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Lesson 4 Cell Signaling And Motility: G Proteins, Signal Transduction: Curations and Articles of reference as supplemental information: #TUBiol3373
Curator: Stephen J. Williams, Ph.D.
Updated 7/15/2019
Below please find the link to the Powerpoint presentation for lesson #4 for #TUBiol3373. The lesson first competes the discussion on G Protein Coupled Receptors, including how cells terminate cell signals. Included are mechanisms of receptor desensitization. Please NOTE that desensitization mechanisms like B arrestin decoupling of G proteins and receptor endocytosis occur after REPEATED and HIGH exposures to agonist. Hydrolysis of GTP of the alpha subunit of G proteins, removal of agonist, and the action of phosphodiesterase on the second messenger (cAMP or cGMP) is what results in the downslope of the effect curve, the termination of the signal after agonist-receptor interaction.
Tumor Ammonia Recycling: How Cancer Cells Use Glutamate Dehydrogenase to Recycle Tumor Microenvironment Waste Products for Biosynthesis
Reporter: Stephen J. Williams, PhD
A feature of the tumorigenic process is the rewiring of the metabolic processes that provides a tumor cell the ability to grow and thrive in conditions of limiting nutrients as well as the ability to utilize waste products in salvage pathways for production of new biomass (amino acids, nucleic acids etc.) required for cellular growth and division 1-8. A Science article from Spinelli et al. 9 (and corresponding Perspective article in the same issue by Dr. Chi V. Dang entitled Feeding Frenzy for Cancer Cells10) describes the mechanism by which estrogen-receptor positive (ER+) breast cancer cells convert glutamine to glutamate, release ammonia into the tumor microenvironment, diffuses into tumor cells and eventually recycle this ammonia by reductive amination of a-ketoglutarate by glutamate dehydrogenase (GDH) to produce glutamic acid and subsequent other amino acids needed for biomass production. Ammonia can accumulate in the tumor microenvironment in poorly vascularized tumor. Thus ammonia becomes an important nitrogen source for tumor cells.
Mammalian cells have a variety of mechanisms to metabolize ammonia including
Glutamate synthetase (GS) in the liver can incorporate ammonia into glutamate to form glutamine
glutamate dehydrogenase (GDH) converts glutamate to a-ketoglutarate and ammonia under allosteric regulation (discussed in a post on this site by Dr. Larry H. Berstein; subsection Drugging Glutaminolysis)
the reverse reaction of GDH, which was found to occur in ER+ breast cancer cells, a reductive amination of a-ketoglutarate to glutamate11, is similar to the reductive carboxylation of a-ketoglutarate to citrate by isocitrate dehydrogenase (IDH) for fatty acid synthesis (IDH is overexpressed in many tumor types including cancer stem cells 12-15), and involved in immune response and has been developed as a therapeutic target for various cancers. IDH mutations were shown to possess the neomorphic activity to generate the oncometabolite, 2-hydroxyglutarate (2HG) 16-18. With a single codon substitution, the kinetic properties of the mutant IDH isozyme are significantly altered, resulting in an obligatory sequential ordered reaction in the reverse direction 19.
In the Science paper, Spinelli et al. report that ER+ breast cancer cells have the ability to utilize ammonia sources from their surroundings in order to produce amino acids and biomass as these ER+ breast cancer cells have elevated levels of GS and GDH with respect to other breast cancer histotypes.
GDH was elevated in ER+ luminal cancer cells and the quiescent epithelial cells in organoid culture
However proliferative cells were dependent on transaminases, which transfers nitrogen from glutamate to pyruvate or oxaloacetate to form a-ketoglutarate and alanine or aspartate. a-ketoglutarate is further metabolized in the citric acid cycle.
Spinelli et al. showed GDH is necessary for ammonia reductive incorporation into a-ketoglutarate and also required for ER+ breast cancer cell growth in immunocompromised mice.
In addition, as commented by Dr. Dang in his associated Perspectives article, (quotes indent)
The metabolic tumor microenvironment produced by resident cells, such as fibroblasts and macrophages, can create an immunosuppressive environment 20. Hence, it will be of great interest to further understand whether products such as ammonia could affect tumor immunity or induce autophagy (end quote indent)
Figure 2. Tumor ammonia recycling. Source: From Chi V. Dang Feeding Frenzy for cancer cells. Rights from RightsLink (copyright.com)
Science 17 Nov 2017:Vol. 358, Issue 6365, pp. 941-946 DOI: 10.1126/science.aam9305
Abstract
Ammonia is a ubiquitous by-product of cellular metabolism; however, the biological consequences of ammonia production are not fully understood, especially in cancer. We found that ammonia is not merely a toxic waste product but is recycled into central amino acid metabolism to maximize nitrogen utilization. In our experiments, human breast cancer cells primarily assimilated ammonia through reductive amination catalyzed by glutamate dehydrogenase (GDH); secondary reactions enabled other amino acids, such as proline and aspartate, to directly acquire this nitrogen. Metabolic recycling of ammonia accelerated proliferation of breast cancer. In mice, ammonia accumulated in the tumor microenvironment and was used directly to generate amino acids through GDH activity. These data show that ammonia is not only a secreted waste product but also a fundamental nitrogen source that can support tumor biomass.
References
1 Strickaert, A. et al. Cancer heterogeneity is not compatible with one unique cancer cell metabolic map. Oncogene36, 2637-2642, doi:10.1038/onc.2016.411 (2017).
2 Hui, S. et al. Glucose feeds the TCA cycle via circulating lactate. Nature551, 115-118, doi:10.1038/nature24057 (2017).
3 Mashimo, T. et al. Acetate is a bioenergetic substrate for human glioblastoma and brain metastases. Cell159, 1603-1614, doi:10.1016/j.cell.2014.11.025 (2014).
4 Sousa, C. M. et al. Erratum: Pancreatic stellate cells support tumour metabolism through autophagic alanine secretion. Nature540, 150, doi:10.1038/nature19851 (2016).
5 Sousa, C. M. et al. Pancreatic stellate cells support tumour metabolism through autophagic alanine secretion. Nature536, 479-483, doi:10.1038/nature19084 (2016).
6 Commisso, C. et al. Macropinocytosis of protein is an amino acid supply route in Ras-transformed cells. Nature497, 633-637, doi:10.1038/nature12138 (2013).
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8 Hanahan, D. & Weinberg, R. A. Hallmarks of cancer: the next generation. Cell144, 646-674, doi:10.1016/j.cell.2011.02.013 (2011).
9 Spinelli, J. B. et al. Metabolic recycling of ammonia via glutamate dehydrogenase supports breast cancer biomass. Science358, 941-946, doi:10.1126/science.aam9305 (2017).
10 Dang, C. V. Feeding frenzy for cancer cells. Science358, 862-863, doi:10.1126/science.aaq1070 (2017).
11 Smith, T. J. & Stanley, C. A. Untangling the glutamate dehydrogenase allosteric nightmare. Trends in biochemical sciences33, 557-564, doi:10.1016/j.tibs.2008.07.007 (2008).
12 Metallo, C. M. et al. Reductive glutamine metabolism by IDH1 mediates lipogenesis under hypoxia. Nature481, 380-384, doi:10.1038/nature10602 (2011).
13 Garrett, M. et al. Metabolic characterization of isocitrate dehydrogenase (IDH) mutant and IDH wildtype gliomaspheres uncovers cell type-specific vulnerabilities. Cancer & metabolism6, 4, doi:10.1186/s40170-018-0177-4 (2018).
14 Calvert, A. E. et al. Cancer-Associated IDH1 Promotes Growth and Resistance to Targeted Therapies in the Absence of Mutation. Cell reports19, 1858-1873, doi:10.1016/j.celrep.2017.05.014 (2017).
15 Sciacovelli, M. & Frezza, C. Metabolic reprogramming and epithelial-to-mesenchymal transition in cancer. The FEBS journal284, 3132-3144, doi:10.1111/febs.14090 (2017).
16 Dang, L. et al. Cancer-associated IDH1 mutations produce 2-hydroxyglutarate. Nature462, 739-744, doi:10.1038/nature08617 (2009).
17 Gross, S. et al. Cancer-associated metabolite 2-hydroxyglutarate accumulates in acute myelogenous leukemia with isocitrate dehydrogenase 1 and 2 mutations. The Journal of experimental medicine207, 339-344, doi:10.1084/jem.20092506 (2010).
