How cell and gene therapies are transforming pharma deal-making
After decades of clinical research targeting the development of more “personalized” medicines, the biotechnology sector is now starting to deliver with the first generation of promising new cell and gene therapies.
Whether the optimism about the impact of these therapies plays out as expected or not, advances in this area of research are also having a significant effect on the pace of deal-making in the life sciences sector.
As many investigational cell and gene therapies continue to advance and demonstrate their clinical and commercial potential, companies including smaller biotechnology firms and larger pharmaceutical companies are positioning themselves for opportunities to acquire assets or develop collaborative relationships to take advantage of these new technologies.
Given that the development of cell and gene therapies is still in its nascent stages and uncertainties remain about their long-term potential, some industry insiders have questions about the risks involved and how financial deals related to these drugs should be structured.
To better understand deal-making trends related to cell and gene therapies, we conducted an analysis of the recent activity in the sector.
We reviewed more than 30 mergers, acquisitions, and licensing agreements executed between 2016-2019 and compared them to deals that were executed for the previous generation of breakthrough therapies, including monoclonal antibodies (mAbs).
In this analysis, we considered a range of factors including the size of the companies involved, target indications, deal structures, terms such as upfront payments and royalties, and the number and clinical stage of assets included in each deal.
“One key difference in cell and gene therapy deals is that companies prefer to target partnerships and licensing deals. This shift may be a reflection of the unique challenges in the development of these drugs”
The review shows that overall the pace of deal-making in cell and gene therapy is faster and occurring much earlier in the drug development process compared to deals seen in the past.
More deals and earlier deals
The pace of deals in the cell and gene therapy sector has been building in momentum since the first of these drugs received regulatory approval nearly a decade ago. From 2010-2016 alone, pharmaceutical companies executed more than 50 partnerships and investments to access cell and gene therapies.
Larger companies have often been involved in these deals from the beginning. In 2010, Novartis established a partnership deal with GenVec worth potentially $213M (excluding royalties) for the development of adenovirus-based gene therapies. That same year Novartis also formed a strategic alliance with GlaxoSmithKline and the Telethon Institute of Gene Therapy (TIGET) to pursue additional gene therapy research and development.
Unlike deals made decades ago related to mAbs, larger pharmaceutical companies are not waiting for the cell and gene therapy sector to become well established before pursuing partnerships or M&A deals.
With mAbs, financial deals were often characterized by the acquisitions of late-stage and marketed products, significantly reducing levels of risk. Conversely, acquisitions and other deals in the cell and gene therapy space often include entire product pipelines, platform technologies, and manufacturing capabilities with the potential to deliver significant clinical value and commercial potential.
Written by: Lev Gerlovin & Lev Gerlovin
Published on: January 27, 2020