Ziarco Pharma Ltd.

July 19, 2017 By Mark Terry , BioSpace.com Breaking News Staff Yesterday, Swiss-based Novartis ’ chief executive officer Joe Jimenez spoke with investors and analysts regarding its half-year financials. In it, Jimenez outlined a not-surprising insistence on bolt-on deals in the $2 billion to $5 billion range, which is consistent with what the company has been saying for some time. Jimenez said, “In terms of M&A, we are still very focused on our strategy of bolt-on acquisitions anywhere from $2 billion to $5 billion would be our sweet spot. I have said previously that valuations are such that it’s very difficult to find acquisitions that are in that range that would add value for Novartis shareholders. So what’s happened is we have moved upstream in terms of earlier stage assets. So you saw us buy Ziarco is one example for atopic dermatitis and a few others over the last six months.” He referred to a December 2016 deal , where Novartis acquired Ziarco Group Limited , a private company focused on dermatology. As part of the deal, Novartis picked up a once-daily oral H4 receptor antagonist for atopic dermatitis (eczema), ZPL389. No details about the financials of that deal were announced, although in 2015 Ziarco had net sales of $49.4 billion. John Carroll, writing for Endpoints News , points out that a lot of big pharma companies see the M&A market the same way. He notes that Sanofi needs a big, transformational deal more than most, having recently acquired Protein Sciences ’ Flublock for $750 million. “Ask any of them,” Carroll writes, “and you’re likely to hear that biotech valuations just don’t make sense. Anything that looks ripe from a pipeline perspective is likely going to fetch an inflated price. Just ask Pfizer , which paid $14 billion for Medivation and is still trying to explain it to analysts.” Otherwise, in its second quarter results , Novartis confirmed its full year guidance. The company reported net sales for the quarter of $12.242 billion, down 2 percent from the same period in 2016, when it reported $12.470 billion. Net sales for the six-month period were $23.8 billion, down 1 percent from last year’s halfway mark of $24.1 billion. Core operating income for the quarter was $3.2 billion, down three percent from the same period in the previous year. The company indicated that, “Core operating income margin in constant currencies remained flat as generic erosion of Gleevec/Glivec and growth investments were offset by gross margin expansion and productivity. Currency had a negative impact of 0.3 percentage points, resulting in a net decrease of 0.3 percentage points to 26.4 percent of net sales.” Jimenez said in a statement, “Novartis delivered very strong innovation in Q2 including the positive pivotal trial readouts for RTH258, ACZ885 and CTL019 JULIET, demonstrating the strength of our pipeline. We are on track for the full year guidance. The trajectory of the current growth drivers reinforces our confidence in our next growth phase, which we expect to start in 2018.” The company’s key growth drivers include Cosentyx, Entresto, Promacta/Revolade, Tafinlar + Mekinist, Jakavi, Tasigna, Gilenya and Kisqali, in addition to its Biopharmaceuticals and Emerging Growth Markets. Cosentyx brought in $490 million in the second quarter, Entresto brought in $110 million, and Promacta/Revolade made $210 million. Tafinlar + Mekinist reported $216 million in quarterly sales, and Jakavi brought in $186 million, driven by myelofibrosis and the launch of a second-line indication for polycythemia vera. Tasigna raised $463 million, Gilenya brought in $837 million, and Kisqali made $8 million. Biopharmaceuticals for the quarter reported $260 million, up 6 percent, primarily driven by Zarxio in the U.S. Net sales in Emerging Growth markets grew 4 percent, driven by growth in China (10%), Russia (9%), and Brazil (8%).

