Deciphera to sell for $2.4B, adding to upswing in biopharma M&A
29 Apr 2024
Dive Brief:
Ono Pharmaceutical has agreed to buy cancer drugmaker Deciphera Pharmaceuticals in a deal that values the latter company at $2.4 billion.
Per deal terms, Ono is purchasing in cash all outstanding shares of Deciphera for $25.60, reflecting a 75% premium to the stock’s closing price Friday. The companies expect to complete their deal sometime between July and September, at which point Deciphera would become a wholly owned subsidiary of Ono.
The acquisition would hand Ono a marketed therapy for a type of tumor found in the gastrointestinal tract, as well as a slate of experimental cancer drugs. Of those, the most advanced is a medicine called vimseltinib that last fall succeeded in a key study. Before the end of June, Deciphera plans to submit the medicine for approval as a treatment for a group of rare tumors that affect tissues around the joints.
Dive Insight:
Ono’s purchase adds to a recent upswing in biopharma deals. According to a database compiled by BioPharma Dive, drugmakers this year have inked at least 16 buyouts worth $50 million or more. The tally is higher than the 11 seen over the same period in 2023.
To Ono, which is based in Japan, the deal announced Monday offers a way to both build out its cancer research and get a stronger foothold in other markets. In a statement, CEO Gyo Sagara noted how the Deciphera acquisition will expand his company’s oncology portfolio as well as accelerate its business development activities in the U.S. and Europe.
Bradley Canino, an analyst who covers Deciphera for the investment bank Stifel, wrote in a note to clients that Ono currently makes around 30% of its revenue from markets in the Americas. Moving forward, though, the U.S. “will become more important due to the ability to command a price premium and recoup R&D costs.”
Canino also used the Ono deal to suggest that investors may want to change how they think about companies like Deciphera. He noted how mid-sized drugmakers have shown an appetite for “de-risked” cancer assets, and how “this trend in oncology should not be ignored.” Some examples of that trend include the tie-ups between Sobi and CTI BioPharma, Ipsen and Epizyme, and Genmab and ProfoundBio.
“These deals suggest that companies that can commercialize important, but small, oncology drugs should have the ability to find an acquisition exit amongst a broad suite of acquirers once the commercial market has been established with a successful launch,” the analyst wrote.
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