Pharmaceutical company Sanofi is to exit cancer treatment developer Impact Biomedicines, which was acquired by fellow pharmaceutical firm Celgene for $1.1bn up. The transaction is comprised of Celgene paying $1.1bn up front. However, over $6bn more in capital may come contingent on specific milestones: up to $1.4bn more depend on milestones related to approvals for myelofibrosis and other indications, while sales-based milestones could potentially reach $4.5bn.
Founded in 2016, Impact Biomedicines develops therapies for complex cancers based on fedratinib, an oral small-molecule inhibitor of the JAK2 kinase enzyme, which addresses bone marrow disorders polycythemia vera and myelofibrosis. Impact had acquired the development and commercialisation rights for fedratinib from Sanofi, which in turn took an equity stake of undisclosed size in the company. Sanofi had originally developed fedratinib but its roll-out came to a halt in 2013 when the US Food and Drug Administration issued a clinical hold order. After acquiring the rights, Impact managed, however, to convince the regulator that the issues were solvable and the hold was rescinded.
This is a record-setting transaction within the exits from life sciences companies involving corporate investors, which we at GCV Analytics track. The number of such exits has been in a steady decline since 2014, as shown on the historical bar chart below. However, that decline can attributed largely to the decreasing number of initial public offerings (IPOs) of such companies, while the number of acquisitions has remained fairly stable during that period. It remains to be seen whether this large acquisition portends a better year for life science and health exits.