18 Ward, P. S. et al. The common feature of leukemia-associated IDH1 and IDH2 mutations is a neomorphic enzyme activity converting alpha-ketoglutarate to 2-hydroxyglutarate. Cancer cell17, 225-234, doi:10.1016/j.ccr.2010.01.020 (2010).
19 Rendina, A. R. et al. Mutant IDH1 enhances the production of 2-hydroxyglutarate due to its kinetic mechanism. Biochemistry52, 4563-4577, doi:10.1021/bi400514k (2013).
20 Zhang, X. et al. IDH mutant gliomas escape natural killer cell immune surveillance by downregulation of NKG2D ligand expression. Neuro-oncology18, 1402-1412, doi:10.1093/neuonc/now061 (2016).
Other articles on this Open Access Journal on Cancer Metabolism Include:
Today’s lesson 3 explains how extracellular signals are transduced (transmitted) into the cell through receptors to produce an agonist-driven event (effect). This lesson focused on signal transduction from agonist through G proteins (GTPases), and eventually to the effectors of the signal transduction process. Agonists such as small molecules like neurotransmitters, hormones, nitric oxide were discussed however later lectures will discuss more in detail the large growth factor signalings which occur through receptor tyrosine kinases and the Ras family of G proteins as well as mechanosignaling through Rho and Rac family of G proteins.
Transducers: The Heterotrimeric G Proteins (GTPases)
An excellent review of heterotrimeric G Proteins found in the brain is given by
Cyclic AMP is an important second messenger. It forms, as shown, when the membrane enzyme adenylyl cyclase is activated (as indicated, by the alpha subunit of a G protein).
The cyclic AMP then goes on the activate specific proteins. Some ion channels, for example, are gated by cyclic AMP. But an especially important protein activated by cyclic AMP is protein kinase A, which goes on the phosphorylate certain cellular proteins. The scheme below shows how cyclic AMP activates protein kinase A.
Updated 7/15/2019
Additional New Studies on Regulation of the Beta 2 Adrenergic Receptor
We had discussed regulation of the G protein coupled beta 2 adrenergic receptor by the B-AR receptor kinase (BARK)/B arrestin system which uncouples and desensitizes the receptor from its G protein system. In an article by Xiangyu Liu in Science in 2019, the authors describe another type of allosteric modulation (this time a POSITIVE allosteric modulation) in the intracellular loop 2. See below:
Mechanism of β2AR regulation by an intracellular positive allosteric modulator
Xiangyu Liu1,*, Ali Masoudi2,*, Alem W. Kahsai2,*, Li-Yin Huang2, Biswaranjan Pani2, Dean P. Staus2, Paul J. Shim2, Kunio Hirata3,4, Rishabh K. Simhal2, Allison M. Schwalb2, Paula K. Rambarat2, Seungkirl Ahn2, Robert J. Lefkowitz2,5,6,†, Brian Kobilka1
Positive reinforcement in a GPCR
Many drug discovery efforts focus on G protein–coupled receptors (GPCRs), a class of receptors that regulate many physiological processes. An exemplar is the β2-adrenergic receptor (β2AR), which is targeted by both blockers and agonists to treat cardiovascular and respiratory diseases. Most GPCR drugs target the primary (orthosteric) ligand binding site, but binding at allosteric sites can modulate activation. Because such allosteric sites are less conserved, they could possibly be targeted more specifically. Liu et al. report the crystal structure of β2AR bound to both an orthosteric agonist and a positive allosteric modulator that increases receptor activity. The structure suggests why the modulator compound is selective for β2AR over the closely related β1AR. Furthermore, the structure reveals that the modulator acts by enhancing orthosteric agonist binding and stabilizing the active conformation of the receptor.
Abstract
Drugs targeting the orthosteric, primary binding site of G protein–coupled receptors are the most common therapeutics. Allosteric binding sites, elsewhere on the receptors, are less well-defined, and so less exploited clinically. We report the crystal structure of the prototypic β2-adrenergic receptor in complex with an orthosteric agonist and compound-6FA, a positive allosteric modulator of this receptor. It binds on the receptor’s inner surface in a pocket created by intracellular loop 2 and transmembrane segments 3 and 4, stabilizing the loop in an α-helical conformation required to engage the G protein. Structural comparison explains the selectivity of the compound for β2– over the β1-adrenergic receptor. Diversity in location, mechanism, and selectivity of allosteric ligands provides potential to expand the range of receptor drugs.
Recent structures of GPCRs bound to allosteric modulators have revealed that receptor surfaces are decorated with diverse cavities and crevices that may serve as allosteric modulatory sites (1). This substantiates the notion that GPCRs are structurally plastic and can be modulated by a variety of allosteric ligands through distinct mechanisms (2-7). Most of these structures have been solved with negative allosteric modulators (NAMs), which stabilize receptors in their inactive states (1). To date, only a single structure of an active GPCR bound to a small-molecule positive allosteric modulator (PAM) has been reported, namely, the M2 muscarinic acetylcholine receptor with LY2119620 (8). Thus, mechanisms of PAMs and their potential binding sites remain largely unexplored.
Fig 1. Structure of the active state T4L-B2AR in complex with the orthosteric agonist BI-167107, nanobody 689, and compound 6FA. (A) The chemical structure of compound-6FA (Cmpd-6FA). (B) Isoproterenol (ISO) competition binding with 125I-cyanopindolol (CYP) to the β2AR reconstituted in nanodisks in the presence of vehicle (0.32% dimethylsulfoxide; DMSO), Cmpd-6, or Cmpd-6FA at 32 μM. Values were normalized to percentages of the maximal 125I-CYP binding level obtained from a one-site competition binding–log IC50 (median inhibitory concentration) curve fit. Binding curves were generated by GraphPad Prism. Points on curves represent mean ± SEM obtained from five independent experiments performed in duplicate. (C) Analysis of Cmpd-6FA interaction with the BI-167107–bound β2AR by ITC. Representative thermogram (inset) and binding isotherm, of three independent experiments, with the best titration curve fit are shown. Summary of thermodynamic parameters obtained by ITC: binding affinity (KD = 1.2 ± 0.1 μM), stoichiometry (N = 0.9 ± 0.1 sites), enthalpy (ΔH = 5.0 ± 1.2 kcal mol−1), and entropy (ΔS =13 ± 2.0 cal mol−1 deg−1). (D) Side view of T4L-β2AR bound to the orthosteric agonist BI-167107, nanobody 6B9 (Nb6B9), and Cmpd-6FA. The gray box indicates the membrane layer as defined by the OPM database. (E) Close-up view of Cmpd-6FA binding site. Covering Cmpd-6FA is 2Fo– Fc electron density contoured at 1.0 σ (green mesh).From Science 28 Jun 2019:
Vol. 364, Issue 6447, pp. 1283-1287
Fig 3. Fig. 3Mechanism of allosteric activation of the β2AR by Cmpd-6FA.
(A) Superposition of the inactive β2AR bound to the antagonist carazolol (PDB code: 2RH1) and the active β2AR bound to the agonist BI-167107, Cmpd-6FA, and Nb6B9. Close-up view of the Cmpd-6FA binding site is shown. The residues of the inactive (yellow) and active (blue) β2AR are depicted, and the hydrogen bond formed between Asp1303.49and Tyr141ICL2 in the active state is indicated by a black dashed line. (B) Topography of Cmpd-6FA binding surface on the active β2AR (left, blue) and the corresponding surface of the inactive β2AR (right, yellow) with Cmpd-6FA (orange sticks) docked on top. Molecular surfaces are of only those residues involved in interaction with Cmpd-6FA. Steric clash between Cmpd-6FA and the surface of inactive β2AR is represented by a purple asterisk. (C) Overlay of the β2AR bound to BI-167107, Nb6B9, and Cmpd-6FA with the β2AR–Gscomplex (PDB code: 3SN6). The inset shows the position of Phe139ICL2 relative to the α subunit of Gs. (D) Superposition of the active β2AR bound to the agonist BI-167107, Nb6B9, and Cmpd-6FA (blue) with the inactive β2AR bound to carazolol (yellow) (PDB code: 2RH1) as viewed from the cytoplasm. For clarity, Nb6B9 and the orthosteric ligands are omitted. The arrows indicate shifts in the intracellular ends of the TM helices 3, 5, and 6 upon activation and their relative distances.
Allosteric sites may not face the same evolutionary pressure as do orthosteric sites, and thus are more divergent across subtypes within a receptor family (24–26). Therefore, allosteric sites may provide a greater source of specificity for targeting GPCRs.
