JPM kicks off with takeovers by J&J, Novartis, and MSD

The slew of news from the JP Morgan Healthcare conference that started this morning started with a trio of takeover deals from Johnson & Johnson, Novartis, and MSD.

J&J’s $2 billion play for Californian antibody-drug conjugate (ADC) specialist Ambrx is the largest of the three, and came alongside confirmation of a rumoured takeover of Harpoon Therapeutics and its T-cell engager pipeline by MSD – now confirmed at $680 million – and a $425 million offer by Novartis for Calypso Biotech and its antibody drug for autoimmune diseases.

The $28-per-share, all-cash Ambrx deal is the latest in a lengthening list of M&A and licensing agreements in the ADC category, and if completed will give J&J a pipeline of ADCs headed by ARX517, a PSMA-directed ADC in early clinical testing for metastatic castration-resistant prostate cancer (mCRPC) that will complement J&J’s blockbuster prostate cancer drug Zytiga (abiraterone acetate), which is now facing generic competition.

Following after are HER2-targeting ARX788 for metastatic HER2-positive breast cancer – which would compete with AstraZeneca and Daiichi Sankyo’s already-marketed Enhertu (trastuzumab deruxtecan) – and ARX305, which targets CD70 and is in development for renal cell carcinoma (RCC), the most common form of kidney cancer.

J&J said that the Ambrx ADC-generating platform can create stable drugs that are less likely to release their cytotoxic payloads early, which should help limit off-target toxicities - a common problem with early ASC candidates.

The deal suggests that the huge appetite among pharma companies for ADC assets that was evident in the last couple of years shows no signs of slowing down. Last year, Pfizer closed a $43 billion acquisition of ADC pioneer Seagen, while AbbVie bought Immunogen for $10.1 billion and MSD paid $4 billion upfront for rights to three candidates developed by Daiichi Sankyo.

MSD’s play for Harpoon Therapeutics had been rumoured ahead of the announcement and was confirmed today as a $23-per-share offer that values the company at $680 million.

It gives MSD (known as Merck & Co in North America) a pipeline of T-cell engagers based on trispecific proteins led by DLL3-targeting HPN328 for small cell lung cancer (SCLC), neuroendocrine prostate cancer (NEPC), and other neuroendocrine tumours and BCMA-directed HPN217 for multiple myeloma, in phase 1/2 and phase 1 testing, respectively.

“At Merck, we continue to enhance our oncology pipeline through strategic acquisitions that complement our current portfolio and advance breakthrough science to help address the needs of people with cancer worldwide,” said Dr Dean Li, president of Merck Research Laboratories.

“We look forward to further evaluating HPN328 in innovative combinations with other pipeline candidates,” he added.

Novartis, meanwhile, announced it will pay $250 million upfront to buy Netherlands biotech Calypso and CALY-002, an anti-IL-15 monoclonal antibody currently in phase 1b testing, with another $175 million in potential milestone payments tied to development objectives.

IL-15 is thought to be a pivotal cytokine with pathological consequences in a wide range of autoimmune diseases, and CALY-002 is currently being tested in coeliac disease and eosinophilic oesophagitis. With Novartis on board, the scope of that clinical programme is likely to be expanded rapidly.

Merck KGaA spin-out Calypso said that Novartis’ involvement “CALY-002 is in the best position to be developed effectively, so that it can promptly address unmet medical needs in multiple indications.”

Novartis also announced another agreement as JPM got underway, namely a licensing deal with China’s Shanghai Argo Biopharmaceutical covering two RNAi interference (RNAi) therapies in the cardiovascular and metabolic diseases area.

That agreement covers two clinical-stage cardiovascular programmes in phase 1/2a and phase 1, plus an option on two other drug targets, and has a combined potential value of up to $4.165 billion for Argo, plus royalties if any of the candidates reach the market.