On June 2, 2021 Illumina reported that multibillion-dollar deal for cancer blood test developer Grail was already under an antitrust microscope in the U.S. and Europe. Now, the watchdogs have raised a new threat (Press release, Illumina, JUN 2, 2021, View Source [SID1234583608]).

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A federal court allowed U.S. regulators to potentially postpone their action to block the deal, pending legal outcomes across the pond—all while the deal runs up against a deadline set to expire before the end of this year.

Illumina CEO Francis deSouza described the Federal Trade Commission’s latest move as "time-wasting maneuverings" in a report from the Financial Times, after the agency asked a San Diego federal judge to drop the challenge it originally b
Under the watchful eye of regulators, the CMC team, medical affairs specialists, and ongoing gap analyses keep businesses in a constant state of refinement — driving better purity, yield, and scale-up.

The FTC originally intervened by claiming Illumina’s ownership of a proprietary cancer diagnostic could harm similar development efforts by other test makers, which almost assuredly rely on the company’s DNA sequencing hardware, with Illumina’s instruments and consumables making up about 75% of the global market.

Though court proceedings on a potential injunction against the buyout had been scheduled for early August, the FTC said moving forward would not be appropriate while European regulators are also holding up the deal, according to The Wall Street Journal.

The court granted the FTC’s withdrawal request but left the door open for the agency to pick up the case again internally later this year. The deal’s terms state the $8 billion transaction must close by December 20 at the latest.

RELATED: Illumina sues European Commission to stop investigation of $8B Grail acquisition

"The biggest challenge is getting the FTC to move with the appropriate sense of urgency and getting the FTC to stop the time-wasting maneuverings and just focus on the case and get this case to trial," deSouza told the FT.

Meanwhile, in Brussels, Illumina is mounting a separate legal challenge to an antitrust crackdown, saying the E.U. has no jurisdiction because Grail does no business in Europe. The commission’s directorate-general for competition took up the case after receiving requests from six countries: Belgium, France, Greece, Iceland, the Netherlands and Norway.

First announced last September, Illumina’s quest to buy back its own former spinout would give it a strong footprint in clinical testing, with Grail planning to launch its Galleri cancer screening blood test in the U.S. this year.

Designed to detect and trace the locations of as many as 50 different tumors from DNA found in a single blood draw, the Galleri test could reach 50 million people after its initial launch and before a full FDA submission slated for 2023, Ilumina has said, as the DNA sequencing giant plans to throw its manufacturing and marketing weight behind the effort.

RELATED: Illumina to pay $8B to reacquire cancer blood test maker Grail, with all eyes on 2021

Since it struck out on its own from Illumina in 2016, Grail has grown to more than 430 employees and raised nearly $2 billion in venture capital money, including investments from Bill Gates, Jeff Bezos and others, to support a clinical testing program spanning 115,000 participants with and without cancer.

And after regulators raised their concerns, Illumina pledged new standard contracts and guarantees to sequencing access for its oncology customers, alongside a commitment to lower prices by more than 40% over the next four years.

The contracts include 12 years’ supply of sequencing instruments and consumables with no price increases, and a promise not to discontinue the sale of any product as long as it’s being purchased by a cancer test developer.

On June 2, 2021 MorphoSys AG (FSE: MOR; NASDAQ: MOR) ("MorphoSys"), and Constellation Pharmaceuticals, Inc., (NASDAQ: CNST) ("Constellation") reported that they have entered into a definitive agreement whereby MorphoSys will acquire Constellation for $34.00 per share in cash, which represents a total equity value of $1.7 billion (Press release, Constellation Pharmaceuticals, JUN 2, 2021, View Source [SID1234583376]). The transaction has been unanimously approved by the management board (Vorstand) and the supervisory board (Aufsichtsrat) of MorphoSys, as well as the Board of Directors of Constellation and is expected to close in the third quarter of 2021.

