AbbVie announces another multibillion dollar acquisition, while Roche jumps into the GLP-1 rivalry

Two of Big Pharma’s best-known names announced noteworthy acquisitions last week: AbbVie agreed to acquire Cambridge, Mass.-based Cerevel Therapeutics for approximately $8.7 billion in cash, and Roche signaled its intent to become a contender in the burgeoning weight-loss field by agreeing to acquire Berkeley, Calif.-based Carmot Therapeutics for $2.7 billion in cash up front and potentially another $400 million in milestone payments.

By acquiring Cerevel, AbbVie will augment its neuroscience pipeline with multiple clinical-stage and preclinical drug candidates. Chief among them is emraclidine, a next-generation antipsychotic in late-stage development as a treatment for schizophrenia. AbbVie noted that emraclidine also has potential in dementia-related psychosis associated with Alzheimer’s disease and Parkinson’s disease.

Richard Gonzalez, AbbVie’s CEO, said, “Our existing neuroscience portfolio and our combined pipeline with Cerevel represents a significant growth opportunity well into the next decade.”

The boards of both companies have approved the transaction, so if the necessary regulatory and shareholder approvals are obtained and other customary closing conditions are met, AbbVie expects to complete the Cerevel acquisition in mid-2024.

Signing the Cerevel agreement was AbbVie’s second big-dollar deal in two weeks. On Nov. 30, the company agreed to acquire Waltham, Mass.-based ImmunoGen for more than $10 billion. That transaction, if completed, will add an already approved, first-in-class antibody-drug conjugate (ADC) — ovarian cancer treatment Elahere (mirvetuximab soravtansine-gynx) — and several investigational ADCs to AbbVie’s portfolio.

In the transaction with Carmot, Roche is looking to buy its way into the booming market for GLP-1 agonists as obesity treatments.

Two such drugs are already approved for chronic weight management — Novo Nordisk’s Wegovy (semaglutide), approved in June 2021, and Eli Lilly’s Zepbound (tirzepatide), approved last month. Both drugmakers are ramping up their manufacturing capabilities to address current and foreseeable shortages.

“By 2035 it is estimated that nearly half of the world’s population will be overweight or obese,” said Tim Kutzkey, who chairs Carmot’s board of directors.

Carmot has three investigational GLP-1 candidates in its pipeline: a weekly injectable dual GLP-1/GIP receptor agonist for treating obesity in patients with and without type 2 diabetes; a once-daily, oral small molecule GLP-1 receptor agonist for patients with obesity and type 2 diabetes; and a once-daily, subcutaneous injectable, dual GLP-1/GIP receptor agonist for treating obesity or overweight in patients with type 1 diabetes.

Roche expects to close the Carmot acquisition in the first quarter of 2024 if customary closing conditions are satisfied.  

Our Take: AbbVie’s Gonzalez said on a call with investors last week that he is not concerned about pushback from the Federal Trade Commission with regard to the Cerevel transaction, even though AbbVie already markets a drug called Vraylar (caripraszine) for schizophrenia.

The bulk of Vraylar’s sales are for bipolar disorder and only a small share are for schizophrenia, according to Gonzalez, who noted that AbbVie carefully examined the FTC risk before signing the Cerevel agreement.

“I can tell you, this acquisition is not anticompetitive,” he said.

According to Biopharma Dive, Cerevel “was built around a portfolio of psychiatric medicines spun out of Pfizer five years ago.” The company went public in 2020.

Ron Renaud came on board as CEO of Cerevel in June. Renaud was CEO of Translate Bio from 2014 until Sanofi bought the company for $3.2 billion in 2021. He also served as CEO of Idenix Pharmaceuticals from 2010 until it was sold to Merck for $3.85 billion in 2014. It will be interesting to see where he lands next.

Roche’s Carmot announcement didn’t come as a surprise, and the $2.7 billion price tag could turn out to be a bargain even though Novo Nordisk and Lilly have a considerable head start in the weight management market.

