Shanghai Argo Biopharma Co., Ltd.

Pictured: Novartis' office in Germany/iStock, TBE Novartis on Monday announced that it has inked a voluntary public takeover offer with German biotech MorphoSys for approximately $2.9 billion in a bid to expand its oncology portfolio. Under the agreement, which has been unanimously approved by MorphoSys’ board of directors, Novartis will purchase all no-par value bearer shares of the biotech for over $73 apiece. The companies expect to close the deal in the first half of 2024, subject to customary closing conditions such as regulatory and anti-trust approvals as well as the acceptance of at least 65% of MorphoSys’ outstanding shareholders. Novartis CMO Shreeram Aradhye said in a statement that the MorphoSys acquisition will help the Swiss pharma “strengthen our leading pipeline and portfolio in oncology, adding to our capabilities and expertise.” At the center of the merger is pelabresib, an investigational small molecule inhibitor of the BET protein which suppresses the expression of abnormal genes involved in cancer development. According to Novartis’ announcement, pelabresib could be a “potentially practice changing treatment option” with an overall favorable tolerability and safety profile. MorphoSys is currently running the Phase III MANIFEST-2 study, testing pelabresib in combination with Incyte’s Jakafi (ruxolitinib) in myelofibrosis patients who have not been previously treated with a JAK inhibitor. In November 2023, the biotech posted mixed findings for the trial demonstrating that pelabresib plus Jakafi met one of the study’s primary endpoints, inducing a significant and clinically meaningful improvement in the proportion of patients with at least a 35% reduction in spleen volume after 24 weeks. However, the combination regimen missed its second primary endpoint of total symptom score, unable to significantly differentiate itself from the placebo plus Jakafi arm. In its announcement on Monday, Novartis said that despite the mixed performance, a regulatory filing for pelabresib is set for the second half of 2024. Besides pelabresib, the MorphoSys acquisition will also give Novartis the early-stage tulmimetostat, a dual-inhibitor of EZH1 and EZH2 that is being trialed for solid tumors or lymphomas. However, Novartis will not gain access to MorphoSys’ FDA-approved therapy for diffuse large B-cell lymphoma Monjuvi (tafasitamab-cxix), the global development and commercialization rights to which was sold to Incyte just before Monday’s Novertis-MorphoSys deal was inked. For Novartis, the MorphoSys acquisition continues its dealmaking spree, which last month included an AI partnership with Alphabet’s Isomorphic Labs, the acquisition of immune-focused Calypso Biotech as well as a pair of RNA interference R&D agreements with China-based Shanghai Argo Biopharmaceutical. Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

Pictured: GSK's office in Poznan, Poland/iStock, Wirestock GSK on Tuesday announced it has entered into an agreement to buy Aiolos Bio in an effort to strengthen its pipeline of respiratory and inflammatory assets. As per the acquisition agreement, GSK will pay Aiolos shareholders $1 billion upfront and will pledge up to $400 million in success-based regulatory milestones. The companies did not indicate when they expect to close the deal, but said that the transaction is subject to anti-trust clearance and other customary closing conditions. At the core of the Aiolos buyout is AIO-001, a long-acting monoclonal antibody that targets the thymic stromal lymphopoietin (TSLP) cytokine, which according to the biotech’s website is a “validated driver of inflammation.” Blocking TSLP has been the “only biological approach that has demonstrated clinical benefit” in all types of moderate-to-severe asthma, Aiolos asserts. AIO-001, which Aiolos licensed from Jiangsu Hengrui Pharmaceuticals outside of Greater China in August 2023, has the potential to be administered biannually, ultimately reducing the burden of asthma on patients’ daily lives. Preclinical studies and early clinical trials have validated the candidate’s mechanism of action and schedule, showing its promising efficacy and a long half-life, according to Aiolos' website. Based on this potential, Aiolos launched just three months ago, in October 2023, with $245 million in Series A support. The funding round was backed by several big investors, including Atlas Venture, Bain Capital Life Sciences and Sofinnova Investments. “Adding AIO-001, a potentially best-in-class medicine targeting the TSLP pathway, could expand the reach of our current respiratory biologics portfolio, including to the 40% of severe asthma patients with low T2 inflammation where treatment options are still needed,” Tony Wood, chief scientific officer at GSK, said in a statement Tuesday. As part of the Aiolos acquisition, GSK will be responsible for milestones and tiered royalties to Jiangsu Hengrui. GSK is the fourth industry giant to jump into the dealmaking frenzy at the 42nd annual J.P. Morgan Healthcare Conference. On Monday, J&J put forward $2 billion to acquire La Jolla, Calif.–based Ambrx, which develops antibody-drug conjugates for cancer. The same day, Merck announced it was shelling out $680 million to buy Harpoon Therapeutics and its portfolio of T-cell engagers for various oncology targets. Novartis likewise made three smaller plays on Monday, including a $250 million buyout of Calypso Biotech, bolstering its presence in immune diseases, and two RNAi license deals with Chinese biotech Shanghai Argo Biopharmaceutical, focusing on cardiovascular indications. Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

Novartis' neuroscience focus is not on psychiatry even as the area has drawn Big Pharma interest in recent weeks. Novartis’ R&D chief Fiona Marshall, Ph.D., says the company has been “pretty aggressive and active” in neuroscience-focused business development, looking for a boost to one of the company’s four key therapeutic pillars. The president of biomedical research delved a bit deeper into how the company weighs internal research with external opportunities in an interview with Fierce Biotech Monday on the sidelines of the J.P. Morgan Healthcare Conference in San Francisco. Within neuroscience, Novartis’ priority is on multiple sclerosis and neurodegeneration, not as much in neuropsychiatric, Marshall explained. The latter category of neuroscience has been front and center following Big Pharma M&A deals for schizophrenia biotechs Cerevel and Karuna. “I think the harder challenge is to get the differentiation over standard of care,” Marshall said.  Marshall also spoke about the opportunities and hurdles that remain for the psychedelic field after Lykos Therapeutics submitted its new drug application in December for an MDMA-assisted therapy to treat PTSD. Marshall said an outstanding challenge is patient stratification, saying the field doesn’t quite know yet how to select the best patients for psychedelic or psychoactive treatments.  Novartis’ existing neuroscience pipeline is buoyed by spinal muscular atrophy treatment Zolgensma and relapsed multiple sclerosis med Kesimpta. The former works by replacing the SMN1 gene that’s dysfunctional in patients with a new and improved version. But Marshall said Novartis is not keen on widening its gene therapy unit to include gene editing anytime soon, specifically as questions remain around the delivery of editors.  “I wouldn't say it's at the top of our deal list at this conference, put it that way,” she said.  Instead, Marshall says Novartis' internal research is centered on the expanded use of RNA, including siRNA and antisense oligonucleotides, and the delivery of those therapies outside of the liver.  Marshall’s comments come as Novartis sprinted out of the gates of this year’s major investor conference. The Swiss pharma announced the acquisition of autoimmune biotech Calypso for $250 million with $170 million in biobucks available. The smaller startup spun out of Merck KGaA in 2013. Novartis is also paying $185 million upfront for ex-China rights to two RNAi cardiovascular candidates from Shanghai Argo Biopharmaceutical.  The Wall Street Journal reported Monday that Novartis was also in late-stage talks to buy Cytokinetics after the heart disease biotech showed in late December that its late-stage cardiovascular drug improved patients’ exercise capacity in a phase 3 trial. Marshall would not comment on the potential deal.