancer cells. JCAR014, JCAR016 and JCAR017 are also Juno CAR-T cell product candidates in current levels of testing.

In March, George Golumbeski, a senior vice president at Celgene, told Bloomberg investments in small biotech firms allows Celgene and its shareholders to benefit from the research and development conducted by those smaller companies.

As New Jersey Biotech Booms, Will It Overtake Other States As Prime Location?
A week after Celgene Corporation announced it is officially the mystery buyer of Merck & Co. ’s former 1 million-square-foot R&D site in Summit, N.J., it quickly became our most popular story last week.

The company announced last Wednesday that it is buying the space, ending months of speculation about what Big Pharma company might move into the neighborhood.

The Summit, N.J. site is zoned research/office. The New Jersey site would put operations closer to some of the major biotech and pharmaceutical hubs on the East Coast.

But, by far, the most tempting part of doing business in the state remains New Jersey’s operating tax credit, which allows companies to sell their net operating losses to the New Jersey Treasury. One of the state’s most recognizable biotechs, Celgene, used the program until it became profitable, which was key to it staying in the state, said local officials.

That has BioSpace is wondering if New Jersey is becoming the new face of biotech. What do you think? Can the Garden State compete with other longtime stalwarts like California or Boston?

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