Merck is buying Terns Pharma for $6.7 billion

The Merck deal values Terns at $53 per share, or a 6% premium to its closing price yesterday. Terns' stock price increased six-fold over the past six months, based on the blockbuster potential of its leukemia drug, called TERN-701, and investor speculation that the company would be an attractive takeover target.

TERN-701 has garnered considerable attention for its potential to be superior to Scemblix, Novartis' current and best-in-class leukemia drug with 2025 sales of $1.3 billion. Novartis recently increased its peak sales forecast for Scemblix to $4 billion from $3 billion.

For Merck, acquiring Terns deepens its cancer drug pipeline as the pharma giant prepares to lose patent protection and revenue from its blockbuster cancer immunotherapy drug Keytruda.

pharma

Lilly's oncology head shows how bringing in outsiders can pay off

Jacob Van Naarden was brought into Eli Lilly when the pharma giant bought Loxo Oncology in 2019. Van Naarden, the former chief operating officer of Loxo, quickly climbed the ranks and now, as head of oncology research, is himself evaluating potential acquisitions all the time.

His journey is an unconventional one one. In the tech world, deals that are done to bring in talent — acqui-hires — are common, but not in the pharma industry.

Lilly, however, has shown a pattern of taking in external talent and making them key players. Several of Loxo's executives are now in leadership positions at the pharma company. Lilly's chief scientific officer, Dan Skovronsky, also joined when Lilly acquired the firm he founded, Avid Radiopharmaceuticals.

My colleague Matt Herper profiled Van Naarden — who also serves as Lilly's head of business development — to learn about his path from outsider to top exec, and his plans for the future of Lilly's oncology business.

BIOTECH

Maze reports early data on drug for genetic form of kidney disease

Maze Therapeutics said this morning that its experimental drug reduced a marker of kidney dysfunction in a mid-stage study of patients with a genetic form of kidney disease.

The Maze drug, a pill called MZE829, lowered levels of proteinuria, or protein in the urine, by an average of 36% after 12 weeks. Half of the 12 evaluable patients achieved proteinuria reductions of at least 30%, the company said.

The Phase 2 study was designed as a proof of concept to determine the preliminary safety and efficacy of MZE829 as a treatment for APOL-1-mediated kidney disease, or AMKD. a kidney disease caused by mutations in the APOL-1 gene. AMKD progresses more rapidly than other types of kidney disease and can lead to dialysis and kidney failure.

MZE829 is designed to treat AMKD by blocking the function of the APOL-1 protein.

Three patients enrolled in the Maze study were excluded from the efficacy analysis for compliance reasons. Across all 15 patients, no serious drug-related side effects were reported. The most common side effects reported were headache and diarrhea. A single patient discontinued treatment due to nausea, the company said.

Based on the preliminary results, Maze said it intends to advance MZE829 into late-stage clinical trials.

Vertex Pharmaceuticals is developing a drug for AMKD, called inaxaplin, that is being investigated in an ongoing Phase 3 clinical trial.

biotech

Soon-Shiong slammed by FDA for 'misleading' claims

The FDA harshly criticized ImmunityBio and its founder, Patrick Soon-Shiong, for making several "false and misleading" claims about a cancer treatment in television ads and a podcast.

In a March 13 warning letter to ImmunityBio (which was posted online yesterday), the agency noted that the drug, Anktiva, is marketed as a treatment for a type of bladder cancer, but both the ad and podcast suggested it was able to treat "all cancers."

The FDA also said material facts were omitted and risks were downplayed. ImmunityBio's stock plunged 21% yesterday on the news.

pharma

Eli Lilly and the 'societal obligation' of GLP-1s

From my colleague Damian Garde: Eli Lilly is worth nearly $1 trillion because it is very good at inventing drugs that help people lose weight, and the world is home to millions of people who would like to do so. That success comes with a "societal obligation" to investigate whether GLP-1-targeting drugs can do more than treat obesity, diabetes, and cardiovascular disease, said David Hyman, Lilly's chief medical officer.

Following promising results from small studies, Lilly is testing whether its weight-loss medicines can treat depression, alcoholism, and substance use disorder. "There's no positive business case associated with that," Hyman said at a BMO Capital Markets event in New York yesterday. Said another way, Lilly doesn't view alcoholism as a profit center.

And each study could easily fail. The biological link between GLP-1 and diabetes is clear as day; the correlation with depression, not so much.

"It's been pretty hard to run a negative randomized study of these medicines, but no doubt we'll achieve that lofty goal at some point in the future," Hyman said with a smile.

pharma

Kickback penalties are a tiny cost for drugmakers

The U.S. government penalizes pharma companies for paying kickbacks to boost physician prescribing of their drugs or to cause Medicare or Medicaid to overpay for medicines.

But in reality, the penalties may not do much to dissuade drugmakers. They made up just 2.2% of the total U.S. revenue that the pharma companies made by selling the drugs during the past quarter century, according to a new analysis.

These findings suggest that the penalties are seen by pharmaceutical companies as a cost of doing business, because the improper business practices yield sufficient sales to dwarf the expense of penalties, the researchers said.