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Biogen says it’s ready for ‘highly active’ dealmaking

April 22, 2017
  • $300 million deal with Bristol just the beginning, exec says
  • Drugmaker facing competition for multiple sclerosis treatments

Biogen Inc. is ready to make some deals.

“We’re moving, and we’re back in terms of augmenting the pipeline,” research and development head Michael Ehlers said Friday in an interview. An agreement last week to pay Bristol-Myers Squibb Co. $300 million upfront for an experimental Alzheimer’s drug is “hopefully just the beginning of a set of very rigorous but highly active deals.”

Biogen’s deal with Bristol-Myers was its largest addition to its pipeline in ten years, Ehlers said, and followed analysts’ criticism that the drugmaker wasn’t doing enough M&A. The drugmaker is looking to build new sources of growth as sales slow for its core products that treat the neurological disease multiple sclerosis. Competition is heating up, with Roche Holding AG’s Ocrevus winning U.S. approval last month, which analysts have said is likely to erode Biogen’s dominant position.

Betting heavily on treatments for severe brain and nerve diseases, Biogen is running several late-stage trials in Alzheimer’s disease. While the company wants to buy potential therapies before they’ve been fully shown to work, Ehlers said, it’s also weighing deals for drugs in the later stages of development — which might cost more to acquire.

Drug Mechanism

Critical to any deal is understanding the science behind a drug and why it would help specific patient groups, Ehlers said. Understanding the mechanisms behind neurological and psychiatric drugs has been “one of the biggest problems, but we’re entering an era where we might be getting much better at that,” he said.

He pointed to a drug study from biotechnology company Sage Therapeutics Inc. in postpartum depression, which he called “very interesting.” In the study, Sage was able to achieve quick results by targeting a well understood neurological pathway in a specific group of patients, which Ehlers said has long been an elusive goal. Sage rose as much as 1.8 percent after the comment and traded up 1.7 percent to $72.84 at 3:32 p.m. in New York. Biogen declined less than 1 percent to $271.90.

Chronic pain and eye diseases are also areas of interest for Biogen, Ehlers said.

The company is looking to repeat the success it’s had with Spinraza, a treatment for a rare and deadly muscle disease called spinal muscular atrophy that mainly affects babies and children. Biogen acquired the rights to it through a co-development deal with Ionis Pharmaceuticals Inc., which Ehlers sees as a template.

“I don’t think anyone would have thought a few years ago that we’d have the kind of breakthrough in spinal muscular atrophy that we have today,” Ehlers, who joinedBiogen just under a year ago, said in the interview at its Cambridge, Massachusetts headquarters. “I don’t think anyone even at Biogen would’ve said that this would be a major growth driver for us.”

Biogen will report its first-quarter earnings next week.

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