Sorry for the lack of formatting but many points of the article raised my eyebrows. Old story of seeing what one wants to see but Biogen seem to have their eye on something since they have had a change of heart, maybe they would like the 5-8 range but further on in the article, they know it might take 10.
Biogen appears to be subtly signaling it has a larger appetite for M&A than previously stated.
In an exclusive interview with Endpoints News, Biogen head of corporate development Adam Keeney said the company is open to a “$5 billion to $8 billion” acquisition similar to last year’s Reata Pharmaceuticals deal, should the right opportunity present itself.
Back in April, CEO Chris Viehbacher told investors during the company’s first-quarter conference call that M&A would be limited this year after it spent $7.3 billion to buy Reata in 2023.Chris ViehbacherWhen asked about the change in direction, Keeney said Biogen is looking for acquisitions. Whether the company “pulls the trigger” depends on a combination of “our balance sheet but also our conviction” in a buyout, he added.“My team is very actively monitoring the landscape,” Keeney said. “Of course, some of these opportunities unlock when data presents itself. That data might be this year. It could be next. And as we go longer into next year, then the balance sheet only gets stronger.”
During the call in April, Viehbacher said most business development in 2024 would be likely limited to licensing deals or smaller buyouts. Shortly afterward, Biogen announced a $1.15 billion acquisition of HI-Bio in May, a deal that’s expected to close next week.“I don’t think, where we sit right now, we’d be thinking about doing anything this year on an acquisition front,” Viehbacher said on April 24.Michael McDonnellBut at two investor conferences earlier this month, other Biogen execs hinted at a more active M&A year. At the Jefferies Global Healthcare Conference, CFO Michael McDonnell said June 5 that Biogen has roughly $8 billion to $10 billion to spend on “incremental BD” over the next two years.
He reiterated those comments to Bloomberg News earlier this week.And on June 12, at the Goldman Sachs Global Healthcare Conference, head of investor relations Chuck Triano said the company is casting a “wide net” for growth.“We’re not sitting here and saying we have everything we need in-house,” Triano said.Affinity for rare disease?Keeney said Biogen isn’t looking for deals in a specific disease area or with companies using a particular drug mechanism. But he discussed how the FDA has become friendlier toward certain categories, namely rare diseases.“We particularly like rare disease, not only as a therapeutic area, but actually as a business model,” Keeney said.That was one of the reasons for buying HI-Bio, which is developing treatments for a range of kidney and autoimmune diseases. Keeney emphasized how advancements in nephrology over the last 20 years have boosted the case for proteinuria’s use as a surrogate biomarker to predict a clinical benefit in end-stage renal disease.
He also pointed to Ultragenyx and Denali’s work in the MPS group of rare genetic diseases as good examples of clearer paths to approval. Both companies are using biomarkers in the cerebrospinal fluid.“We can apply that logic — whether it be MPS, ALS, nephrology, IgAN and other nephrology diseases — to a whole host of other rare diseases and come to the same conclusion that if we can find the right assets within those areas, that we’ve got a better understanding of how they can be developed from a regulatory standpoint,” Keeney said.(Asked if Biogen had held buyout discussions with Ultragenyx or Denali, Keeney quickly clarified that Biogen has not, though Biogen has partnered with Denali on Alzheimer’s and Parkinson’s disease programs.)
Biogen isn’t ruling out licensing deals either, and Keeney noted the company’s ability to be flexible depending on the partner or program. Not every company that wants to work with Biogen is seeking a buyout, he noted.Keeney’s comments echo similar remarks he made to Fierce Biotech in March when discussing how Biogen can diversify its pipeline. At the time, he said future deals would likely be in the bolt-on range and smaller than the Reata deal.
NEU Price at posting:
$20.62 Sentiment: Buy Disclosure: Held
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