January 25, 2017 By Mark Terry , BioSpace.com Breaking News Staff While there’s a tendency to focus on big deals, such as Pfizer ’s acquisition of Medivation for $14 billion, Novartis has been quietly making small—very small—deals. In fact, Novartis has indicated that its business plan involves small acquisitions in the $2 to $5 billion range, but in December made four deals well under that size. The company’s chief executive office, Joe Jiminez, recently said at the Novartis annual results news conference, “We look at everything, the bigger the target the higher the premium seems to be right now. We have gone upstream, and, if you heard, in the fourth quarter we announced four transactions that were quite early-stage, but they supplement the pipelines of our innovative medicines divisions.” On November 21, 2016, Novartis announced it had acquired Selexys Pharmaceuticals Coporation , which focuses on hematologic and inflammatory disorders. Terms of the deal could hit $665 million in upfront, acquisition and milestone payments. The company has SelG1, an anti-P-selectin antibody, in late-stage trials to treat vaso-occlusive pain crises in sickle cell disease patients. On December 16, 2016, Novartis acquired Ziarco Group Limited , a privately held company focused on dermatology. As part of the deal, Novartis picked up a once-daily oral H4 receptor antagonist, ZPL389, being developed for atopic dermatitis, better known as eczema. Financial details weren’t released. On December 19, 2016, Novartis inked an exclusive option, collaboration and license agreement with Conatus Pharmaceuticals . Conatus focuses on liver disease. The two companies will jointly develop emricasan, an investigational, first-in-class, oral, pan-caspase inhibitor for non-alcoholic steatohepatitis (NASH) with advanced fibrosis and cirrhosis. Novartis made an upfront payment of $50 million. Once other criteria are met, there will be an additional exercise fee. And on December 20, 2016, Novartis acquired Encore Vision , a private company in Forth Worth, Texas. Encore focuses on treatments for presbyopia, better known as farsightedness. No financial details were released. Encore’s lead product is EV06, a first-in-class topical treatment for presbyopia. In a Phase I/II, placebo-controlled proof of concept study, 50 patients were given daily doses for 90 days of EV06, and 25 received a placebo. EV06 showed a statistically significant improvement in distance vision over placebo. At the meeting, Jiminez didn’t provide information about the company’s $13 billion stake in Roche . But, at the World Economic Forum held in Davos earlier this month, he said he was in no hurry to sell the shares in Roche. Reuters wrote , “The shareholding that amounts to a third of Roche’s voting rights continues to pad Novartis’s profits, adding $464 million to its bottom line in 2016.” Although Novartis only got into immuno-oncology in 2015, it currently has 18 immuno-oncology drugs in its pipeline ranging from immune stimulating drugs, T-cell engineered therapeutics, T-cell modulators and molecules that affect the tumor microenvironment. Jay Bradner , president of the Novartis Institute for Biomedical Research (NIBR) , speaking at the company’s fourth-quarter press conference, said, “Data emerging over the next 12-18 months from Novartis and competitor trials will inform the most impactful paths forward.” Top of the list, CAR-T therapeutic CTL019, expected to be filed for pediatric acute lymphoblastic leukemia (ALL) soon. It also expects a follow-up marketing application in diffuse large B-cell lymphoma (DLBCL) by the end of 2017. “Unlike checkpoint inhibitors,” Bradner noted, “these are definitive medicines. With an 82 percent overall response rate and many patients free of disease five years later, there’s a lot to be learned from this ‘first blush’ of CAR-T cell therapy.”

December 27, 2016 By Mark Terry , BioSpace.com Breaking News Staff Wilmington, Del.-based Incyte Corporation is often cited as a hot acquisition target. In a recent Evercore ISI survey, 244 biotech industry observers listed it as their top target. Keith Speights , writing for The Motley Fool, takes a look at the three most likely buyers in 2017. 1. Gilead Gilead tends to be at the top of everybody’s list. Partly because most investors and analysts really want Gilead to buy something to make up for its faltering hepatitis C sales. And Gilead itself has indicated it wants to strengthen its oncology portfolio. And Incyte’s Jakafi is a big mover in the oncology market, approved for myelofibrosis and polycythemia vera, and may soon be approved for graft-versus-host disease. Speights isn’t convinced that this will happen. He writes, “Incyte’s current market cap stands north of $19 billion. The stock trades at over 70 times forward earnings. To buy Incyte, Gilead would have to pay more than that—perhaps much more. I suspect Millegan (company chief executive officer) has seen plenty of spreadsheets chock-full of details on a potential Incyte acquisition and come away skeptical. 2. Eli Lilly & Co. Eli Lilly & Co. and Incyte have been collaborating since 2009, and Lilly expects to launch baricitinib for rheumatoid arthritis in early 2017. Lilly has a decent oncology portfolio that includes Alimta, Erbitux, and Cyramza, and Jakafi would fit in well. Again, price maybe the issue. Speights writes, “Lilly doesn’t have nearly as much cash as Gilead. To buy Incyte, Lilly would have to increase its debt significantly. I’m not sure that the company would choose that route.” 3. Novartis Incyte and Novartis have also been partnered since 2009, and Novartis markets Jakafi outside the U.S. as Jakavi. And since a potential deal between Novartis and AstraZeneca never emerged as rumored, it’s possible that Novartis might be looking for a bigger deal than the company usually invests in. Speights writes, “Incyte could be the right size. Although Novartis’ cash position is only around $7.8 billion, the company could raise perhaps $14 billion more by selling its stake in Roche .” That said, he suspects it won’t happen. Novartis just bought two smaller, private companies, Encore Vision and Ziarco Group Limited , and in November bought Selexys Pharmaceuticals for $665 million. These are all more consistent with Novartis’ smaller bolt-on acquisitions. But maybe Incyte will buy somebody. Just last week, Incyte inked a collaboration deal with Netherlands-based Merus NV to develop bispecific antibodies for the immuno-oncology market. And Incyte has a stake in a small biotech, Agenus . Speights writes, “Incyte could certainly afford to buy Agenus if it wanted to do so. Agenus’ current market cap is roughly $380 million. Incyte reported a cash stockpile (including cash, cash equivalents, and marketable securities) of $716.6 million at the end of September.” But he doubts whether that will happen, either. In fact, Speights suspects there won’t be an Incyte deal in 2017. But who knows? Certainly a lot of companies have taken a look at Incyte. Maybe everyone will be surprised.