Pharma Stock Roundup: M&A Boom in Drug Industry With PFE & SNY Deals, Other Updates

This week, M&A activity picked up momentum in the drug and biotech sector, with Pfizer PFE announcing a huge $43 billion offer for another cancer drugmaker, Seagen SGEN. Sanofi SNY announced an agreement to acquire Provention Bio, which will add the latter’s newly approved type 1 diabetes (T1D) medicine, Tzield to Sanofi’s portfolio. Novo Nordisk NVO and Sanofi announced plans to lower the prices of some of their insulins, after rival Eli Lilly made a similar announcement earlier this month. Merck’s MRK phase III study on Keytruda for treating metastatic malignant pleural mesothelioma met the primary endpoint.

Recap of the Week’s Most Important Stories

Pfizer Offers to Buy Seagen: Pfizer announced a definitive agreement to buy cancer drugmaker, Seagen for $229 per share in cash, which adds up to a total enterprise value of approximately $43 billion. Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by adding a class of antibody-drug conjugates (ADCs). Seagen enjoys a leadership position in ADC technology. Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. All these drugs have witnessed strong uptake so far. Seagen enjoys a leadership position in ADC technology. The Pfizer/Seagen transaction is expected to close in late 2023 or early 2024, pending approval by Seagen shareholders and regulatory authorities. Some analysts believe the Seagen–Pfizer merger should not face significant scrutiny by the Federal Trade Commission as there is no major overlap between their drugs. The boards of both the companies have already approved the transaction.

The FDA approved Pfizer’s calcitonin gene-related peptide (CGRP) receptor antagonist, Zavzpret (zavegepant) nasal spray, for the acute treatment of migraine. The product is expected to be launched in July. With the approval, Zavzpret has become the first intranasal CGRP receptor antagonist indicated for the acute treatment of migraine.

Pfizer and partner BioNTech announced that the FDA granted emergency use authorization to its Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine as a booster (fourth) dose for children aged six months through four years. The bivalent vaccine is already authorized for kids under five years as the third dose of a three-dose primary series.

The FDA’s Antimicrobial Drugs Advisory Committee (AMDAC) voted 16 to 1 in favor of Paxlovid’s favorable benefit-risk profile.

Though Paxlovid already has an emergency approval from the FDA, Pfizer is seeking a formal/full approval for the drug for the treatment of mild-to-moderate COVID-19 in adult patients who are at high risk of progression to severe illness. The AMDAC based its vote on the totality of scientific and real-world data on the medicine. The FDA is expected to give its decision in May 2023.

Sanofi to Buy Provention Bio: Sanofi announced an agreement to buy Provention Bio,  for $25.00 per share in cash, representing an equity value of approximately $2.9 billion. The acquisition will add Provention Bio’s Tzield to Sanofi’s portfolio, which is the first therapy to delay the onset of Stage 3 type 1 diabetes (T1D) in patients aged 8 years and older who already have Stage 2 T1D. Tzield was approved by the FDA in 2022. Sanofi already has a co-promotion agreement with Provention Bio for Tzield.  The therapy is being evaluated in phase III for the treatment of pediatric and adolescent patients who are newly diagnosed with clinical T1D.

Novo Nordisk & Sanofi to Cut Insulin Prices: Novo Nordisk announced plans to lower prices of several pre-filled insulin pens and vials by up to 75% in the United States. The products include pre-filled pens and vials of basal (long-acting), bolus (short-acting) and pre-mix insulins, specifically Levemir, Novolin, NovoLog and NovoLog Mix 70/30. Novo Nordisk said it would slash the list price of its NovoLog insulin by 75% and that of Novolin and Levemir by 65%. It is also lowering the prices of some non-branded insulin products.

Sanofi also announced a 78% cut in the list price of its most popular insulin, Lantus. Sanofi also said it is capping out-of-pocket costs for Lantus for all patients with commercial insurance, at $35. Sanofi said it will also slash the list price of its short-acting Apidra insulin.

However, Novo Nordisk and Sanofi do not plan to start this until January 2024. Novo Nordisk and Sanofi’s announcements comes almost two weeks after Eli Lilly said it will cut list prices of some of its popular insulin by 70% to significantly reduce diabetes patients’ out-of-pocket costs.

Merck’s Keytruda Study in Malignant Mesothelioma Meets Goal: Merck’s phase III study evaluating Keytruda plus chemotherapy for the first-line treatment of patients with unresectable advanced or metastatic malignant pleural mesothelioma met its primary endpoint of overall survival (OS). The final analysis of the study showed that Keytruda plus chemotherapy led to statistically significant and clinically meaningful improvement in OS compared to chemotherapy alone in this patient group. Malignant pleural mesothelioma is a cancer that forms in the lining of the lungs.

The NYSE ARCA Pharmaceutical Index declined 2.9% in the last five trading sessions.

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

Here’s how the eight major stocks performed in the last five trading sessions.

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Image Source: Zacks Investment Research

In the last five trading sessions, AbbVie rose the most (5.4%), while Roche declined the most (0.3%).

In the past six months, Merck has risen the most (23.9%), while Roche has declined the most (16.1%).

(See the last pharma stock roundup here: LLY’s Alzheimer’s Study Setback, FDA Updates for SNY, MRK)

What's Next in the Pharma World?

Watch out for regular pipeline and regulatory updates next week.

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