On Monday, January 8, there was a flurry of activity in the Biotechnology sector. Three large, publicly-traded companies announced acquisitions in the space, representing the third, fourth and fifth Biotechnology transaction of 2024, respectively. Last year, there were 155 Biotechnology deals announced, according to data captured in the LevinPro HC database.
Merck acquires Harpoon Therapeutics:
Merck announced the acquisition of Harpoon Therapeutics through a subsidiary for an approximate total equity value of $680 million.
Harpoon Therapeutics is a clinical-stage immunotherapy company developing a novel class of T-cell engagers designed to harness the power of the body’s immune system to treat patients suffering from cancer and other diseases. According to its fiscal year (FY) 2022 financial report, the company’s revenue for the year ended December 31, 2022 was $31.9 million, and EBITDA was -$65.4 million.
Merck & Co., Inc., known as MSD outside the United States and Canada, is an American multinational pharmaceutical company headquartered in Rahway, New Jersey. Merck is focused on the discovery, development, manufacturing and marketing of prescription medicines, biologic therapies, vaccines and animal health products.
The Harpoon Therapeutics transaction is expected to close in the first half of 2024 and will be accounted for as an asset acquisition. Evercore Group acted as financial advisor to Merck in this transaction and Covington & Burling LLP acted as its legal advisor. Centerview Partners LLC acted as financial advisor to Harpoon and Goodwin Procter LLP acted as its legal advisor.
Johnson & Johnson acquires Ambrx:
Johnson & Johnson announced it has entered into a definitive agreement to acquire Ambrx Biopharma, or Ambrx, in an all-cash merger transaction for a total equity value of approximately $2 billion.
Ambrx is a clinical-stage biotechnology company focused on discovering and developing optimized protein therapeutics known as bio-conjugates. It has developed a pipeline of novel product which includes antibody-drug conjugates. Ambrx was spun out of The Scripps Research Institute in 2003. According to its FY 2022 earnings report, the company reported revenue of $7.4 million for FY 2022, and EBITDA was approximately -$73.3 million.
Johnson & Johnson is one of the largest global healthcare and pharmaceutical companies with more than 130,000 employees worldwide. Its business lines include pharmaceuticals, medical devices and consumer healthcare products. According to its most recent financial report, Johnson & Johnson’s revenue for the twelve months ending September 30, 2023 was $99.1 billion, and EBITDA was approximately $25.7 billion.
The Ambrx deal, which is expected to close in the first half of 2024, will see Ambrx merged with a subsidiary of Johnson & Johnson. The planned acquisition presents a distinct opportunity for Johnson & Johnson to design, develop and commercialize targeted oncology therapeutics.
This deal follows Johnson & Johnson MedTech‘s November 2023 acquisition of Laminar for an upfront payment of $400 million. Johnson & Johnson Medtech is Johnson & Johnson’s medical technology business, helping the healthcare industry by providing surgery and orthopedics-related products.
Novartis acquires Calypso Biotech:
Novartis rounded out the pack with its acquisition of Calypso Biotech for an upfront payment of $250 million. This follows its acquisitions of SanReno Therapeutics and assets from Voyager Therapeutics, both announced during the first week of January 2024. During 2023, the company made four acquisitions in the Biotechnology and Pharmaceutical sectors, amounting to nearly $5.6 billion.
Calypso’s shareholders will receive an upfront payment of $250 million upon closing and are eligible to receive development milestones of up to $175 million based on the achievement of certain predetermined milestones.
Calypso Biotech, a spin-out from Merck, is a private biotechnology company focused on the research and development of novel biologics to address unmet medical need in autoimmune and inflammatory diseases. Calypso’s lead product candidate, CALY-002, a potential best-in-class therapeutic antibody that binds to and neutralizes Interleukin-15. CALY-002 is currently evaluated in a Phase 1b trial in patients with Celiac Disease and Eosinophilic Esophagitis. Calypso was founded by M Ventures, the corporate strategic venture arm of Merck.
Novartis AG is a global pharmaceutical company that researches, develops, manufactures and markets a range of healthcare products. According to its 2022 FY annual report, Novartis reported its annual revenue for 2022 was $51.8 billion, and EBITDA was approximately $9.2 billion.
The acquisition gives Novartis full rights to CALY-002. Novartis intends to further explore CALY-002 across a wide variety of autoimmune indications with high unmet medical need. Lazard acted as financial advisor and Goodwin Procter LLP acted as legal counsel to Calypso.
