American biotechnology company, Celgene Corp, will buy biotech company, Impact Biomedicines, for $1.1 billion. As part of the acquisition, Celgene Corp will also bring into the fold an experimental blood cancer treatment. The biotech company is said to raise the existing bid to $7 billion over time if the treatment reaches imposed milestones.
According to Celgene Corp’s statement, Impact Biomedicines will receive another $1.25 billion at first if the company’s drug, fedratinib, reaches certain milestones to treat myelofibrosis, a form of bone marrow cancer. Celgene Corp will add another $150 million if other requirements are met. In addition, the company is prepared to invest as much as $4.5 billion if their global annual sales pass the $5 billion mark.
While Impact’s leveled acquisition would be Celgene’s biggest purchases yet, the company is also trying to replace its flagship cancer treatment, Revlimid, before other similar drugs start eating away at their sales. Another stumble from Celgene Corp’s part was when they failed to complete a late-stage trial of their much-anticipated drug for Crohn’s disease. The drugmaker not only had to cut its 2020 profit target but their stock lost a quarter of its value in October.
Celgene Corp shares are still low, having traded 28 percent below their 2017 peak of October as of Friday. Current estimates would render Celgene Corp’s market value at about $83 billion.
Impact Biomedicines was founded in 2016 by John Hood along with other executives. While a CEO of Impact Biomedicines, Hood previously worked at TargeGen Inc, another biotech company, where he co-developed the blood cancer drug, fedratinib. The treatment’s potential was apparent early on, with French drugmaker, Sanofi, acquiring TargeGen Inc in 2010 for an upfront payment of $75 million.
Development of fedratinib was dropped in 2013 after several patients in clinical trials suffered from Wernicke’s encephalopathy, a neurological condition, that forced the FDA to halt the research.
Impact obtained the rights for fedratinib from Sanofi and was able to get the FDA to allow them to resume the trials. The company was able to do so after showing to the FDA that Wernicke’s encephalopathy was common for a patient pool of that size.
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