- A positive readout on Biomarin Pharmaceutical’s late-stage hemophilia A therapy Valrox could have a significant impact on potential M&A opportunities in the hematology space. The company is expected to provide a top line update on critical clinical measures associated with Valrox before June 7.
- Valrox’s success could also potentially attract significant M&A interest not just in Biomarin, but also other credible players pursuing similar gene-therapy approaches for hemophilia. In addition to Valrox, other promising gene-therapy candidates for hemophilia A include Sangamo Therapeutics’ SB-525 and Spark Therapeutics’ SPK-8011.
- Both Sangamo and Spark/Roche have demonstrated early success with their respective gene-therapy hemophilia candidates. With Spark largely out of the M&A picture given its pending merger with Roche, Biomarin and Sangamo have emerged as attractive targets in the hematology space for potential acquirers looking to expand their gene-therapy portfolio.
- In this context, natural suitors include pharma giants with deep pockets, such as Novartis. Novartis CEO Vas Narsiman recently stated that the company’s main goal is to build upon “advanced therapy platforms where we want to lead” and that “bolt-on M&A has to be part of that strategy.”
- With Biomarin boasting a robust manufacturing base in addition to a late-stage drug in Valrox, which could be commercialized as early as next year, the company fits Novartis’ “bolts-on M&A” approach. But its $15 billion market cap and additional premium consideration could sway bigger players that are looking to expand their gene therapy portfolio to instead bet on Sangamo and its own hemophilia therapy.
A positive readout on Valrox, the late-stage hemophilia A therapy currently under development by Biomarin Pharmaceutical, could have a significant impact on potential M&A opportunities in the hematology space. as the biotech industry awaits the release of its pivotal phase 2 data.
Valrox remains the leading candidate in the race to capture a highly lucrative global hemophilia market, the value of which is currently estimated at roughly $30 to 90 billion, based on approximately 117,000 patients worldwide.
In a recent investor call
, Biomarin’s worldwide research head, Dr. Henry Fuchs, informed participants that the company would provide a top-line update on critical clinical measures associated with Valrox before June 7. While Valrox has demonstrated very promising results in Phase 1 and 2 trials in the past, the key test will come next month when the company releases Phase 2 data at year three, which it hopes will confirm the gene therapy's long-term durability and safety.
If indeed Valrox in year three demonstrates sustained high blood coagulation factor levels - the deficiency of which is the main cause of hemophilia - it will provide a significant boost to Biomarin’s chances of securing regulatory approval from the FDA at an accelerated timeline. Such a development could mean Valrox coming to market by 2020, creating pressure on competitors to develop their own treatments.
Valrox’s success could also potentially attract significant M&A interest not just in Biomarin, but also in other credible players pursuing similar gene-therapy approaches for hemophilia.
Valrox’s Success Could Ignite M&A Interest in Hematology
In addition to Valrox, other promising gene-therapy candidates include Sangamo Therapeutics’ SB-525 and Spark Therapeutics’ SPK-8011.
The measure of success for various gene-therapy candidates in treating Hemophilia A - a bleeding disorder caused by a deficiency of coagulation factor VIII (FVIII) function due to mutations in the F8 gene - lies in increasing and then safely maintaining high FVIII levels for longer periods of time.
In a conference call
last month, Sangamo announced positive early results associated with its gene-therapy candidate, SB-525. Last year, the company and its collaboration partner, Pfizer, reported certain patients receiving a higher dose of SB-525. Based on the most recent information shared by Sangamo, as of March 27, these patients have not needed any clotting factor replacement infusions for 12 weeks.
These results indicate early success for the treatment, but Sangamo will need to prove that SB-525 has a lasting impact on patients, thus scoring high on the “durability” measure. This is especially critical if Valrox and other competitor drugs demonstrate greater durability and a higher safety score.
Similarly, Spark Therapeutics’ SPK-8011 has demonstrated early success, with two of its patients showing clotting factor activity around 12% and 22% of the norm, which stayed steady through 52 weeks. Despite a few safety setbacks last year, the promise exhibited by SPK-8011 may have played a key role in Roche making a bid for the company earlier this year.
Now with Spark largely out of the M&A picture, Biomarin and Sangamo have emerged as key players in the hematology space for potential acquirers looking to expand their gene-therapy portfolio. In this context, pharma giants with deep pockets, such as Novartis, are natural suitors.
Indeed, Novartis CEO Vas Narsiman indicated recently that the company’s main goal is to build upon “advanced therapy platforms where we want to lead” and that a “bolt-on M&A has to be part of that strategy.” Narsimhan expressed that Novartis may be looking “to do M&A in the range of up to 5% of our market cap,” which would amount to $10 billion.
With Biomarin boasting a robust manufacturing base in addition to a late-stage blockbuster drug in Valrox, which could be commercialized as early as next year, the company fits Narsimhan’s “bolt-on M&A” approach. However, with a $15 billion market-cap and additional premium consideration, the price tag may just be too high, even for Novartis.
Therefore, a company like Sangamo, which is making steady progress with its hemophilia therapy SB-525 - a treatment that may eventually compete with those of Spark/Roche and Biomarin - could emerge as an attractive M&A bet for bigger players like Novartis looking to expand their gene therapy portfolio. With the Avexis acquisition already completed, a smaller-sized deal (Sangamo commands a market cap of $1.36 billion) could complement Novartis’ previous gene-therapy acquisitions.
Other major players, like Pfizer and Sanofi, are already partnering with Sangamo to develop various gene-therapy candidates for a range of indications, including hemophilia and sickle cell disease. A potential bid from outside suitors such as Novartis could therefore push Sangamo’s bigger partners to consider making a play for the company’s promising drug pipeline as well.
--Shrey Verma and Matt Tracy