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Additional information on Nitric Oxide as a Cellular Signal
Nitric oxide is actually a free radical and can react with other free radicals, resulting in a very short half life (only a few seconds) and so in the body is produced locally to its site of action (i.e. in endothelial cells surrounding the vascular smooth muscle, in nerve cells). In the late 1970s, Dr. Robert Furchgott observed that acetylcholine released a substance that produced vascular relaxation, but only when the endothelium was intact. This observation opened this field of research and eventually led to his receiving a Nobel prize. Initially, Furchgott called this substance endothelium-derived relaxing factor (EDRF), but by the mid-1980s he and others identified this substance as being NO.
Nitric oxide is implicated in many pathologic processes as well. Nitric oxide post translational modifications have been attributed to nitric oxide’s role in pathology however, although the general mechanism by which nitric oxide exerts its physiological effects is by stimulation of soluble guanylate cyclase to produce cGMP, these post translational modifications can act as a cellular signal as well. For more information of NO pathologic effects and how NO induced post translational modifications can act as a cellular signal see the following:
Collecting cancer cells from patients and growing them into 3-D mini tumors could make it possible to quickly screen large numbers of potential drugs for ultra-rare cancers. Preliminary success with a new high-speed, high-volume approach is already guiding treatment decisions for some patients with recurring hard-to-treat cancers.
A London-based team labelled how a “tumor-in-a-dish” approach positively forecasted drug responses in cancer patients who previously took part in clinical trials. That study was a major development in a new research area focused on “organoids” — tiny 3-D versions of the brain, gut, lung and other organs grown in the lab to probe basic biology or test drugs.
UCLA cancer biologist Alice Soragni and her colleagues developed a high-volume, automated method to rapidly study drug responses in tumor organoids grown from patient cells. By studying mini tumors grown on a plate with 96 tiny test tubes, her team can screen hundreds of compounds at once and classify promising candidates within a time frame that is therapeutically actionable. According to Dr. Soragni, the method seemed to work for various kinds of ovarian cancer. It was shown that the lab-grown organoids mimicked how tumors in the body look and behave. And even in cases when mini tumors had a hard time growing in a dish, scientists still acknowledged potential drug candidates.
Up to now, the UCLA team has produced organoids from 35 to 40 people with various types of sarcoma which will allow them to classify tumors that won’t respond to conventional therapy. This proves useful for people with recurrent metastases, where it’s not clear if we’re doing anything for their overall survival or giving them more toxicity.
Metastatic Gastric Cancer Treatments Indicates Mixed Results
Reporter: Irina Robu, PhD
Two novel therapies for patients with metastatic gastric cancer were evaluated by Dr. David H. Ilson of Memorial Sloan Kettering Cancer Center in New York City. In one study, trifluridine/tipiracil (FTD/TPI) was revealed to be an effective treatment for patients with metastatic gastric cancer. On the other hand, the monoclonal antibody andecaliximab plus the chemotherapy regimen mFOLFOX6 (mFOLFOX + ADX) as a first-line treatment in patients with advanced gastric or gastroesophageal junction adenocarcinoma failed to improve overall survival. He has shown the only potentially curative treatment for early stage gastric cancer is surgery, with 5-year survival rates after gastrectomy of 90% or more in Japan and Korea and 40% to 75% in non-Asian countries.
Still, the disease reappears in up to half of patients, while 40% of patients with metastatic disease have had a previous gastrectomy. The phase III TAGS study had established that FTD/TPI is safe for patients with severely pretreated metastatic gastric cancer. In this study, Ilson and his colleagues appraised the efficacy and safety of the FTD/TPI in patients with or without gastrectomy. Of the 507 patients in the study, 147 in the FTD/TPI arm had a prior gastrectomy compared to 74 in the placebo arm. The study enhances the benefit of TPI as prolonging surviving versus placebo.
According to Dr. Manish A. Shah, the mixture of mFOLFOX6 and ADX exposed encouraging anti-tumor activity in patients with gastric or gastroesophageal junction adenocarcinoma according to a prior I/IB study. He showed a phase III, randomized, double-blind, multicenter study associating the efficiency and safety of mFOLFOX with or without ADX in patients with untreated HER2-negative gastric or gastroesophageal junction adenocarcinoma.
The main endpoint was complete survival with secondary endpoints of evolution free survival, objective response rate and safety. According to Dr. Shah, thee apparent increased activity of the mixture of mFOLFOX with ADX in patients ages 65 or older needs further study.
From Thalidomide to Revlimid: Celgene to Bristol Myers to possibly Pfizer; A Curation of Deals, Discovery and the State of Pharma
Curator: Stephen J. Williams, Ph.D.
Updated 6/24/2019
Updated 4/12/2019
Updated 2/28/2019
Lenalidomide (brand name Revlimid) is an approved chemotherapeutic used to treat multiple myeloma, mantle cell lymphoma, and certain myedysplastic syndromes. It is chemically related to thalidomide analog with potential antineoplastic activity. Lenalidomide inhibits TNF-alpha production, stimulates T cells, reduces serum levels of the cytokines vascular endothelial growth factor (VEGF) and basic fibroblast growth factor (bFGF), and inhibits angiogenesis. This agent also promotes G1 cell cycle arrest and apoptosis of malignant cells. It is usually given with dexamethasone for multiple myeloma. Revlimid was developed and sold by Celgene Corp. However, recent news of deals with Bristol Myers Squib
Revlimid (lenalidomide) is an immunomodulatory drug indicated for the treatment of patients with multiple myeloma, transfusion-dependent anemia due myelodysplastic syndromes (MDS), and mantle cell lymphoma.
Development History and FDA Approval Process for Revlimid
Right before the 2019 JP Morgan Healthcare Conference and a month before Bristol Myers quarterly earings reports, Bristol Myers Squib (BMY) announes a $74 Billion offer for Celgene Corp. From the Bristol Myers website press realease:
Highly Complementary Portfolios with Leading Franchises in Oncology, Immunology and Inflammation and Cardiovascular Disease
Significantly Expands Phase III Assets with Six Expected Near-Term Product Launches, Representing Greater Than $15 Billion in Revenue Potential
Registrational Trial Opportunities and Early-Stage Pipeline Position Combined Company for Sustained Leadership Underpinned by Cutting-Edge Technologies and Discovery Platforms
Strong Combined Cash Flows, Enhanced Margins and EPS Accretion of Greater Than 40% in First Full Year
Approximately $2.5 Billion of Expected Run-Rate Cost Synergies to Be Achieved by 2022
THURSDAY, JANUARY 3, 2019 6:58 AM EST
NEW YORK & SUMMIT, N.J.,–(BUSINESS WIRE)–Bristol-Myers Squibb Company (NYSE:BMY) and Celgene Corporation (NASDAQ:CELG) today announced that they have entered into a definitive merger agreement under which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion. Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. The Boards of Directors of both companies have approved the combination.
The transaction will create a leading focused specialty biopharma company well positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease through high-value innovative medicines and leading scientific capabilities. With complementary areas of focus, the combined company will operate with global reach and scale, maintaining the speed and agility that is core to each company’s strategic approach.
Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders at closing is valued at $102.43 per Celgene share and one CVR (as described below). When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69 percent of the company, and Celgene shareholders are expected to own approximately 31 percent.
“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” said Giovanni Caforio, M.D., Chairman and Chief Executive Officer of Bristol-Myers Squibb. “As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches. Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.”
Dr. Caforio continued, “We are impressed by what Celgene has accomplished for patients, and we look forward to welcoming Celgene employees to Bristol-Myers Squibb. Our new company will continue the strong patient focus that is core to both companies’ missions, creating a shared organization with a goal of discovering, developing and delivering innovative medicines for patients with serious diseases. We are confident we will drive value for shareholders and create opportunities for employees.”
“For more than 30 years, Celgene’s commitment to leading innovation has allowed us to deliver life-changing treatments to patients in areas of high unmet need. Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company,” said Mark Alles, Chairman and Chief Executive Officer of Celgene. “Our employees should be incredibly proud of what we have accomplished together and excited for the opportunities ahead of us as we join with Bristol-Myers Squibb, where we can further advance our mission for patients. We look forward to working with the Bristol-Myers Squibb team as we bring our two companies together.”
Compelling Strategic Benefits
Leading franchises with complementary product portfolios provide enhanced scale and balance. The combination creates:
Leading oncology franchises in both solid tumors and hematologic malignancies led by Opdivo and Yervoy as well as Revlimid and Pomalyst;
A top five immunology and inflammation franchise led by Orencia and Otezla; and
The #1 cardiovascular franchise led by Eliquis.
