Deal analysis part one – the bad

The recent blow-up of Gilead’s magrolimab raised major questions about the $4.9bn purchase of the project’s originator, Forty Seven. An evaluation of deals listed on OncologyPipeline has found that the Forty Seven transaction stands with AbbVie's purchase of Stemcentrx and Takeda's takeover of Ariad among the most dubious of recent years.

In giving a verdict on a transaction, ApexOnco weighed up the acquirer’s outlay against the success or failure of the key projects gained, an admittedly unscientific analysis that looked at large oncology M&A and licensing agreements since 2016. Gilead's deal-making is under the microscope also because of the expensive acquisition of Immunomedics, but there are plenty more contenders for the wooden spoon.

Indeed, ApexOnco deemed the worst deal of the period to be AbbVie’s takeout of Stemcentrx, whose end was similarly ignominious to magrolimab's, but which involved a higher up-front fee than Forty Seven. 

While it's too soon to give a verdict on many deals surveyed, plenty have already fallen by the wayside, and of the deals that can be assessed there are many more bad than good. This first analysis in a three-part series focuses on the worst of these transactions.

The worst notable oncology deals since 2016

Note: *licensing deal. Source: OncologyPipeline.

On the measures used, both the Stemcentrx and Forty Seven acquisitions were clear-cut failures for the purpose of this analysis, which by its nature was subjective. ApexOnco scoured oncology deals of over $1bn – plus a couple of notable ones that fell slightly short of this valuation – and rated them, from good to undecided to bad, based on a number of criteria including clinical and commercial success, and up-front spend.

Hence the inclusion of Gilead’s $21bn swoop for Immunomedics and its marketed Trop2-targeting ADC Trodelvy. Perhaps this deal wasn't a disaster – Gilead has managed to expand Trodelvy’s use from its original late-line triple-negative breast cancer niche – but data in hormone receptor-positive, HER2-negative breast cancer underwhelmed, and the product has been hit by competition from AstraZeneca/Daiichi’s Enhertu. 

The bottom line is that, though Trodelvy became a blockbuster in 2023, it still has a lot to do to justify the Immunomedics price tag. Takeda’s takeout of Ariad also looks expensive given the lacklustre drugs involved. 

Clinical blow-ups

Most of the other big disappointments ended in clinical trial failure. 2018 was dubbed the year of the cytokine, with big players like Bristol Myers Squibb, Lilly and Sanofi clamouring to get into the space. However, all three of these groups’ cytokine-based deals have blown up – the most notable being Bristol’s licensing of Nektar’s bempegaldesleukin for $1.9bn, which kicked off the cytokine craze. 

Sanofi still believes that the Synthorx-originated IL-2 pegenzileukin could have a future, and has gone back to the dosing drawing board with the phase 1/2 Hammer trial. But after other cytokine failures its chances look slim.

In other once-hot areas, Novartis pulled out of a deal for BeiGene’s anti-TIGIT MAb ociperlimab last July, then a couple of months later ditched BeiGene’s PD-1 blocker tislelizumab. The latter deal, worth $650m up front, came as Novartis turned away from its own checkpoint inhibitor spartalizumab. This immuno-oncology foray looks like an expensive mistake, with the Swiss group’s pipeline now dominated by radiopharmaceuticals.

Another big partner to leave its smaller collaborator was Roche with Blueprint’s Gavreto. However, during its fourth-quarter results last week Blueprint said it had identified a new partner for the RET inhibitor, which has seen disappointing sales.

Meanwhile, Pfizer’s purchase of Trillium, another attempt to get on the CD47 bandwagon, was included owing to the big pharma’s apparent cooling on the assets involved, maplirpacept and ontorpacept, against the backdrop of other CD47 missteps.

Both projects are still in play, but neither was highlighted in Pfizer’s 2023 fourth-quarter results presentation; that was a far cry from 2022, when the big pharma talked up maplirpacept’s potential as a $3bn-plus therapy.

Still, as will be seen in a future analysis, deals can pay off, driving many groups to take on the risks associated with large transactions. And internal R&D comes at its own costs, too.

This is the first of a series of deal analyses. Stay tuned for future stories.