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Eyes On Pharma Blog 

1Q24 BioPharma Deals & Raises



We've been keeping Eyes On Deals & Raises in the BioPharma sector for the first quarter of 2024. Things seem to be heating-up as companies look to beef-up pipelines and enhance share of therapeutic areas. Here's a few articles and deals that caught our interest.

 

M&A Update on Q1 2024

 

 2024 Expectations

PWC’s recent ‘US Deals 2024 Outlook’ for Pharma and Life Sciences stated that despite some stabilization in the macroeconomic environment and the potential for a soft landing in sight, continued geopolitical and regulatory uncertainty seems a given in 2024. They suggest companies will use alternative deal structures like joint ventures, minority investments and licensing agreements in the near term. They also expect dealmakers to increasingly focus on margin accretion in M&A, rather than relying prominently on growth-driven dealmaking. It is not certain whether regulators will allow another megadeal such as the Pfizer acquisition of Seagen for 43Bn in Q1 2023. Although there may be a return of larger deals, there is likely to be continued interest in the $5 billion to $15 billion deals to fill targeted strategic gaps.


 

1Q24 BioPharma M&A Activity

The number of biopharma M&A deals more than doubled in the first quarter of 2024 compared to the same period a year ago, exemplifying a top exit route for pre-commercial companies vying for validation and attention. This is highlighted in a new report from Leerink Partners released this week which allied 13 biopharma M&A deals in the first quarter of 2024 compared to six in the first quarter of 2023. There were 47 deals in the last twelve months through March 2024, compared to 42 through March 2023.


 

Vertex Pharmaceuticals announced it has agreed to acquire Alpine Immune Sciences, a clinical-stage immunotherapy company, for $4.9 billion. The companies report specified on Wednesday that Vertex is to pay $65 a share for Alpine in an all-cash transaction to augment its pipeline of candidates for autoimmune and inflammatory diseases. Net of expected cash to be acquired, the deal is estimated at $4.6 billion, expected closing Q2. Alpine’s lead asset povetacicept, a dual antagonist of the BAFF and APRIL cytokines, currently in a Phase II study in IgA nephropathy, has shown best-in-class potential, Vertex reported. The updated clinical data for the drug showed reduction of the urine protein-to-creatinine ratio by 64.1% in 41 patients at 36 weeks as well as stable renal function. All patients also demonstrated resolution of hematuria with 67% reaching disease remission. Provetacicept is expected to enter Phase III assessments later this year.


 

Incyte buys Escient for $750 million. Incyte’s acquisition of Escient Pharmaceuticals is subsequent to a licensing deal for additional rights to MorphoSys’ cancer drug Monjuvi earlier this year. The deal secures Escient’s control of a pipeline led by clinical-phase treatments of atopic dermatitis and other skin conditions. The company’s lead asset, EP262, is an antagonist of Mas-related G protein-coupled receptor X2 (MRGPRX2), currently in Phase Ib/II trials. The company is also developing a MRGPRX4 antagonist in cholestatic pruritus and uremic pruritus. The same day Incyte absorbed Monjuvi, Novartis bought the rest of MorphoSys for $2.9 billion. In a phase 1 healthy volunteers study, EP262 was well tolerated, showing a lower rate of treatment-emergent side effects compared to placebo. Prior preclinical data demonstrated that the drug alleviated lesions and inflammation akin to atopic dermatitis.

 

 

1Q24 Raises

 

The first quarter saw a hopeful glimmer in the IPO markets with a handful of companies announcing plans for their initial public offering. When considering all companies looking to raise funds from public markets, there were a total of 54 registered offerings and 17 PIPEs raking in a combined $17 billion in proceeds.


Seven companies raised IPOs, bringing in roughly $1.5 billion, most of which occurred between mid-January through to the mid-February. More than half of the amount raised came from CG Oncology and Kyverna Therapeutics, which brought in around $800 million combined. 


CG Oncology


In the first biotech IPO of 2024, CG Oncology exceeds its own estimates with a total transaction value of $380 million and net proceeds of $353.4 million, reports S&P Capital IQ. This places CG Oncology at the top of the IPO scale, based on 2023 standards. Despite estimating a share price between $16 and $18, the company sold their stock for $19 apiece. More profits from the IPO could follow if underwriters take up their 30-day option to buy 3 million more shares. With the heightened share price, this would result in a further $57 million. The only biotech that has gone beyond this level was Acelyrin last year, which generated $540 million in May 2023.



Kyverna IPO, the autoimmune cell therapy developer, is the fifth start-up to go public in 2024. The biotech raised $319 million in their first public offering. The company sold 14.5 million shared at $22 apiece, significantly higher than expected. The offering made by Kyverna demonstrates that certain investors envisage a future in which cell therapies can be utilized to treat autoimmune diseases, as well as blood cancers.

 



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