The combined company will have nine products with more than $1 billion in annual sales and significant potential for growth in the core disease areas of oncology, immunology and inflammation and cardiovascular disease.
Near-term launch opportunities representing greater than $15 billion in revenue potential. The combined company will have six expected near-term product launches:
Two in immunology and inflammation, TYK2 and ozanimod; and
Four in hematology, luspatercept, liso-cel (JCAR017), bb2121 and fedratinib.
These launches leverage the combined commercial capabilities of the two companies and will broaden and enhance Bristol-Myers Squibb’s market position with innovative and differentiated products. This is in addition to a significant number of lifecycle management registrational readouts expected in Immuno-Oncology (IO).
Early-stage pipeline builds sustainable platform for growth. The combined company will have a deep and diverse early-stage pipeline across solid tumors and hematologic malignancies, immunology and inflammation, cardiovascular disease and fibrotic disease leveraging combined strengths in innovation. The early-stage pipeline includes 50 high potential assets, many with important data readouts in the near-term. With a significantly enhanced early-stage pipeline, Bristol-Myers Squibb will be well positioned for long-term growth and significant value creation.
Powerful combined discovery capabilities with world-class expertise in a broad range of modalities. Together, the Company will have expanded innovation capabilities in small molecule design, biologics/synthetic biologics, protein homeostasis, antibody engineering and cell therapy. Furthermore, strong external partnerships provide access to additional modalities.
Compelling Financial Benefits
Strong returns and significant immediate EPS accretion. The transaction’s internal rate of return is expected to be well in excess of Celgene’s and Bristol-Myers Squibb’s cost of capital. The combination is expected to be more than 40 percent accretive to Bristol-Myers Squibb’s EPS on a standalone basis in the first full year following close of the transaction.
Strong balance sheet and cash flow generation to enable significant investment in innovation. With more than $45 billion of expected free cash flow generation over the first three full years post-closing, the Company is committed to maintaining strong investment grade credit ratings while continuing its dividend policy for the benefit of Bristol-Myers Squibb and Celgene shareholders. Bristol-Myers Squibb will also have significant financial flexibility to realize the full potential of the enhanced late- and early-stage pipeline.
Meaningful cost synergies. Bristol-Myers Squibb expects to realize run-rate cost synergies of approximately $2.5 billion by 2022. Bristol-Myers Squibb is confident it will achieve efficiencies across the organization while maintaining a strong, core commitment to innovation and delivering the value of the portfolio.
Terms and Financing
Based on the closing price of Bristol-Myers Squibb stock on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders is valued at $102.43 per share. The cash and stock consideration represents an approximately 51 percent premium to Celgene shareholders based on the 30-day volume weighted average closing stock price of Celgene prior to signing and an approximately 54 percent premium to Celgene shareholders based on the closing stock price of Celgene on January 2, 2019. Each share also will receive one tradeable CVR, which will entitle its holder to receive a one-time potential payment of $9.00 in cash upon FDA approval of all three of ozanimod (by December 31, 2020), liso-cel (JCAR017) (by December 31, 2020) and bb2121 (by March 31, 2021), in each case for a specified indication.
The transaction is not subject to a financing condition. The cash portion will be funded through a combination of cash on hand and debt financing. Bristol-Myers Squibb has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd. Following the close of the transaction, Bristol-Myers Squibb expects that substantially all of the debt of the combined company will be pari passu.
Accelerated Share Repurchase Program
Bristol-Myers Squibb expects to execute an accelerated share repurchase program of up to approximately $5 billion, subject to the closing of the transaction, market conditions and Board approval.
Corporate Governance
Following the close of the transaction, Dr. Caforio will continue to serve as Chairman of the Board and Chief Executive Officer of the company. Two members from Celgene’s Board will be added to the Board of Directors of Bristol-Myers Squibb. The combined company will continue to have a strong presence throughout New Jersey.
Approvals and Timing to Close
The transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the satisfaction of customary closing conditions and regulatory approvals. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019.
Advisors
Morgan Stanley & Co. LLC is serving as lead financial advisor to Bristol-Myers Squibb, and Evercore and Dyal Co. LLC are serving as financial advisors to Bristol-Myers Squibb. Kirkland & Ellis LLP is serving as Bristol-Myers Squibb’s legal counsel. J.P. Morgan Securities LLC is serving as lead financial advisor and Citi is acting as financial advisor to Celgene. Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Celgene.
Bristol-Myers Squibb 2019 EPS Guidance
In a separate press release issued today, Bristol-Myers Squibb announced its 2019 EPS guidance for full-year 2019, which is available on the “Investor Relations” section of the Bristol-Myers Squibb website at https://www.bms.com/investors.html.
Conference Call
Bristol-Myers Squibb and Celgene will host a conference call today, at 8:00 a.m. ET to discuss the transaction. The conference call can be accessed by dialing (800) 347-6311 (U.S. / Canada) or (786) 460-7199 (International) and giving the passcode 4935567. A replay of the call will be available from January 3, 2019 until January 17, 2019 by dialing (888) 203-1112 (U.S. / Canada) or (719) 457-0820 (International) and giving the passcode 4935567.
2. Then through news on Bloomberg and some other financial sites on a possible interest of a merged Celgene-Bristol Myers from Pfizer as well as other pharma groups
Billionaire John Paulson sees a 10 percent to 20 percent chance that Bristol-Myers Squibb Co. receives a takeover bid and he’s positioning his Celgene Corp. trade based on that risk, he said in an interview on Mike Samuels’ “According to Sources” podcast.
Bristol-Myers “is vulnerable and it has an attractive pipeline to several potential acquirers,” Paulson said in the podcast released Monday. “It’s a reasonable probability,” he said. “You have to be prepared someone may show up. It’s an attractive spread, but you can’t take that big a position.”
John Paulson
Photographer: Jin Lee/Bloomberg
Paulson has the Celgene/Bristol-Myers trade as a 3 percent portfolio position, though his firm is short a pharma index rather than Bristol-Myers for about half of the position. If an activist did show up, it would likely blow out the spread from its current $13.85 to probably $20 and, if an actual bid arrived, he said the spread could move out to $40.
“I just don’t feel comfortable being short Bristol in this environment,” Paulson said. “You can sort of get the same economics by shorting an index, maybe even do better because, since Bristol came down, if the pharma sector goes up, Bristol may go up more than the pharma sector, which would increase the profitability on the Celgene. ”
Celgene fell as much as 2.2 percent on Tuesday, its biggest intraday drop since Dec. 27. Bristol-Myers also sank as much as 2.2 percent, the most since Jan. 9.
The question of whether Bristol-Myers receives a hostile takeover offerhas been the top issue for investors since the Celgene deal was announced. The drugmaker was pressured in February 2017 to add three new directors after holding talks with activist hedge fund Jana Partners LLC. The same month, the Wall Street Journal reported that Carl Icahn had taken a stake and saw Bristol-Myers as a takeover target.
Pfizer Inc., AbbVie Inc. or Amgen Inc. “make varying amounts of sense as suitors, though we see many barriers to someone making an offer,” Credit Suisse analyst Vamil Divan wrote in a note earlier this month. AbbVie and Amgen “have the balance sheet strength and could look to beef up their oncology presence.”
CNBC’s David Faber said Jan. 3 — the day the Celgene deal was announced — that there had been “absolutely” no talks between Bristol-Myers and potential acquirers.
Jefferies analyst Michael Yee wrote in note Tuesday that he doesn’t expect an unsolicited offer for Bristol-Myers to “thwart” its Celgene purchase. He sees the deal spread as “quite attractive” again at the current range of 18 percent to 20 percent after it had earlier narrowed to 11 percent to 12 percent.
Paulson managed about $8.7 billion at the the beginning of November.
Nina Kjellson was just two years out of college, working as a research associate at Oracle Partners, a hedge fund in New York, when a cabbie gave her a stock tip. There was a company in New Jersey, he told her, trying to resurrect thalidomide, a drug that was infamous for causing severe birth defects, as a treatment for cancer.
Kjellson was born in Finland, where the memory of thalidomide, which was given to mothers to treat morning sickness but led to babies born without arms or legs, was particularly raw because the drug hit Northern Europe hard. But she was on the hunt for new cancer drugs, and her interest was piqued. She ended up investing a small amount of her own money in Celgene. That was 1999.
Since then, Celgene shares have risen more than 100-fold; the company became one of the largest biotechnology firms in the world. Earlier this month, rival Bristol-Myers Squibb announced plans to purchase Celgene for $74 billion in cash and stock.
