J.P. Morgan kicks off with a deal as Celgene pays $1.1B for Impact Biomedicines

San Francisco (Pixabay)
The conference, based in San Francisco this week, has kicked off with a modest and mainly back-loaded deal.

As we awake to the first official day of the big biotech conference that is J.P. Morgan, Celgene has come right out on day one with M&A news.

The big biotech says it will spend $1.1 billion upfront for Impact Biomedicines, a tiny startup that got a $22 million series A just three months ago (and later around $90 million in extra funding), all for JAK2 inhibitor fedratinib, a Sanofi castoff.

This represents a whiplash turnaround for fedratinib, albeit one that was enabled by years of work behind the scenes. Fedratinib looked to have run its race when Sanofi pulled the program in response to an FDA clinical hold in 2013. At that time, Sanofi felt the risks of the myelofibrosis and polycythemia vera candidate outweighed the benefits.

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Impact CEO John Hood, Ph.D., who worked on fedratinib at TargeGen before Sanofi bought the biotech, had a different take. The Impact CEO has worked to acquire the rights to the drug from Sanofi, show the safety events that spooked the French Big Pharma are manageable and persuade the FDA to lift its clinical hold. Sanofi gave up the drug in return for a stake in Impact.

Hold lifted back in August, Impact found itself owning a drug backed by data from 877 patients across 18 trials and on the path to near approval. Most importantly, the package includes midphase clinical data showing fedratinib improves outcomes in a group of cancer patients who have limited options today.

And that’s likely what has seen Celgene come knocking on the door, as an NDA for fedratinib in myelofibrosis is “planned for mid-2018,” the biotech says. The drug’s use could also extend to AML and colorectal cancer.

RELATED: Impact bags $22M to save ex-Sanofi drug from trial limbo

Under the deal, Celgene could also pay up to $1.25 billion in contingent payments based on regulatory approval milestones for myelofibrosis. It could also see as much as an extra (and maximum) $4.5 billion in sales and biobucks in the future—an amazing feat for such a small biotech with an ex-Big Pharma drug. Sanofi, which has also rejigged its Alnylam pact over the weekend, has been the subject of much criticism on Bio Twitter over these decisions.

Analysts at Jefferies see the med as a competitor to Incyte’s Jakafi in first line, and says it “looks similar or better in efficacy but also works in Jakafi failures.”

Celgene has been under pressure to deliver something big in 2018; this is a relatively modest deal for it (though major for Impact) - we'll see what else J.P. Morgan brings for the company.