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Constellation is a clinical-stage biopharmaceutical company using its expertise in epigenetics to discover and develop novel therapeutics that address serious unmet medical needs in patients with various forms of cancer. Constellation’s two lead product candidates, pelabresib (CPI-0610), a BET inhibitor, and

CPI-0209, a second-generation EZH2 inhibitor, are in mid- to late-stage clinical trials and have broad therapeutic potential to offer meaningful benefits to patients with various hematological and solid tumors. Pelabresib has the potential to be a first- and best-in-class BET inhibitor and is currently in Phase 3 clinical trials for myelofibrosis, a bone marrow cancer that disrupts the body’s normal production of blood cells. CPI-0209 is currently in Phase 2 with best-in-class potential for treating hematological and solid tumors. Constellation’s pipeline also includes numerous preclinical compounds.

"This transformational acquisition represents a major step forward for MorphoSys as we bolster our position in hematology-oncology," said Jean-Paul Kress, M.D., Chief Executive Officer of MorphoSys. "Both pelabresib and CPI-0209 have broad potential and we look forward to unlocking their full benefits for cancer patients. Our existing clinical and commercial expertise is ideally suited to accelerate Constellation’s programs, enabling us to maximize Constellation’s potential and bring these novel therapies to market. With Constellation’s high-potential product candidates, complementary R&D capabilities, and outstanding team, we can further advance our mission in the fight against cancer."

"We are proud that MorphoSys has recognized the strength of our team, our expertise in epigenetics, and our high-potential oncology development pipeline and discovery programs," said Jigar Raythatha, President and Chief Executive Officer of Constellation. "Becoming part of MorphoSys creates an industry leader with commercial capabilities, a deep R&D pipeline and complementary small molecule and biologics discovery and translational capabilities, as well as the financial strength to compete to win. Our shareholders will receive attractive, immediate and certain cash value for their shares, the employees of the combined entity will have a broader platform and greater opportunities, and patients will potentially benefit from innovative new therapies that address serious unmet needs."

Strategic Funding Partnership with Royalty Pharma

MorphoSys also announced that it has entered into a long-term strategic funding partnership with Royalty Pharma plc (Nasdaq: RPRX) ("Royalty Pharma") (together with the Constellation transaction, the "Transactions"). The terms of the agreement between MorphoSys and Royalty Pharma provide for the following, under certain conditions and upon closing of the transaction with Constellation:

$1.425 Billion Upfront Payment: Royalty Pharma will make a $1.425 billion upfront payment to MorphoSys, supporting its growth strategy. The proceeds will be used to support the financing of the Constellation transaction and development of the combined pipeline.
$350 Million Development Funding Bonds: Royalty Pharma will provide MorphoSys with access to up to $350 million in Development Funding Bonds with the flexibility to draw over a one-year period.
Milestone Payments: Royalty Pharma will make additional payments of up to $150 million to MorphoSys upon reaching clinical, regulatory and commercial milestones for otilimab, gantenerumab and pelabresib.
Royalties: Royalty Pharma will have the rights to receive 100% of MorphoSys’ royalties on net sales of Tremfya, 80% of future royalties and 100% of future milestone payments on otilimab, 60% of future royalties on gantenerumab, and 3% on future net sales of Constellation’s clinical stage assets (pelabresib and CPI-0209).
Equity Investment: After completion of the transaction and subject to the required approvals of the management board (Vorstand) and the supervisory board (Aufsichtsrat) of MorphoSys, Royalty Pharma is expected to invest $100 million in a cash capital increase of MorphoSys under an authorization to exclude subscription rights of existing shareholders. The new MorphoSys shares will be listed on the Frankfurt Stock Exchange.
Jean-Paul Kress continued, "We are thrilled to announce this partnership with Royalty Pharma, which is providing more than $2 billion to fuel our proprietary drug development and commercialization. We are confident they will be a strong financial partner for years to come, enabling us to fund our growth and – with the addition of Constellation’s innovative pipeline – bring our attractive new candidates to patients."

"In acquiring Constellation, MorphoSys has a significant opportunity to drive clinical and commercial success," said Pablo Legorreta, Chief Executive Officer of Royalty Pharma. "We are excited to join forces to further advance the combined company’s pipeline and positively impact patients."