Reflecting on a company she watched for two decades, Kjellson, now a venture capitalist at Canaan Partners in San Francisco, marveled at the “grit and chutzpah” that it took to push thalidomide back onto the market. “The company started taking off,” she remembered, “but not without an incredible reversal.” Celgene faced resistance from some thalidomide victims, and the Food and Drug Administration was lobbied not to revive the drug. In the end, she said, it built a golden egg and became a favorite partner of smaller biotech companies like the ones she funds. And it populated the rest of the pharmaceutical industry with its alumni. “If I had a nickel for every company that says we want to do Celgene-like deals,” she said, “I’d have better returns than from my venture career.”
But there’s another side to Celgene. When the company launched thalidomide as a treatment for leprosy in 1998, it cost $6 a pill. As it became clear that it was also an effective cancer drug, Celgene slowly raised the price, quadrupling it by the time it received approval for an improved molecule, Revlimid. Then, it slowly increased the price of Revlimid by a total of 145 percent, according to Sector & Sovereign LLC, a pharmaceutical consultancy.
Revlimid now costs $693 a pill. In 2017, Revlimid and another thalidomide-derived cancer drug represented 76 percent of Celgene’s $12.9 billion in annual sales. Kjellson gives the company credit for guts in science, for taking a terrible drug and resurrecting it. But it also had chutzpah when it came to what it charged.
A pioneer in ‘modern pricing’
How did the price of thalidomide, and then Revlimid, increase so much? Celgene explained it in a 2004 front-page story in the Wall Street Journal. “When we launched it, it was going to be an AIDS-wasting drug,” Celgene’s chief executive at the time, John Jackson, said. “We couldn’t charge more or there would have been demonstrations outside the company.” But once Celgene realized that the drug was a cancer treatment, the company decided to slowly bring thalidomide’s price more in line with other cancer medicines, such as Velcade, a rival medicine now sold by the Japanese drug giant Takeda. In 2003, it cost more than twice as much as thalidomide. “By bringing [the price] up every year, it was heading toward where it should be as a cancer drug,” Jackson told the Journal.
Thalidomide was not actually approved as a myeloma treatment until 2006. That same year, Revlimid, which causes less sleepiness and nerve pain than thalidomide, was approved, and Barer, the chemist behind Celgene’s thalidomide strategy, took over as chief executive. He made good on thalidomide’s promise, churning out one blockbuster after another. In 2017 Revlimid generated $8.2 billion. Another cancer drug derived from thalidomide, Pomalyst, generated $1.6 billion. Otezla, a very different drug also based on thalidomide’s chemistry, treats psoriasis and psoriatic arthritis. Its 2017 sales: $1.3 billion.
With persistent price increases, quarter after quarter, Celgene pioneered something else: what Wall Street calls “modern pricing.” Cancer drug prices have risen inexorably.
Activist investor Starboard Value is officially rallying the troops against Bristol-Myers Squibb’s $74 billion Celgene deal, and thanks to a big investor’s thumbs-down, it’ll have more support than some expected. But the question is whether it’ll be enough to scuttle the merger.
Starboard CEO Jeffrey Smith penned a letter (PDF) to Bristol-Myers’ shareholders on Thursday labeling the transaction “poorly conceived and ill-advised.” It intends to vote its shares—which number 1.63 million, though the hedge fund is seeking more—against the deal, and it wants to see other shareholders do the same. It’ll be filing proxy materials “in the coming days” to solicit “no” votes from BMS investors, Smith said.
Starboard picked up its stake early this year after the deal was announced, BMS confirmed last week, but until now, the activist fund hasn’t been forthcoming about its intentions. But the timing of its reveal is likely no coincidence; just Wednesday, Wellington Management—which owns about 8% of Bristol-Myers’ shares and ranked as its largest institutional shareholder as of earlier this week—came out publicly against the “risky” buyout.
But while “we believe it is possible at least one other long-term top-five [shareholder] may disagree with the transaction, too,” RBC Capital Markets’ Michael Yee wrote in his own investor note, he—as many of his fellow analysts do—still expects to see the deal go through. “We think the vast majority of the acquirer holder base that would not like the deal already voted by selling their shares earlier, leaving investors who are mostly supportive of the deal,” he wrote.
Meanwhile, Starboard has been clear about one other thing: It wants board seats. It’s nominated five new directors, including CEO Smith, and investors will vote on that group at an as-yet-unscheduled meeting. Thing is, that meeting will take place after BMS investors vote on the Celgene deal in April, so Starboard will have to rally sufficient support against the deal if it wants to see them installed.
The “probability of a third-party buyer for Bristol-Myers Squibb” before the April vote is “very low,” BMO Capital Markets analysts wrote recently, adding that “we do not believe a potential activist can change that.” Barclays analysts agreed Wednesday, pointing to a “lack of realistic, potential alternatives that could collectively provide a similar level of upside.”
Three quarters of Bristol-Myers Squibb shareholders vote to approve the deal with Celgene, paving the way for the largest pharmaceutical takeover in history.
Bristol-Myers Squibb (BMY – Get Report) on Friday announced that it had secured enough shareholder votes to approve its roughly $74 billion takeover of Celgene (CELG – Get Report) , putting the company closer to finalizing the largest pharmaceutical merger in history.
More than 75% of Bristol-Myers shareholders voted to approve the deal, according to a preliminary tally announced by Bristol-Myers on Friday.
Bristol-Myers’ position took a positive turn in late March after an influential shareholder advisory group recommended investors vote in favor of the cancer drug specialist’s takeover, and a key activist dropped its opposition to the deal.
Institutional Shareholder Services recommended the deal, which had been challenged by key Bristol-Myers shareholders Starboard Value and Wellington Management, ahead of Friday’s vote.
Updated 6/24/2019
Bristol Myers agrees to sell off Celgene blockbuster psoriasis and arthritis drug Otezla to satisfy FTC in hopes to speed up merger
Bristol-Myers Squibb hasn’t exactly had a pristine path to its proposed acquisition of Celgene. Sure, the legacy pharma giant racked up more than 75% of shareholder votes to approve the $74 billion acquisition following a quickly-quashed rebellion from some activist naysayers. But the company hit another hurdle in its Celgene acquisition quest that sent Bristol Myers stock tumbling nearly 7.5%, a $6 billion erasure in market value.
The reason(s)? For one, Bristol-Myers Squibb reported an unfortunate clinical trial result from a late-stage study of its cancer immunotherapy superstar Opdivo in liver cancer. For another—BMS made a somewhat surprising announcement that it would spin off Celgene’s blockbuster psoriasis and arthritis drug Otezla, slated to rake in nearly $2 billion in sales this year alone, in order to address Federal Trade Commission (FTC) antitrust concerns over the M&A.
That means the Bristol-Myers Celgene deal may not close until early 2020, rather than the originally expected timeline by the end of this year.
“Bristol-Myers Squibb reaffirms the significant value creation opportunity of the acquisition of Celgene,” the firm said in a statement. “Together with $2.5 billion of cost synergies, a compelling pipeline and a strong portfolio of marketed products, the company continues to expect growth in sales and earnings through 2025.”
Investors can be a fickle bunch. For now, though, they don’t seem particularly pleased at the decision to lop off one of Celgene’s tried and true cash cows.
Additional posts on Pharma Mergers and Deals on this Open Access Journal include:
This article appeared on the web site of Harley Street Concierge, one of the U.K.’s leading independent providers of clinical, practical and emotion support for cancer patients.
Cancer at Work: An Interview With Barbara Wilson
Whether you’re supporting an employee through cancer at work. Or you’re a cancer patient struggling to get the support you need. Either way, this Q and A with Barbara Wilson will help you out. Read on for a glimpse into Barbara’s personal experience with breast cancer. Find out where companies are falling short of supporting employees. Discover what you need to do if you’re feeling unsupported at work. And learn what’s unacceptable for Barbara in a modern and civilised society.
In a 2013 interview about cancer at work, you expressed amazement at “the lack of understanding there is about cancer. And what the impact is on individuals”. How would you say this has improved in the last 4 years? And what do you feel still needs to change?
There’s greater awareness and understanding about cancer at work. More organisations are aware of the difficulties people face. But many organisations don’t appreciate that recovery isn’t straightforward or quick. They also tend to rely on generic return to work policies. And these are inappropriate when it comes to supporting people recovering from cancer. A lot still depends on how far the local line manager is prepared to support an employee. And whether they’ll bend rules if need be about leave or sick pay.
