Why Glaxo should buy Biohaven

Biohaven showed yesterday that not all small business launches end in disaster. And impressive second-quarter sales of its oral migraine treatment, Nurtec ODT, will only increase speculation the group could be a buyout target.

One company that might well consider buying Biohaven is Glaxosmithkline, which needs fresh blood to appease activist investor Elliott Management. Biohaven would be a perfect fit for Glaxo’s primary care focus, and the British group is already present in the treatment of migraine with triptan Imitrex. However, having doubled in value in the past 12 months, Biohaven could now be considered overpriced.

Glaxo could still afford to digest Biohaven, but the question is whether it would be worth it: Nurtec ODT’s net present value, as calculated by Evaluate Omnium, is $ 3 billion, compared to Biohaven’s market cap of $ 7 billion. Yet Glaxo has already shown that it is open to controversial deals; This is evidenced by the acquisition of Tesaro, which now seems to be bearing fruit.

MRNA M&A?

If not Biohaven, what other groups could try Glaxo? The company has made no secret of its desire to pursue mRNA vaccines, and the only real option here is German Curevac. The companies are already working together on a multivalent Covid-19 vaccine and a flu vaccine, with plans also to develop a universal flu vaccine.

The competition is already shaping up to be fierce, with Moderna and Sanofi / Translate Bio recently welcoming influenza candidates to the clinic.

However, the German government’s stake in Curevac could prevent a takeover. In addition, there are now doubts about the group’s technology following poor results with its first generation Covid-19 vaccine. Curevac’s stock has plunged, but the group is still not cheap.

Perhaps surprisingly, there could be better business to be done in oncology, an area in which Glaxo is keen to establish a presence.

What could Glaxo buy next?
Society Zoned Notable product / project and status Market capitalization
Curévac mRNA vaccines CVnCoV, ph2 / 3 data reported $ 11.2 billion
Biohaven SNC Nurtec ODT, approved for the prevention and treatment of migraine $ 7.3 billion
Therapeutic turning point Oncology Repotrectinib, ph2 data reported $ 3.5 billion
Adaptimmun Oncology Letétresgène-autoleucel, ph2 * $ 624 million
Alpine immune sciences Oncology ALPN-202, ph1 data reported $ 206 million
* In partnership with Glaxo. Source: Evaluate Pharma.

A withdrawal from Turning Point Therapeutics would give Glaxo the targeted Ros1 / NTRK repotrectinib project and set up a battle with Roche and Pfizer. Updated data from the Trident-1 repo trial, presented in January at the World Lung meeting, could have addressed concerns about durability; however, the number of patients is still low.

Cheaper still are Adaptimmune and Alpine Immune Sciences. Glaxo already has an agreement with the first on T cell receptor therapy targeting NY-ESO letetresgene-autoleucel, which recently received a vote of confidence when Glaxo discontinued another NY-ESO active from Immunocore.

Additionally, data presented to Asco suggests that Adaptimmune has found a way around previously observed toxicity with its main solo project, afamitresgene autoleucel, making it the first approved modified TCR therapy.

Alpine, meanwhile, is the only small group with a clinically-stage CD28 targeting active without a partnership – a mechanism on which Regeneron will grow.

As for Glaxo’s other areas of interest, infectious diseases are a given given the success of the group’s HIV joint venture, Viiv. A working cure for hepatitis B is the next frontier in infectious disease; However, Glaxo is collaborating here with Ionis, which seems unlikely given its various other large pharmaceutical partners.

Of course, Glaxo could go off-piste, and it’s worth noting that his most recent deal, with Alector, was in neurodegenerative diseases, not an area in which he has existing expertise.

Glaxo having highlighted business development as a top priority during its recent Investor Day, the group will likely close more deals soon. Who’s next?


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