| |   | Meghana here. Hope you had a restful snowpocalypse weekend (if you were so affected, like this newsletter writer.) Joining me is Adam, writing about XBI, and Matt, covering the GSK courtship. | | | When vaccine makers don't call the shots The FDA plans on working with an international coalition of regulators to decide when, if, and how it might be best to update Covid-19 vaccines so they can better target Omicron and other variants. This approach would make sure decisions aren’t left to individual vaccine makers, STAT’s Helen Branswell reports. The WHO has been trying to organize a process like this for Covid-19 vaccines for quite some time; last week, regulatory agencies around the world met to discuss how this could come to fruition. “We can’t have our manufacturers going will-nilly [saying], ‘Oh well, the EMA decided they wanted this composition, but FDA wanted that composition,” a senior FDA official told STAT on the condition of anonymity. “So we are very much of the mind that we would like to be part of a more global process in helping to come to what vaccine composition there should be now.” Read more. | Price tag for GSK’s consumer biz? At least $68 billion There’s nothing like some weekend merger drama. Saturday, Britain’s Sunday Times reported consumer products giant Unilever had made a $68 billion bid for GSK. Unilever confirmed its interest, and later that morning GSK issued its own statement, saying it had received three unsolicited proposals from Unilever, including one on Dec. 20 that was $56 billion in cash and $12 billion in stock. On Monday, Unilever issued a press release confirming it sees the GSK business as an attractive asset.
The news represents some upside for GSK, as some investors have called for a reconsideration of the firm’s strategic direction. It means that the consumer division, which makes Advil, Chapstick, and Tums, is likely worth more than investors have been estimating. But it also throws a bit of a monkey wrench into expectations for both companies. GSK plans to spin out the consumer business this year and use the proceeds to fund drug development. Unilever, meanwhile, is facing its own challenges and some analysts are worried it will overpay.
As for GSK investors? Peter Welford, an analyst at Jefferies, wrote in a note to clients that the spinoff is widely viewed as an event that could crystalize value, and that a sale might actually dampen near-term appetite for the stock. But such discussions always come down to price. Welford wrote that the deal represents only a 10% premium to his estimate of the consumer business now. If Unilever wants the deal, it will probably need to take some Tums and raise the price. | Early Bird Access Extended: The Breakthrough Science Summit For one more week only, access our best rates! On March 31, we're gathering knowledgeable insiders - from pharma executives to cutting-edge researchers - to hear their takes on the innovations in tech and procedures that are set to change the face of health and medicine. Early bird pricing ends Friday, Jan. 21 so get your pass now! | Knife, meet hand That’s Baird analyst Brian Skorney summing up on Friday (with good humor) the first 10 trading days of the year, in which biotech’s most closely tracked stock index, the XBI, is down 13%. The S&P 500 is down 3%. By definition, sell-side analysts are prohibited from being pessimists, but Skorney often comes close. Call him a realist when it comes to the volatile nature of biotech investing. So, it was a noteworthy departure for Skorney when he started the year with a bullish outlook for biotech stocks, predicting a “strong relative performance” for 2022.
Skorney, get that hand looked at.
Then there’s Jefferies analyst Mike Yee, biotech’s most preternaturally optimistic sell sider. To Yee, adversity in the market is usually just another reason to buy stocks. But not Friday, when Yee, looking unusually morose, turned on his video camera to rant about why everything in biotech is terrible and it's not getting better anytime soon. “The tone out there is one of significant depression,” he said.
We’re only two weeks into the year. Everyone needs to pace themselves. | Oral JAK inhibitors now approved The first oral JAK inhibitors have been approved by the FDA: AbbVie’s Rinvoq, or upadacitinib, or Rinvoq, and Pfizer’s Cibinqo, or abrocitinib, have both been cleared to treat moderate-to-severe atopic dermatitis. The drugs do face some stiff competition from Dupixent, a potent monoclonal antibody from Sanofi and Regeneron. But analysts think both Rinvoq and Cibinqo will ultimately become widely prescribed — with an edge given to Rinvoq, thanks to a more extensive safety profile. Rinvoq could help AbbVie avoid some losses it will incur once Humira loses U.S. market exclusivity next year, Mizuho posits. Cibinqo will likely have a smaller effect on Pfizer’s broader picture, but could subtly impact how investors view its R&D pipeline. | More reads - At Davos, a ‘good news, bad news’ message emerges about Covid-19. (STAT)
- Martin Shkreli is ordered to pay $64 million and is banned from the pharma industry for life. (STAT)
- Illumina says EU probe of $8 billion Grail deal could hit biotech investment. (Financial Times)
| Thanks for reading! Until tomorrow,  | | | |
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