You werediagnosed with breast cancer in 2005 and given the all clear in 2010. What did you learn about yourself through treatment and recovery?
I learned that I wasn’t immortal or superhuman! And also that life is precious and so it’s important to make the best of it. That doesn’t actually mean counting off things on your bucket list. Or living each day as if it’s your last. It’s about appreciating what you have, family, friends and the sheer joy of being alive.
“Life is precious. It’s about appreciating what you have, family, friends and the sheer joy of being alive.”
It’s a common misperception that people in remission want more family time or to travel the world. What reasons do your clients share with you for wanting to get back to work?
Yes. Before I had cancer, I remember asking a terminally ill employee why she still wanted to work. And she worked until a fortnight before her death. The simple answer is that it’s about feeling normal. Using your brain. Being with friends and colleagues rather than on your own. And losing yourself in your work. There are also financial reasons. But typically – and I can say this based on my own experience – it’s about being ‘you’ again rather than a cancer patient.
“I remember asking a terminally ill employee why she still wanted to work. And she worked until a fortnight before her death. Typically – and I can say this based on my own experience – it’s about being ‘you’ again rather than a cancer patient.”
You share tips for employers and HR professionals in this article for Macmillan. And you set out how to support a colleague during and after cancer treatment. What would you say to an employee who isn’t feeling supported by their employer or colleagues in this way?
In my experience there are two main reasons why people often aren’t supported.
1. Bosses and colleagues don’t understand the full impact of cancer treatment. They won’t understand what fatigue is or chemo brain or peripheral neuropathy. So they often expect people to get ‘back to normal’ work after 6 to 8 weeks. But recovery can take many months. This isn’t helped by the person often looking fit and well.
2. People don’t like talking about cancer at work. They feel awkward. And as a result often decide to say nothing. We advise people to be open from the outset. To understand their right to reasonable adjustments. And their responsibility to update their employer about their recovery and support needs. Employees recovering from cancer often have to take the lead. They have to guide their colleagues about the specific help they need. You can’t expect others to do it for you. It sounds wrong but that’s how it is.
“Bosses and colleagues often expect people to get ‘back to normal’ work after 6 to 8 weeks. But recovery can take many months. “
More than 100,000 people had to wait more than 2 weeks to see a cancer specialist in the UK last year. 25,153 had to wait more than 62 days to start treatment. What’s your reaction to these statistics?
It’s shocking. The worry for patients and their families during this period is totally debilitating. And on top of this it means that the cancer is growing unchecked. Where the cancer is aggressive, the delay may threaten lives. And it will certainly add to the overall costs of care. We really have to address this. It’s just not acceptable in a modern and civilised society.
“The worry for patients and their families during this period is totally debilitating. We really have to address this.”
Finally, can you tell us more about Working With Cancer?
Working With Cancer is a social enterprise and was established in June 2014. We support people affected by cancer to lead fulfilling and rewarding working lives. That means helping people to successfully return to work or remain in work. Or sometimes it’s about helping people to find work – depending on their personal needs. We work with corporate, charities and other third sector organisations to support people throughout the UK.
We coach people diagnosed with cancer to re-establish their working lives. And we train employers to understand how to manage work and cancer. We’ll advise teams about how to support a colleague affected by cancer. And we help carers juggle work whilst supporting their loved ones. Working With Cancer also helps organisations to update or improve their policies.
About Barbara Wilson
Barbara Wilson is a senior HR professional with almost 40 years’ experience. Roles include Group Head of Strategic HR at Catlin Group Ltd. Deputy Head of HR at Schroders Investment Management. And Chief of Staff to the Group HR Director at Barclays. After a breast cancer diagnosis, Barbara launched Working With Cancer. It’s a Social Enterprise providing coaching, training and consultancy to employers, employees, carers and health professionals.
For more information about Working With Cancer, click here to visit the website. Follow this link to connect with Barbara on Twitter. Email admin@workingwithcancer.co.uk. Or call 07508 232257 or 07919 147784.
Inspiring Book for ALL Cancer Survivors, ALL Cancer Patients and ALL Cardiac Patients – The VOICES of Patients, Hospitals CEOs, Health Care Providers, Caregivers and Families: Personal Experience with Critical Care and Invasive Medical Procedures
Tuesday, January 8, was another busy day in San Francisco for the JP Morgan Healthcare Conference. One interesting sideline was the idea that the current government shutdown could complicate some deals. Kent Thiry, chief executive officer of dialysis provider DaVita, who is working on the sale of its medical group to UnitedHealth Group this quarter, said, “We couldn’t guarantee that even if the government wasn’t shut down, but we and the buyer are both working toward that goal with the same intensity if not more.”
And in a slightly amusing bit of synchrony, U.S.Food and Drug Administration (FDA)Commissioner Scott Gottlieb’s keynote address that was delivered by way of video conference from Washington, D.C., had his audio cut out in the middle of the presentation. Gottlieb was talking about teen nicotine use and continued talking, unaware that his audio had shut off for 30 seconds. When it reconnected, the sound quality was reportedly poor.
bluebird bio’s chief executive officer, Nick Leschly, gave an update of his company’s pipeline, with a particular emphasis on a proposed payment model for its upcoming LentiGlobin, a gene therapy being evaluated for transfusion-dependent ß-thalassemia (TDT). The gene therapy is expected to be approved in Europe this year and in the U.S. in 2020. Although the price hasn’t been set, figures up to $2.1 million per treatment have been floated. Bluebird is proposing a five-year payment program, a pledge to not raise prices above CPI, and no costs after the payment period.
Eli Lilly’s chief executive officer David Ricks, just days after acquiringLoxo Oncology, offered up projections for this year, noting that 45 percent of its revenue will be created by drugs launched in 2015. Those include Trulicity, Taltz and Verzenio. The company also expects to launch two new molecular entities this year—nasal glucagons, a rescue medicine for high blood sugar (hyperglycemia), and Lasmiditan, a rescue drug for migraine headaches.
CNBC’s Jim CramerinterviewedAllergan chief executive officer Brent Saunders, in particular discussing the fact the company’s shares traded in 2015 for $331.15 but were now trading for $145.60. Cramer noted that the company’s internal fundamentals were strong, with multiple pipeline assets and a strong leadership team. Some of the stock problems are related to what Saunders said were “unforced errors,” including intellectual property rights to Restasis, its dry-eye drug, and Allergan’s dubious scheme to protect those patents by transferring the rights to the Saint Regis Mohawk Tribe in New York. On the positive side, the company’s medical aesthetics portfolio, dominated by Botox, is very strong and the overall market is expected to double.
One of the big areas of conversation is so-called “flyover tech.” Biopharma startups are dominant in Boston and in San Francisco, but suddenly venture capital investors have realized there’s a lot going on in between. New York City-based Radian Capital, for example, invests exclusively in markets outside major U.S. cities.
“At Radian, we partner with entrepreneurs who have built their businesses with a focus on strong economics rather than growth at all costs,” Aly Lovett, partner at Radian, told The Observer. “Historically, given the amount of money required to stand up a product, the software knowledge base, and coastal access to capital, health start-ups were concentrated in a handful of cities. As those dynamics have inverted and as the quality of living becomes a more important factor in attracting talent, we’re not seeing a significant increase in the number of amazing companies being built outside of the Bay Area.”
“Flyover companies” mentioned include Bind in Minneapolis, Minnesota; Solera Health in Phoenix, Arizona; ClearDATA in Austin, Texas; Healthe, in Eden Prairie, Minnesota; HistoSonics in Ann Arbor, Michigan; and many others.
Only a month after its record-breaking IPO, Moderna Therapeutics’ chief executive officer Stephane Bancel, spent time both updating the company’s clinical pipeline and justifying the company’s value despite the stock dropping off 26 percent since the IPO. Although one clinical program, a Zika vaccine, mRNA-1325, has been abandoned, the company has three new drugs coming into the clinic: mRNA-2752 for solid tumors or lymphoma; mRNA-4157, a Personalized Cancer Vaccine with Merck; and mRNA-5671, a KRAS cancer vaccine. The company also submitted an IND amendment to the FDA to add an ovarian cancer cohort to its mRNA-2416 program.
One interesting bit of trivia, supplied on Twitter by Rasu Shrestha, chief innovation officer for the University of Pittsburgh Medical Center, this year at the conference, 33 female chief executive officers were presenting corporate updates … compared to 19 men named Michael. Well, it’s a start.
And for another bit of trivia, Elisabeth Bik, of Microbiome Digest, tweeted, “San Francisco prices are so out of control that one hotel is charging the equivalent of $21.25 for a cup of coffee during a JPMorgan conference.”