Reuters wrote in its coverage of the deal that some analysts estimate the global weight-loss market could reach $100 billion. If Carmot’s lead candidate, CT-388, becomes best in class, as Roche has suggested it might, future sales of the drug would eclipse the purchase price.

Carmot’s technology platform permits the development of drugs with biased signaling, which can improve tolerability and efficacy. Carmot says biased signaling of CT-388 could result in greater weight loss and better glycemic control.

Roche’s chief medical officer, Dr. Levi Garraway, said the clinical data available so far for CT-388 “suggest the potential for a differentiated profile to treat diabetes and its associated diseases.”

Carmot’s portfolio offers opportunities to develop combination therapies for obesity and possibly other indications, according to Dr. Garraway. Roche has an anti-myostatin antibody in development to strengthen the muscles in patients who have spinal muscular atrophy, and if that therapy can be paired with any of Carmot’s GLP-1 agonists, the combination treatment could address the loss of muscle mass seen in some people who take Wegovy or Zepbound.

Roche’s chief medical officer, Dr. Levi Garraway, said the clinical data available so far for CT-388 “suggest the potential for a differentiated profile to treat diabetes and its associated diseases.”

Carmot’s portfolio offers opportunities to develop combination therapies for obesity and possibly other indications, according to Dr. Garraway. Roche has an anti-myostatin antibody in development to strengthen the muscles in patients who have spinal muscular atrophy, and if that therapy can be paired with any of Carmot’s GLP-1 agonists, the combination treatment could address the loss of muscle mass seen in some people who take Wegovy or Zepbound.

What else you need to know
Vertex Pharmaceuticals and CRISPR Therapeutics scored the first-ever approval of a CRISPR-based gene-editing therapy in the U.S. on Friday. As anticipated, the FDA gave the green light to Casgevy (exagamglogene autotemcel, or exa-cel) as the treatment for patients with sickle cell disease who are at least 12 years old and have recurrent pain crises. Regulators in the U.K. were the first to approve Casgevy, granting it a conditional marketing authorization less than a month ago. Administering Casgevy requires specialized experience in stem cell transplantation, Vertex noted in a news release, and the company is establishing a network of independently operated, authorized treatment centers (ATCs). Nine hospitals have been named as ATCs so far, with more to follow, Vertex said. According to an SEC filing, Vertex has set a list price of $2.2 million for Casgevy in the U.S. For more on Casgevy, see our in-depth coverage of the treatment’s initial approval in Great Britain.

The FDA also ‍ another cell-based gene therapy on Friday for a similar population of patients with sickle cell disease. That treatment, bluebird bio’s Lyfgenia (lovotibeglogene autotemcel, or lovo-cel), is a lentiviral vector gene addition therapy, not a CRISPR-based therapy like Casgevy. Bluebird bio has set Lyfgenia’s wholesale acquisition cost at $3.1 million.

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CVS Pharmacy will launch a pharmacy reimbursement model called CVS CostVantage that is similar to Mark Cuban Cost Plus Drugs’ pricing strategy. Under the model, CVS’ pharmacies will be reimbursed by contracted pharmacy benefit managers and payers based on a formula that starts with the cost of the drug and adds a fixed markup, along with a fee “that reflects the care and value of pharmacy services,” the company said in a press release. The model will launch on Jan. 1, 2025, for commercial payers. Fierce Healthcare reported that the model will also be extended to certain third-party cash discount card administrators in the second quarter of 2024, according to Prem Shah, CVS Health’s chief pharmacy officer.

In addition, CVS Caremark will launch a new PBM product in 2025 called TrueCost, which the company said will offer pricing that reflects the true net cost of prescription drugs, “with visibility into administrative fees.” The new drug pricing tools were unveiled during CVS Health’s Investor Day last Tuesday, along with the news that CVS is rebranding its health services segment as CVS Healthspire to “create an integrated ecosystem for patients.” The segment includes Caremark, Cordavis, Oak Street Health, Signify Health, and MinuteClinic. CVS said it would begin rolling out the new brand this month.

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