Benefits of the Transaction

Accelerates Growth Strategy with Exciting Mid- to Late-Stage Product Candidates. The transaction accelerates MorphoSys’ strategy to grow through proprietary drug development and commercialization. Constellation’s lead product candidates, pelabresib and CPI-0209, have broad potential, with expected approvals across a range of oncology indications in the coming years. Constellation’s lead compounds fit well with MorphoSys’ proven clinical development, regulatory and commercial capabilities, and MorphoSys is well positioned to rapidly advance and unlock the potential of the Constellation portfolio.
Bolsters Position in Hematology-Oncology and Expands into Solid Tumors. Constellation adds an attractive, complementary pipeline of highly innovative late- to early-stage cancer therapy candidates, augmenting MorphoSys’ existing pipeline in hematologic malignancies and expanding into potential therapies for solid tumors.
Strengthens Cutting-Edge Research and Technology Organization. The transaction leverages MorphoSys’ expertise in biologics and Constellation’s expertise in epigenetics and small molecule discovery platforms to develop a broad range of oncology therapies. Constellation adds exciting, pioneering science and attractive preclinical compounds targeting epigenetic regulators. Together, MorphoSys’ and Constellation’s highly talented research and development teams will strengthen earlier stage and emerging science to bring exciting new cancer therapies to patients.
Anchored by Strategic Funding Partnership. Royalty Pharma’s strategic funding partnership will fuel the expansion of the combined company’s capabilities to help accelerate the development, approval and commercial reach of breakthrough cancer treatments. This long-term commitment will help deliver significant value to all stakeholders.
Transaction Details

Under the terms of the merger agreement, an indirect wholly-owned subsidiary of MorphoSys will promptly commence a tender offer to acquire all of the outstanding shares of Constellation’s common stock at a price of $34.00 per share in cash. Following successful completion of the tender offer, MorphoSys will acquire all remaining shares not tendered in the offer through a second step merger at the same price as in the tender offer.

MorphoSys plans to pay an all-cash consideration for the transaction. The tender offer is not subject to a financing condition.

The purchase price of $34.00 per share in cash represents a premium of approximately 70% to Constellation’s volume-weighted average price for the last five trading days.

Consummation of the tender offer is subject to various conditions including a minimum tender of at least a majority of outstanding Constellation shares, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the receipt of any approvals or clearances required to be obtained under the applicable antitrust laws, and other customary conditions. The transaction is expected to close in the third quarter of 2021.

Following close, MorphoSys will remain headquartered in Munich, Germany, and will maintain a significant commercial and R&D presence in Boston, Massachusetts.

Advisors

Goldman Sachs Bank Europe SE acted as financial advisor to MorphoSys and Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor. Centerview Partners LLC acted as financial advisor to Constellation and Wachtell, Lipton, Rosen & Katz as its legal advisor. Goodwin Procter LLP acted as legal advisor to Royalty Pharma.

Conference Call

MorphoSys will host a conference call and webcast to discuss the transaction on June 2, 2021 at 2:00 p.m. CEST, or 8:00 a.m. EDT. The webcast and accompanying slides can be accessed in the Media and Investors section, under Conferences, of MorphoSys’ website at View Source or at View Source After the call, a slide-synchronized audio replay of the conference will be available at the same location.

On June 2, 2021 Servier and LabCentral reported that the Servier Spark Award* 2021 goes to New Equilibrium Biosciences, a biotech that develops small molecules targeting intrinsically disordered proteins (Press release, Servier, JUN 2, 2021, View Source;utm_medium=rss&utm_campaign=servier-spark-award-goes-to-new-equilibrium-biosciences [SID1234583393]). This award will allow New Equilibrium Biosciences to continue developing its preclinical programs in Oncology and potentially in other therapeutic areas.

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New Equilibrium Biosciences develops small molecules from original structural studies of intrinsically disordered proteins, proteins involved in different pathologies, in Oncology or in Neurology. Due to the dynamism of their structures, these proteins are generally difficult to target and to inhibit. The original approach of New Equilibrium Biosciences could allow breakthroughs in the field. The first indications on which New Equilibium Biosciences are focusing are breast cancer or rare cancers.