Other posts on the JP Morgan 2019 Healthcare Conference on this Open Access Journal include:
#JPM19 Conference: Lilly Announces Agreement To Acquire Loxo Oncology, Volume 2 (Volume Two: Latest in Genomics Methodologies for Therapeutics: Gene Editing, NGS and BioInformatics, Simulations and the Genome Ontology), Part 1: Next Generation Sequencing (NGS)
#JPM19 Conference: Lilly Announces Agreement To Acquire Loxo Oncology
Reporter: Gail S. Thornton
News announced during the 37th J.P. Morgan Healthcare Conference (#JPM19): Drugmaker Eli Lilly and Company announced its plans to acquire Loxo for $8 billion, as part of its oncology strategy, which focuses “opportunities for first-in-class and best-in-class therapies.”
Please read their press release below.
INDIANAPOLIS and STAMFORD, Conn., Jan. 7, 2019 /PRNewswire/ —
Acquisition will broaden the scope of Lilly’s oncology portfolio into precision medicines through the addition of a marketed therapy and a pipeline of highly selective potential medicines for patients with genomically defined cancers.
Loxo Oncology’s pipeline includes LOXO-292, an oral RET inhibitor being studied across multiple tumor types, which recently was granted Breakthrough Therapy designation by the FDA and could launch in 2020.
Loxo Oncology’s Vitrakvi® (larotrectinib) is an oral TRK inhibitor developed and commercialized in collaboration with Bayer that was recently approved by the FDA.
Lilly will commence a tender offer to acquire all outstanding shares of Loxo Oncology for a purchase price of$235.00 per share in cash, or approximately $8.0 billion.
Lilly will conduct a conference call with the investment community and media today at 8:45 a.m. EST.
Eli Lilly and Company (NYSE: LLY) and Loxo Oncology, Inc. (NASDAQ: LOXO) today announced a definitive agreement for Lilly to acquire Loxo Oncology for $235.00 per share in cash, or approximately $8.0 billion. Loxo Oncology is a biopharmaceutical company focused on the development and commercialization of highly selective medicines for patients with genomically defined cancers.
The acquisition would be the largest and latest in a series of transactions Lilly has conducted to broaden its cancer treatment efforts with externally sourced opportunities for first-in-class and best-in-class therapies. Loxo Oncology is developing a pipeline of targeted medicines focused on cancers that are uniquely dependent on single gene abnormalities that can be detected by genomic testing. For patients with cancers that harbor these genomic alterations, a targeted medicine could have the potential to treat the cancer with dramatic effect.
Loxo Oncology has a promising portfolio of approved and investigational medicines, including:
LOXO-292, a first-in-class oral RET inhibitor that has been granted Breakthrough Therapy designation by the FDA for three indications, with an initial potential launch in 2020. LOXO-292 targets cancers with alterations to the rearranged during transfection (RET) kinase. RET fusions and mutations occur across multiple tumor types, including certain lung and thyroid cancers as well as a subset of other cancers.
LOXO-305, an oral BTK inhibitor currently in Phase 1/2. LOXO-305 targets cancers with alterations to the Bruton’s tyrosine kinase (BTK), and is designed to address acquired resistance to currently available BTK inhibitors. BTK is a validated molecular target found across numerous B-cell leukemias and lymphomas.
Vitrakvi, a first-in-class oral TRK inhibitor developed and commercialized in collaboration with Bayer that was recently approved by the U.S. Food and Drug Administration (FDA). Vitrakvi is the first treatment that targets a specific genetic abnormality to receive a tumor-agnostic indication at the time of initial FDA approval.
LOXO-195, a follow-on TRK inhibitor also being studied by Loxo Oncology and Bayer for acquired resistance to TRK inhibition, with a potential launch in 2022.
“Using tailored medicines to target key tumor dependencies offers an increasingly robust approach to cancer treatment,” said Daniel Skovronsky, M.D., Ph.D., Lilly’s chief scientific officer and president of Lilly Research Laboratories. “Loxo Oncology’s portfolio of RET, BTK and TRK inhibitors targeted specifically to patients with mutations or fusions in these genes, in combination with advanced diagnostics that allow us to know exactly which patients may benefit, creates new opportunities to improve the lives of people with advanced cancer.”
“We are gratified that Lilly has recognized our contributions to the field of precision medicine and are excited to see our pipeline benefit from the resources and global reach of the Lilly organization,” said Josh Bilenker, M.D., chief executive officer of Loxo Oncology. “Tumor genomic profiling is becoming standard-of-care, and it will be critical to continue innovating against new targets, while anticipating mechanisms of resistance to available therapies, so that patients with advanced cancer have the chance to live longer and better lives.”
“Lilly Oncology is committed to developing innovative, breakthrough medicines that will make a meaningful difference for people with cancer and help them live longer, healthier lives,” said Anne White, president of Lilly Oncology. “The acquisition of Loxo Oncology represents an exciting and immediate opportunity to expand the breadth of our portfolio into precision medicines and target cancers that are caused by specific gene abnormalities. The ability to target tumor dependencies in these populations is a key part of our Lilly Oncology strategy. We look forward to continuing to advance the pioneering scientific innovation begun by Loxo Oncology.”
“We are excited to have reached this agreement with a team that shares our commitment to ensuring that emerging translational science reaches patients in need,” said Jacob Van Naarden, chief operating officer of Loxo Oncology. “We are confident that the work we have started, which includes an FDA approved drug, and a pipeline spanning from Phase 2 to discovery, will continue to thrive in Lilly’s hands.”
Under the terms of the agreement, Lilly will commence a tender offer to acquire all outstanding shares of Loxo Oncology for a purchase price of $235.00 per share in cash, or approximately $8.0 billion. The transaction is not subject to any financing condition and is expected to close by the end of the first quarter of 2019, subject to customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of Loxo Oncology’s common stock. Following the successful closing of the tender offer, Lilly will acquire any shares of Loxo Oncology that are not tendered into the tender offer through a second-step merger at the tender offer price.
The tender offer represents a premium of approximately 68 percent to Loxo Oncology’s closing stock price on January 4, 2019, the last trading day before the announcement of the transaction. Loxo Oncology’s board recommends that Loxo Oncology’s shareholders tender their shares in the tender offer. Additionally, a Loxo Oncology shareholder, beneficially owning approximately 6.6 percent of Loxo Oncology’s outstanding common stock, has agreed to tender its shares in the tender offer.
This transaction will be reflected in Lilly’s financial results and financial guidance according to Generally Accepted Accounting Principles (GAAP). Lilly will provide an update to its 2019 financial guidance, including the expected impact from the acquisition of Loxo Oncology, as part of its fourth-quarter and full-year 2018 financial results announcement on February 13, 2019.
For Lilly, Deutsche Bank is acting as the exclusive financial advisor and Weil, Gotshal & Manges LLP is acting as legal advisor in this transaction. For Loxo Oncology, Goldman Sachs & Co. LLC is acting as exclusive financial advisor and Fenwick & West LLP is acting as legal advisor.
Conference Call and Webcast Lilly will conduct a conference call with the investment community and media today at 8:45 a.m. EST to discuss the acquisition of Loxo Oncology. Investors, media and the general public can access a live webcast of the conference call through the Webcasts & Presentations link that will be posted on Lilly’s website at www.lilly.com. The webcast of the conference call will be available for replay through February 7, 2019.
About LOXO-292 LOXO-292 is an oral and selective investigational new drug in clinical development for the treatment of patients with cancers that harbor abnormalities in the rearranged during transfection (RET) kinase. RET fusions and mutations occur across multiple tumor types with varying frequency. LOXO-292 was designed to inhibit native RET signaling as well as anticipated acquired resistance mechanisms that could otherwise limit the activity of this therapeutic approach. LOXO-292 has been granted Breakthrough Therapy Designation by the U.S. FDA for three indications, and could launch as early as 2020.
About LOXO-305 LOXO-305 is an investigational, highly selective non-covalent Bruton’s tyrosine kinase (BTK) inhibitor. BTK plays a key role in the B-cell antigen receptor signaling pathway, which is required for the development, activation and survival of normal white blood cells, known as B-cells, and malignant B-cells. BTK is a validated molecular target found across numerous B-cell leukemias and lymphomas including chronic lymphocytic leukemia, Waldenstrom’s macroglobulinemia, mantle cell lymphoma and marginal zone lymphoma.
