Nabbing a leukemia portfolio for $900M

Baxter BioScience seeks to expand global oncology footprint with acquisition of Oncaspar

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DEERFIELD, Ill.—Mid-May saw Baxter International Inc. announce it has signed a definitive agreement to acquire the Oncaspar (pegaspargase) product portfolio from Italian company Sigma-Tau Finanziaria S.p.A. The acquisition reportedly “further accelerates the innovation capabilities and the commercial presence of Baxter BioScience in growing oncology markets for rare and orphan diseases.”
The Illinois-based company says that the deal gains it the leading marketed biologic treatment Oncaspar, the investigational biologic calaspargase pegol and an established oncology infrastructure with clinical and sales resources.
In other news, by mid-year, Baxter expects to establish the BioScience business as a separate, publicly traded, innovation-oriented biopharmaceutical company named Baxalta Inc.
Oncaspar is a first-line biologic used as part of a multiagent chemotherapy regimen to treat acute lymphoblastic leukemia (ALL). It is currently marketed in the United States, Germany, Poland and certain other countries and has approximately $100 million in annual sales. ALL is a rapidly progressing cancer of the white blood cells responsible for more than 80 percent of childhood leukemia cases.
“The Baxter BioScience legacy of delivering solutions for orphan diseases and small patient populations and our global presence positions us well to accelerate the growth of the Oncaspar portfolio globally,” said Dr. Ludwig Hantson, president of Baxter BioScience. “With Oncaspar, Baxalta will bring an established standard-of-care therapy to more patients worldwide through the pursuit of additional indications and regulatory approvals across the globe.”
“Oncaspar is a strong strategic fit for our rapidly expanding oncology business, as it complements our R&D programs in hematologic cancers,” added David Meek, head of oncology for Baxter BioScience. “The acquisition provides an immediate commercial footprint in the United States and Europe with a heritage of expertise in treating this challenging disease.”
In addition to the currently marketed formulation of Oncaspar, Baxter BioScience intends to continue the development of a lyophilized formulation, which is being investigated to enhance product stability to support product supply continuity.
As part of the acquisition, Baxter BioScience is also acquiring a related new chemical entity: calaspargase pegol, a biologic in development for the treatment of ALL with an increased shelf life that is expected to reduce dosing frequency. Further, the company plans to investigate Oncaspar for potential new indications, including in additional ALL patient populations with significant unmet needs, as well as for acute myeloid leukemia.
The acquisition is expected to accelerate the company’s efforts to capitalize on the rapidly growing oncology market, with an estimated $10 billion total market potential across current oncology indications for Baxter’s pipeline assets. It also complements recent momentum on several partnerships within the oncology pipeline, including positive Phase 3 results for the investigational treatment pacritinib for myelofibrosis as well as the recent regulatory filings of MM-398 for metastatic pancreatic cancer.
Under the terms of the agreement, Baxter will purchase the portfolio for $900 million before working capital and other transaction adjustments. The company expects to finance the transaction through a combination of foreign cash and debt. This transaction is expected to be accretive to adjusted earnings on a cash basis in the first full year and increasingly accretive thereafter. The closing of the transaction, expected in the third quarter of this year, is subject to regulatory approvals and other customary closing conditions.
The deal follows news in March that Baxter would acquire Martinsried, Germany-based biopharma SuppreMol for $225 million so that it could get access to an early-stage development portfolio of novel biologic immunoregulatory therapeutics for the treatment of autoimmune diseases, focusing on the modulation of Fc receptor signaling pathways—an immune target that could have broad applications in autoimmune disorders.
Danielle Antalffy and Puneet Souda of Leerink Partners, in an analyst note, called the deal “a smart strategic move, as soon-to-be Baxalta begins what we believe will be an effort to reshape and revamp the portfolio in order to further diversify away from the hemophilia business that is facing increasing competition. While we continue to believe that Baxter is holding hemophilia share better than expected, we do believe the company would be well served to continue building out its product portfolio into other potentially higher growth and less competitive markets.”

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