June 10, 2015
By Mark Terry and Riley McDermid, BioSpace.com Breaking News Staff
It was reported yesterday by Proactive Investors’ Philip Waller that San Diego-based Receptos has rejected takeover bids by U.K.-based AstraZeneca PLC , Israel-based Teva Pharmaceutical Industries Ltd. and Foster City, Calif.-based Gilead Sciences, Inc. .
Back in April 2015, Receptos announced that it had wrapped up enrollment in the RADIANCE Phase III trial of ozanimod in patients with Relapsing Multiple Sclerosis (RMS), and was looking for a development partner. What the company got instead were buy bids when several companies came forward with acquisition offers.
Receptos had a string of good news connected to ozanimod. In October 2014 it reported positive Phase II results of its TOUCHSTONE trial for moderately-to-severely active Ulcerative Colitis (UC). Based on positive induction period results, the company indicated plans to begin a Phase III trial in UC and a Phase II trial in Crohn’s disease this year. The drug also shows promise for the treatment of multiple sclerosis (MS) and other forms of inflammatory bowel disease.
Any potential buyers of the company should be aware that while Receptos’ Ozanimod is a solid asset, it may soon be outpaced by Actelion Ltd. ’s ponesimod, which has been showing enormous promise in late-stage trials, said Mark Schoenebaum, an analyst for ISI Evercore.
“The advancement of ponesimod into Phase III represents a competitive threat to RCPT that perhaps was underappreciated after the program appeared dormant for some time,” said Schoenebaum in a note to investors last month.
“At the same time, [the] news perhaps also demonstrates the value of the mechanism of action and supports the idea that a safe titration scheme is possible for the class,” he wrote. “In MS, if ATLN only requires a single Phase III trial (the trial is expected to enroll imminently), the timeline for approval could be around 6 to 12 months behind RCPT‘s RPC1063 in MS. However, given respiratory and first dose cardiovascular issues for ponesimod in its Phase II trial, a better understanding of safety, including the new dose titration scheme is needed. ATLN indicated no intention of pursuing inflammatory bowel disease (ulcerative colitis and Crohn’s disease) indications at this time.”
The company is also developing a treatment for eosiniphilic esophagitis, an inflammation of the throat and esophagus.
Analysts at the time indicated that takeover rumors were springing up everywhere because buying the company would be cheaper than a partnership in the long run. The primary competition for the MS market is Biogen, Inc.’s Avonex, which brought in $3.01 billion in 2015. The MS market is projected to be about $17 billion annually.
AstraZeneca reportedly was offering about $200 per share for Receptos. Teva and Gilead both apparently proposed $280 per share. The company has a market capitalization of $5.1 billion.
Receptos reportedly rejected the offers because the company felt they undervalued the company. Unnamed sources suggest Receptos would consider an offer in the range of $350 per share.
Of course, back in May 2014 Pfizer Inc. (PFE) made a $119 billion bid for AstraZeneca, which fell apart. AstraZeneca then announced in August 2014 a collaboration agreement with Illumina to develop a next generation sequencing (NGS) platform for companion diagnostics that would be applicable across AstraZeneca’s oncology portfolio.
Just last week BioSpace.com reported on AstraZeneca’s booming immuno-oncology business, validating its rebuff of the Pfizer Inc. deal. It has an extensive pipeline of cancer drugs, and the company had a number of positive studies presented at the recent American Society of Clinical Oncology (ASCO) meeting in Chicago.
An unnamed source suggests that $350 per share to Receptos from AstraZeneca may be too rich for the British company. Cited in the Proactive Investors article, a source said, “AstraZeneca has been looking to buy it but they’re not going to get it.”
No surprisingly, an AstraZeneca spokesperson said the company would not comment on market rumors or speculation.
Meanwhile, Teva has been fending off an acquisition offer from Canonsburg, Penn.-based Mylan N.V. Mylan is one of the largest generics and specialty pharmaceutical companies globally, with 1,400 different products. Teva also focuses on generics, as well as specialty drugs and active pharmaceutical ingredients. Teva rejected a $40 billion takeover bid from Mylan.
When Will Pfizer’s Breakup Happen?
Speculation that the revamping of Pfizer Inc. ’s internal business structure could happen as soon as this year has biotech wondering just when this Big Pharma company could see changes.
Last week an analyst with J.P. Morgan said he thinks there will be a much faster timeline than most of Wall Street had predicted for Pfizer’s stated mission to refocus its efforts on new medicines.
Pfizer initially announced in 2012 that it would be shedding units that were non-essential to that goal. It then promptly sold its nutrition silo to Nestle for $11.85 billion, which was rapidly accompanied by a public spin-off of its animal health business for $2.2 billion.
“While a Pfizer break-up would likely be a 2017 event, we see potential catalysts in 2015-2016,” said Chris Schott, an analyst at J.P. Morgan. “Three years of audited financial statements (2014-2016) are required before any part of Pfizer can be spun off, and we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile.”
BioSpace wants to know what you think: Will Pfizer be a changed company by the end of 2015?
