Bringing Momenta into the fold strengthens the Janssen Pharmaceutical Companies of Johnson & Johnson’s immune-mediated disease portfolio and grows its interest in autoantibody-driven disease therapies. Roughly 2.5% of the world’s population, 195 million people, have some form of autoantibody-driven disease.
While large, this deal does not fall within the top 20 biotech acquisitions, as the 20th biggest biotech M&A is Eli Lilly and Co.’s $8 billion buyout of Loxo Oncology Inc. in 2019.
Janssen said the acquisition offers the potential for multiple launches, many as first-in-class indications with potential for significant peak year sales, some of which the company said could exceed $1 billion.
Cambridge, Mass.-based Momenta’s stock (NASDAQ:MNTA) surged a dramatic 69% on Wednesday, with shares closing at $52.12 each.
Johnson & Johnson plans to purchase all outstanding Momenta shares for $52.50 each. The transaction’s $6.1 billion estimated net value is based on Momenta's estimated fully diluted shares outstanding, less estimated net cash at closing, which is set for some time before 2020 ends.
A massive part of the deal is full global rights to Momenta’s nipocalimab, an G1 anti-FcRn monoclonal antibody that gives Janssen a wide path to further develop autoimmune disease therapies in maternal-fetal disorders, neuro-inflammatory disorders, rheumatology, dermatology and autoimmune hematology.
Top-line phase II data from an interim analysis of nipocalimab (M-281) in treating generalized myasthenia gravis released in mid-June showed efficacy in the activities of daily living (MG-ADL) score, which was the primary endpoint. Slightly more than half of patients had rapid, significant and durable reductions in MG-ADL scores, at least a 2-point reduction from baseline for at least four consecutive weeks across all four dosing arms vs.15% for placebo (p=0.017).
Momenta also has M-254 (hypersialylated immunoglobulin), dendritic ICAM-3 grabbing nonintegrin 1 modulator for treating idiopathic thrombocytopenic purpura in a phase I study. COVID-19 caused a suspension in April, pushing an anticipated second quarter of 2020 report back and delaying initiation of parts C and D.
J.P. Morgan analyst Eric Joseph wrote Aug. 19 that he was “somewhat surprised by the timing of a deal” with part B data expected in the study. He also wrote that J.P. Morgan “consistently viewed” Momenta as a likely M&A target given the versatility of its pipeline for autoimmune diseases and the disruptive potential of M-254 “within the present, commercially attractive” intravenous immunoglobulin market.
Nipocalimab is also being developed by Momenta to prevent hemolytic disease of the fetus and newborns. The FDA granted nipocalimab rare pediatric disease designation and orphan status in late July.
“Given the work in the space is spearheaded by smaller players, this deal confirms pharma interest in this novel target and the broad applicability of anti-FcRn,” Guggenheim Partners analyst Yatin Suneja wrote Wednesday morning. “We see room for many players.”
One of those players is Argenx SE, of Breda, the Netherlands, which in early July set a new highwater mark for a follow-on offering by a publicly listed European firm, raising $863 million, including the overallotment option, on the back of positive data from a pivotal phase III trial of the anti-neonatal-Fc-receptor antibody fragment efgartigimod in generalized myasthenia gravis. It smashed the previous record of $575 million, which rare disease drug developer Ascendis A/S, of Hellerup, Denmark, raised last year.
SVB Leerink analyst Thomas Smith wrote that he expected strength in Immunovant Inc. shares on Aug. 19, “driven by validation of the substantial FcRn opportunity.” The company’s stock rose 12.9% Wednesday, playing to Smith’s comment that the company “is well-positioned to capitalize on increasing strategic interest in the class, given IMVT-1401’s favorable attributes that include competitive IgG lowering, relatively clean safety/tolerability profile vs. the rest of the FcRn class, and subcutaneous injection formulation.”
The Momenta deal is the first large pharma/large biotech to step into the FcRn space, and the first M&A activity since Alexion Pharmaceuticals Inc. acquired rights to two early stage FcRn agents. Smith also noted that these anti-FcRn agents in clinical development: Argenx’s efgartigimod, Momenta’s nipocalimab, UCB Pharma SA’s rozanolixizumab, Immunovant’s IMVT-1401 and Alexion’s ALXN-1830.
Janssen said it will keep Momenta’s Cambridge, Mass., location, adding to Johnson & Johnson’s presence in the Boston area.
Mergers and acquisitions have waned in 2020, with the Abbvie Inc.’s $63 billion acquisition of Allergan plc in May carrying more than half of the year’s total M&A value.
The 73 completed biopharma M&As so far this year are valued at $121.3 billion. In June, there were 12 completed M&As worth $3.65 billion, which is the second lowest amount for a month in 2020, ahead of February’s $2.97 billion from eight completed M&As. The value of 2020 M&As during the first six months, however, is ahead of where each of the last three years were by the end of June, although the number of M&As is behind 2019.
There was a sharp drop in M&A value going from May to June due to the Abbvie-Allergan deal recorded in May when a total of 17 M&As worth $63.24 billion were completed. It is the highest value and volume month for the year.
The largest completed M&A in June was Novo Nordisk A/S’ acquisition of Corvidia Therapeutics Inc. for $2.1 billion. Other large M&As in June were The Menarini Group’s purchase of Stemline Therapeutics Inc. for $677 million and PTC Therapeutics Inc.’s buyout of Censa Pharmaceuticals Inc. for $526 million. UCB SA also acquired Engage Therapeutics Inc. in June for $270 million.