New Equilibrium Biosciences’ line of research is aligned with Servier’s commitment to support innovation in Oncology and Neurology: "Intrinsically disordered proteins represent an attractive class of potential drug targets across a variety of disease indications and states. New Equilibrium Bio’s synergistic data- and wet-lab driven approach, backed by a strong team of scientific entrepreneurs, is well suited to tackle this challenge in two of Servier’s therapeutic areas of interest. We are proud to support their efforts at this early stage." said Christian Schubert, Global Head of External Innovation at Servier.

*The Spark Award (also known as Golden Ticket) is part of Servier’s sponsorship with LabCentral. This award allows the winning start-up to have access to LabCentral’s facilities, by covering the operating costs of a researcher for one year, thus giving the wining biotech the means to focus all its efforts on their scientific development. This prize is also intended to forge links between the winning biotech and Servier’s research teams, by opening a scientific dialogue.

On June 2, 2021 Harvard University reported that it has granted an exclusive license to biotechnology company Obatala Sciences to commercialize innovations that enable the study of human fat tissue in vitro (Press release, Obatala Sciences, JUN 2, 2021, View Source [SID1234583408]). Harvard Office of Technology Development and Obatala, which manufactures stem cell and hydrogel products to enable next-generation therapeutics discovery, announced the agreement today .

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Obatala Sciences operates in the organ-on-a-chip or microphysiological system industry, a fast-growing scientific field that enables pharmaceutical companies to better model human response to therapies, in comparison to traditional laboratory approaches. The licensed Harvard technology, an adipose-on-a-chip, provides a method of obtaining adult-size fat tissue cells for study in vitro and enables the testing of weight loss and cancer-targeting therapeutics without the need for testing in animals. The adipose chips can respond to starvation and simulated meals, and they demonstrate key hormonal activity that is a hallmark of adipose as a functional organ. This ground-breaking technology provides a more accurate and dynamic model of human tissue in its diseased state compared to traditional two-dimensional culture.

The adipose chips were developed by researchers led by Kit Parker, PhD, the Tarr Family Professor of Bioengineering and Applied Physics at Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS) and Associate Faculty member of Harvard’s Wyss Institute for Biologically Inspired Engineering. Parker’s lab at Harvard SEAS developed and demonstrated novel methods of culturing human fat cells to model a diseased state in vitro. The findings were published, for example, in the journal Lab on a Chip (2020). The worldwide license agreement with Harvard enables Obatala to make the technology widely available for researchers’ use in drug discovery and R&D.

As a key part of its mission, Obatala promotes diversity in clinical research with the goal of speeding up the development of better therapies for diseases like obesity, diabetes, and cancer, which disproportionately affect minority populations. The company has rapidly grown to establish a robust pipeline of stem cells, unique human-derived hydrogels, and media products that combine to mimic tissue from patients of specific populations.

"We are elated to be able to expand access to transformational research tools from Harvard that may help speed up the research and discovery of better treatments for patients who are traditionally excluded from clinical trials and those who need them the most," said Obatala Sciences CEO Trivia Frazier, PhD, MBA. "The adipose chip technology provides us another crucial tool to promote diversity in research and improve outcomes for all patients. Organ-on-a-chip technology is revolutionary and may forever change the way we approach drug discovery on a global scale."

"I am excited for the translation opportunity that the license to Obatala represents for these technologies developed in the Disease Biophysics Group at Harvard," Parker said. "Trivia and I have talked for almost a year now and share a vision of how organs on chips can enable innovation in the pharma and biotech industries, and how the spin-off technologies represent new therapeutic opportunities in and of themselves. I’m hopeful that my lab’s innovations in tissue engineering may lead to numerous impactful uses of synthetic adipose, including this effort to accelerate the development of better treatments for disease."

Frazier, a New Orleans native, said Obatala is the first life sciences firm based in New Orleans that is run by an African-American woman. To date, Obatala has received more than $2 million in federal funds to support the commercialization of its hydrogels and media products, and it has made history as the first minority female-owned firm to raise over $1 million in institutional funds to grow a biotechnology enterprise in Louisiana.

The license agreement with Harvard, Frazier said, will help Obatala expand its offerings of microphysiological systems that biomedical researchers can use to mimic various tissues throughout the human body. In consideration for the license, the university has received equity in the company and is eligible to receive royalties on resulting products. The license agreement also includes global access provisions, in keeping with Harvard’s longstanding commitment to promote equitable access to technologies of significant public health benefit in developing countries.