About Vitrakvi® (larotrectinib) Vitrakvi is an oral TRK inhibitor for the treatment of adult and pediatric patients with solid tumors with a neurotrophic receptor tyrosine kinase (NTRK) gene fusion without a known acquired resistance mutation that are either metastatic or where surgical resection will likely result in severe morbidity, and have no satisfactory alternative treatments or have progressed following treatment. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.
About LOXO-195 LOXO-195 is a selective TRK inhibitor that is being investigated to address potential mechanisms of acquired resistance that may emerge in patients receiving Vitrakvi® (larotrectinib) or other multikinase inhibitors with anti-TRK activity.
About Eli Lilly and Company Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about Lilly, please visit us at www.lilly.com and www.lilly.com/newsroom/social-channels. C-LLY
About Loxo Oncology Loxo Oncology is a biopharmaceutical company focused on the development and commercialization of highly selective medicines for patients with genomically defined cancers. Our pipeline focuses on cancers that are uniquely dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer with dramatic effect. We believe that the most selective, purpose-built medicines have the highest probability of maximally inhibiting the intended target, with the intention of delivering best-in-class disease control and safety. Our management team seeks out experienced industry partners, world-class scientific advisors and innovative clinical-regulatory approaches to deliver new cancer therapies to patients as quickly and efficiently as possible. For more information, please visit the company’s website at http://www.loxooncology.com.
This press release contains forward-looking statements about the benefits of Lilly’sacquisition of Loxo Oncology, Inc. (“Loxo Oncology”). It reflects Lilly‘s current beliefs; however, as with any such undertaking, there are substantial risks and uncertainties in implementing the transaction and in drug development. Among other things, there can be no guarantee that the transaction will be completed in the anticipated timeframe, or at all, or that the conditions required to complete the transaction will be met, that Lilly will realize the expected benefits of the transaction,that the molecules will be approved on the anticipated timeline or at all, or that the potential products will be commercially successful. For further discussion of these and other risks and uncertainties, see Lilly‘s most recent Form 10-K and Form 10-Q filings with the United States Securities and Exchange Commission (“the SEC”). Lilly will provide an update to certain elements of its 2019 financial guidance as part of its fourth quarter and full-year 2018 financial results announcement. Except as required by law, Lilly undertakes no duty to update forward-looking statements to reflect events after the date of this release.
This press release contains “forward-looking statements” relating to the acquisition of Loxo Oncology by Lilly. Such forward-looking statements include the ability of Loxo Oncology and Lilly to complete the transactions contemplated by the merger agreement, including the parties’ ability to satisfy the conditions to the consummation of the offer and the other conditions set forth in the merger agreement and the possibility of any termination of the merger agreement, as well as the role of targeted genomics and diagnostics in oncology treatment and acceleration of our work in developing medicines. Such forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. Actual results may differ materially from current expectations because of risks associated with uncertainties as to the timing of the offer and the subsequent merger; uncertainties as to how many of Loxo Oncology’s stockholders will tender their shares in the offer; the risk that competing offers or acquisition proposals will be made; the possibility that various conditions to the consummation of the offer or the merger may not be satisfied or waived; the effects of disruption from the transactions contemplated by the merger agreement on Loxo Oncology’s business and the fact that the announcement and pendency of the transactions may make it more difficult to establish or maintain relationships with employees, suppliers and other business partners; the risk that stockholder litigation in connection with the offer or the merger may result in significant costs of defense, indemnification and liability; other uncertainties pertaining to the business of Loxo Oncology, including those set forth in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Loxo Oncology’s Annual Report on Form 10-K for the year ended December 31, 2017, which is on file with the SEC and available on the SEC’s website at www.sec.gov. Additional factors may be set forth in those sections of Loxo Oncology’s Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2018, filed with the SEC in the fourth quarter of 2018. In addition to the risks described above and in Loxo Oncology’s other filings with the SEC, other unknown or unpredictable factors could also affect Loxo Oncology’s results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. The information contained in this press release is provided only as of the date of this report, and Loxo Oncology undertakes no obligation to update any forward-looking statements either contained in or incorporated by reference into this report on account of new information, future events, or otherwise, except as required by law.
Additional Information about the Acquisition and Where to Find It
The tender offer for the outstanding shares of Loxo Oncology referenced in this communication has not yet commenced. This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Loxo Oncology, nor is it a substitute for the tender offer materials that Lilly and its acquisition subsidiary will file with the SEC upon commencement of the tender offer. At the time the tender offer is commenced, Lilly and its acquisition subsidiary will file tender offer materials on Schedule TO, and Loxo Oncology will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF LOXO ONCOLOGY ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF LOXO ONCOLOGY SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES. The Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares of Loxo Oncology at no expense to them. The tender offer materials and the Solicitation/Recommendation Statement will be made available for free at the SEC’s web site at www.sec.gov.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, Lilly and Loxo Oncology file annual, quarterly and special reports and other information with the SEC. You may read and copy any reports or other information filed by Lilly or Loxo Oncology at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. Lilly’s and Loxo Oncology’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov.
Other related articles published in this Open Access Online Scientific Journal include the following:
2017
FDA has approved the world’s first CAR-T therapy, Novartis for Kymriah (tisagenlecleucel) and Gilead’s $12 billion buy of Kite Pharma, no approved drug and Canakinumab for Lung Cancer (may be?)
Role of Informatics in Precision Medicine: Notes from Boston Healthcare Webinar: Can It Drive the Next Cost Efficiencies in Oncology Care? Volume 2 (Volume Two: Latest in Genomics Methodologies for Therapeutics: Gene Editing, NGS and BioInformatics, Simulations and the Genome Ontology), Part 1: Next Generation Sequencing (NGS)
Role of Informatics in Precision Medicine: Notes from Boston Healthcare Webinar: Can It Drive the Next Cost Efficiencies in Oncology Care?
Reporter: Stephen J. Williams, Ph.D.
Boston Healthcare sponsored a Webinar recently entitled ” Role of Informatics in Precision Medicine: Implications for Innovators”. The webinar focused on the different informatic needs along the Oncology Care value chain from drug discovery through clinicians, C-suite executives and payers. The presentation, by Joseph Ferrara and Mark Girardi, discussed the specific informatics needs and deficiencies experienced by all players in oncology care and how innovators in this space could create value. The final part of the webinar discussed artificial intelligence and the role in cancer informatics.
Below is the mp4 video and audio for this webinar. Notes on each of the slides with a few representative slides are also given below:
Please click below for the mp4 of the webinar:
worldwide oncology related care to increase by 40% in 2020
big movement to participatory care: moving decision making to the patient. Need for information
cost components focused on clinical action
use informatics before clinical stage might add value to cost chain
Key unmet needs from perspectives of different players in oncology care where informatics may help in decision making
Needs of Clinicians
– informatic needs for clinical enrollment
– informatic needs for obtaining drug access/newer therapies
2. Needs of C-suite/health system executives
– informatic needs to help focus of quality of care
– informatic needs to determine health outcomes/metrics
3. Needs of Payers
– informatic needs to determine quality metrics and managing costs
– informatics needs to form guidelines
– informatics needs to determine if biomarkers are used consistently and properly
– population level data analytics
What are the kind of value innovations that tech entrepreneurs need to create in this space? Two areas/problems need to be solved.
innovations in data depth and breadth
need to aggregate information to inform intervention
Different players in value chains have different data needs
Data Depth: Cumulative Understanding of disease
Data Depth: Cumulative number of oncology transactions
technology innovators rely on LEGACY businesses (those that already have technology) and these LEGACY businesses either have data breath or data depth BUT NOT BOTH; (IS THIS WHERE THE GREATEST VALUE CAN BE INNOVATED?)
NEED to provide ACTIONABLE as well as PHENOTYPIC/GENOTYPIC DATA
data depth more important in clinical setting as it drives solutions and cost effective interventions. For example Foundation Medicine, who supplies genotypic/phenotypic data for patient samples supplies high data depth
technologies are moving to data support
evidence will need to be tied to umbrella value propositions
Informatic solutions will have to prove outcome benefit
How will Machine Learning be involved in the healthcare value chain?
increased emphasis on real time datasets – CONSTANT UPDATES NEED TO OCCUR. THIS IS NOT HAPPENING BUT VALUED BY MANY PLAYERS IN THIS SPACE
Interoperability of DATABASES Important! Many Players in this space don’t understand the complexities integrating these datasets
Other Articles on this topic of healthcare informatics, value based oncology, and healthcare IT on this OPEN ACCESS JOURNAL include:
2012pharmaceutical
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