Biogen’s HI-Bio Acquisition Continues Biopharma Spending in $257B Immunology Market

The global immunology market is poised for significant expansion, with projections indicating growth from nearly $103.2 billion in 2024 to $257.4 billion by 2032. This surge, second only to oncology in market value, underscores the robust interest and substantial investments from biopharmaceutical companies. One driving factor is the looming threat of patent expirations on existing drugs, coupled with the relatively high success rates of immunology drugs in clinical trials, making this a particularly attractive field.

In a notable move this past April, Vertex Pharmaceuticals acquired Alpine Immune Sciences for $4.9 billion. This acquisition, the largest of 2024 so far, opens up opportunities for Vertex in the realm of autoimmune and inflammatory disease treatments. Similarly, Bristol Myers Squibb has entered into a substantial collaboration with Repertoire Immune Medicines, with a potential value of $1.8 billion over multiple years, to develop up to three vaccines targeting autoimmune diseases.

Recently, Biogen made headlines by announcing its acquisition of Human Immunology Biosciences (HI-Bio), a company specializing in severe immune-mediated diseases. The deal involves an upfront payment of $1.15 billion, with the potential for an additional $650 million in milestone payments. Analysts interpret this acquisition as part of CEO Chris Viehbacher’s strategy to diversify Biogen’s portfolio away from the high-risk neurological sector and strengthen its presence in immunology and rare diseases.

This strategic shift aims to mitigate risks associated with clinical trials that have stringent success criteria. Biogen is looking to broaden its pipeline beyond its existing drugs, including treatments like Skyclarys for Friedreich’s ataxia and Leqembi for Alzheimer’s disease. Myles Minter, a research analyst at William Blair, emphasized the importance of this move in "de-risking" Biogen’s pipeline, steering the company away from high-stakes trials in areas like stroke or relapsing multiple sclerosis.

The acquisition of HI-Bio grants Biogen access to felzartamab, an anti-CD38 antibody designed to treat several chronic kidney conditions with significant unmet medical needs, such as IgA nephropathy, primary membranous nephropathy, and antibody-mediated rejection in kidney transplant patients. Analysts from Bank of Montreal Capital Markets have highlighted felzartamab’s potential for broad applicability across a range of immune-mediated diseases due to its mechanism of selectively depleting CD38+ cells.

The immunology and inflammation (I&I) market holds particular appeal due to the potential for developing a "pipeline-in-a-product." This approach allows for the expansion into adjacent indications, transforming a single product into a major brand. Biotech entrepreneur Andrew Pannu has noted the attractiveness of this market for its high potential for growth and diversification.

In the broader I&I space, AbbVie’s Humira serves as a benchmark. Humira, a top-selling drug used for conditions like Crohn’s disease, plaque psoriasis, and rheumatoid arthritis, has generated approximately $200 billion over the past two decades, illustrating the lucrative potential of successful immunology treatments.

The I&I market’s relatively high valuations make it an appealing target for companies like Biogen, which are looking to de-risk their portfolios. Biogen’s recent history includes a controversial period with its Alzheimer’s drug Aduhelm, which faced significant scrutiny regarding its efficacy and pricing. Despite these challenges, Biogen is now focusing on Leqembi in partnership with Eisai as it seeks to realign its pipeline and address upcoming patent expirations.

Overall, Biogen’s expertise in immunology and rare diseases, bolstered by products like Skyclarys and Spinraza for spinal muscular atrophy, positions it well for future growth in the I&I market. New product launches and market expansions are central to Biogen’s strategy to rejuvenate its revenue streams.

Moreover, startups are emerging as formidable contenders in the I&I sector. Mirador Therapeutics, focused on inflammatory diseases, secured $400 million in venture capital last quarter. Alumis, AltruBio, and Attovia have also raised significant funds, indicating a vibrant and competitive landscape. Alumis, for instance, is gearing up for Phase III trials of a TYK2 inhibitor in plaque psoriasis, signaling its potential rivalry with established firms like Bristol Myers Squibb and Takeda.

In conclusion, the immunology market is experiencing a transformative phase, driven by substantial investments, strategic acquisitions, and promising clinical developments. As biopharma companies navigate patent cliffs and seek to diversify their portfolios, the focus on immunology and inflammation remains a crucial and lucrative endeavor.