On June 2, 2021 Sysmex Inostics, Inc., a global leader in the liquid biopsy revolution for oncology, reported that it is presenting the poster entitled, "Ultra-sensitive detection and quantification of human papillomavirus (HPV) DNA in the plasma of patients with oropharyngeal squamous cell carcinoma (OPSCC) enrolled in the OPTIMA 2 treatment de-escalation trial" at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting, June 4-8, 2021 (Press release, Sysmex Inostics, JUN 2, 2021, View Source;301303731.html [SID1234583425]). The featured data show that SafeSEQ cfHPV-DNA Test (HPV-SEQ) exhibits robust quantitative detection of cell-free HPV DNA (cfHPV-DNA) across a broad dynamic range, enabling high-resolution monitoring for patients with HPV+ OPSCC, a type of head and neck cancer. The ASCO (Free ASCO Whitepaper) presentation coincides with the launch of HPV-SEQ as the newest CLIA validated assay in the Sysmex Inostics portfolio of ultra-sensitive SafeSEQ NGS panels.

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HPV 16 and HPV 18 are the two most common high-risk HPV strains, and persistent infections can lead to HPV-related cancers, including cervical, anal, and head and neck cancers. HPV driven tumors are increasing in prevalence, especially in patients presenting with head and neck cancer.1 cfHPV-DNA can be measured in patients’ plasma as a non-invasive surrogate of tumor burden and can facilitate precise tracking of disease response throughout treatment.

Sysmex Inostics has introduced HPV-SEQ, an ultra-sensitive blood-based liquid biopsy solution for identifying and accurately quantifying circulating HPV 16 and HPV 18 DNA in patients with HPV-related cancers.

As patients with HPV-driven tumors often have a good prognosis, clinical investigators have recently explored new strategies for treatment de-escalation to avoid unnecessary side-effects caused by overtreatment. Important clinical data for HPV-SEQ was generated during the recent OPTIMA 2 phase II trial (NCT03107182) investigating induction chemoimmunotherapy followed by risk/response stratified de-escalated locoregional therapy for patients with HPV+ OPSCC. During the trial, HPV-SEQ was employed to evaluate levels of cfHPV-DNA alongside patients’ radiographic response to therapy in order to assess the future utility in guiding treatment de-escalation strategies. HPV-SEQ showed robust quantitative detection of HPV 16/18 across a broad dynamic range over five orders of magnitude with low quantitative variability. Importantly, a high correlation was observed between dynamic changes in patients’ cfHPV DNA levels and radiographic responses following induction therapy.

"HPV-SEQ exhibits robust quantitative detection of HPV, even when only a few copies are present, thus potentially enabling precise molecular monitoring of patients’ therapy response," said Dr. Nishant Agrawal, Professor of Surgery at the University of Chicago. Dr. Agrawal added, "We see the HPV-SEQ test becoming an important tool for refining patient treatment strategies and accelerating the development of novel de-escalation approaches for the treatment of HPV-associated OPSCC."

Poster number 6048, "Ultra-sensitive detection and quantification of HPV DNA in the plasma of patients with oropharyngeal squamous cell carcinoma (OPSCC) enrolled in the OPTIMA 2 treatment de-escalation trial," presented by Hillary Sloane, PhD, Associate Director of Medical & Scientific Affairs at Sysmex Inostics, will be available June 4 through June 8, 2021 during the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting.

Currently, HPV-SEQ is being used in prospective studies to further evaluate the kinetics of cfHPV-DNA as a predictor of response to therapy in patients with HPV+ OPSCC and other HPV-related cancers. HPV-SEQ is CLIA-validated and available to support clinical trials through the Sysmex Inostics turnkey testing service in their CLIA lab located in Baltimore, Maryland.

1. Van Dyne EA, Henley SJ, Saraiya M, Thomas CC, Markowitz LE, Benard VB. Trends in Human Papillomavirus–Associated Cancers — United States, 1999–2015. MMWR Morb Mortal Wkly Rep 2018;67:918–924.