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The American Society of Clinical Oncology (ASCO) is kicking off its annual meeting in Chicago this week, with all eyes on the latest developments and acquisition deals in the pharmaceutical space.
Sanofi (SNY, SAN.PA) is set to buy Blueprint Medicines (BPMC) for over $9 billion, while Bristol-Myers Squibb (BMY) plans to license a cancer drug from BioNTech (BNTX).
BMO Capital Markets managing director of biopharma equity research Evan Seigerman comments on the M&A activity and regulatory oversight in the biopharma space.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Big Pharma deals coming out as Global Giants attend the American Society of Clinical Oncology's annual meeting in Chicago. Sanofi agreeing to buy immunology company blueprint medicines for over $9 billion. Meanwhile, Bristol Myers Squibb will pay Biontech up to $11 billion to license a next generation cancer drug. Joining us now with more on what's to come out of this big Pharma event, we've got Evan Seegerman, BMO Capital Markets managing director of Biopharma Equity Research. Evan, great to speak with you here. I do want to start on this deal for over $9 billion here. What does that signal for you for the rest of the sector?
So I don't cover Sinofi, but I can talk more broadly about what it means for the space and it's great. We love to see M&A. There's been a bit of a dearth in big M&A and this is a nice sizable deal. I know a lot of the companies that I cover talk about doing deals in the 10 to 15 billion dollar range and it signals a few things. One, that there are biotech companies producing great data, but two, that the big players are comfortable, you know, diving in a little deeper, you know, spending $9 billion, not just spending $500 million. So I like to see that because that is the life blood of the sector.
Evan, to what extent do you believe some of these deals are either reactionary or trying to front run any potential moves from the administration on policy?
Hard to say. I mean, a lot of these biopharma companies that I cover have holes in their pipeline. You know, look at Merck, for example, Ketruda goes off patent at the end of the decade, they're going to get hit by the IRA at some point. So they really need to, you know, backfill that. Same thing with Bristol, which is why they decided to license in the asset from Biontech today. They also highlight not in the oncology space, but Regeneron had a huge move last week to the downside and opting into in license an obesity assets. So, you know, more moves than just the Sinofi asset you have the Sinofi deal you had mentioned.
And when you think about regulation more broadly on the sector over the course of the next four years, how do you think that it's going to net out in terms of how that regulation may impact this kind of deal making going forward?
For sure. So I think generally the FTC right now is a little bit more deal friendly, but who knows? Um in terms of FDA, it seems that, you know, even with all the talk, it is a lot of, you know, um business as usual, especially when we talk to the companies that we cover. A lot of their interactions haven't really changed. That's more headline risk. Um I think the big unknown is any sort of drug pricing reform. We had the EO a few weeks ago. Um folks were concerned that that could lead to what's called most favored nations pricing in Medicare. Still haven't seen much on that front. I'm you know, of the belief that it doesn't end up amounting to much, probably more headline risk than anything at this point.
