Written by Mark Osterman, Senior Vice President, Kineticos
Two weeks ago, Pfizer announced that it was acquiring Anacor Pharmaceuticals for $5.2 billion. The impetus for this deal was Crisaborole, Anacor’s phosphodiesterase 4 inhibitor that is currently under development for the treatment of atopic dermatitis; analysts have predicted that Crisaborole could achieve $2 billion in peak year sales. There are a few key points that can be highlighted from this deal.
First, Pfizer like many companies is looking to dermatology as a new therapeutic area of interest. Allergan has demonstrated that therapeutic and cosmetic dermatology applications can serve as the backbone of a successful portfolio and the market has clearly taken notice. Crisaborole, if approved, will be a first-in-class therapy delivered by topical formulation. It will be very interesting to see how the pricing of this agent unfolds, as it will be competing with biologics and other high priced agents currently being investigated for atopic dermatitis.
Second, as with many recent deals, Pfizer paid a significant price premium. This indicates that the current deal environment is extremely competitive, and that there is not an abundance of attractive late stage assets up for grabs. It’s far too early to know if the benefit will surpass the steep costs paid by Pfizer in this transaction, but like most large pharmaceutical companies, Pfizer is forced to look to external partners to fill their pipelines, as their internal R&D productivity is low.
Finally, the timing of this transaction illustrates that large pharmaceutical companies can move swiftly if they feel the need to. The Anacor acquisition was reported less than 45 days after Pfizer walked away from their planned $150 billion Allergan merger. I’m certain the Anacor deal was already being evaluated, but it was critical for Pfizer to have a positive event occur soon after the Allergan deal fell through.
While confidence in the deal landscape has fallen off over the past 6-9 months, this deal is evidence that if you have a compelling technology, even in a not-so-sexy therapeutic area such as dermatology, there is plenty of opportunity.
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Mark Osterman, Senior Vice President of Kineticos’ Biopharmaceutical Practice, brings 25 years of experience in the biopharmaceutical industry to the team. His team is focused on helping growth-oriented biopharma companies realize their commercial potential at the corporate, portfolio and product levels. Mark’s therapeutic expertise includes cardiovascular, pulmonary, metabolics and cell/gene therapy.