Following on from Johnson & Johnson’s acquisition of Actelion in January 2017 and Takeda’s takeover of Shire two years later, pharma multinationals’ rush to snap up rare disease specialists continues with Ipsen’s proposed acquisition of Clementia Pharmaceuticals. Industry insiders predict that this trend is set to continue well into the 2020s.
Ipsen Betting Big on Rare Disease
The acquisition of Clementia Pharmaceuticals accelerates the ongoing transformation of Ipsen
Ipsen’s USD 1.3 billion move to acquire Clementia – a Canadian biotech focused on two extremely rare bone diseases, fibrodysplasia ossificans progressiva (FOP) and multiple osteochondroma (MO) – will serve to boost the French firm’s rare disease portfolio. Clementia hopes to gain regulatory approval for its potentially lucrative key product, palovarotene – acquired from Roche in 2016 – in 2020.
Ipsen CEO David Meek, who PharmaBoardroom interviewed in October 2018 said of the deal, “The acquisition of Clementia Pharmaceuticals accelerates the ongoing transformation of Ipsen as we are successfully executing on our external innovation strategy to identify and acquire innovative medicines to serve patients with unmet medical needs.”
Clementia’s founder and CEO Clarissa Desjardins, interviewed by PharmaBoardroom back in November 2017, added, “Ipsen’s global commercial presence and capabilities will expedite our shared vision of bringing palovarotene to patients around the world as quickly as possible. We anticipate a smooth transition of our operations into the Ipsen organization that will continue Clementia’s vision of delivering palovarotene to patients worldwide.”
We anticipate a smooth transition of our operations into the Ipsen organization
For Ipsen, this deal represents a significant gamble on rare disease and the potential profitability of palovarotene; one it needs to pay off. Unless the company is willing to add significantly to the debt it is taking on to buy Clementia, the deal will account for the majority of its M&A firepower. That means the hunt for new assets to fuel growth may slow, leaving Ipsen reliant on palovarotene for inorganic growth.
Actelion: Finding Unmet Need
With this type of deal [J&J’s acquisition of Actelion], it’s always important to select a disease area where unmet need remains; if there is no real room to improve on the therapy, then it might well be a struggle to create new value
The Ipsen-Clementia deal represents another milestone in a recent history of rare disease firms being snapped up by pharma multinationals, following on from the Japanese company Takeda’s recent buyout of Shire and J&J’s USD 30 billion acquisition of Swiss success story Actelion in 2017, which made global headlines thanks to its sheer scale.
Jane Griffiths, Actelion’s global head, recently revealed to PharmaBoardroom the rationale behind the deal. She noted that, “With this type of deal, it’s always important to select a disease area where unmet need remains; if there is no real room to improve on the therapy, then it might well be a struggle to create new value. In our case, Janssen gains an entire new franchise enabling it to deliver treatments across the entire continuum of care. Actelion products, meanwhile, benefit from being able to leverage the superior launch capacity and market reach of J&J. There is still a lot of scope for enhancement within the Actelion portfolio: namely new indications that still lie within the pulmonary hypertension (PH) and rare disease space.”
More to Come
Some pundits are predicting the M&A boom to continue throughout 2019 and even into 2020, with companies such as Pfizer, Merck and J&J well-positioned for further acquisitions, especially of companies operating in the rare disease space. In its recently released annual drug pipeline report, investment research firm Morningstar highlights Biogen and Biomarin as prime potential acquisitions for Big Pharma, noting that Biomarin has, “explosive growth potential in haemophilia and ultra-orphan disease” with predicted sales growth between 2017 and 2022 of 19.3 percent, making it among the most undervalued large-cap biopharma stocks.