Johnson & Johnson, already a big player in neuroscience drugs, is adding to its portfolio and pipeline with a deal to acquire Intra-Cellular Therapies, a company whose main asset has the potential to become a blockbuster seller across several neurological indications.
According to deal terms announced Monday, J&J has agreed to pay $132 in cash for each share of Intra-Cellular, a more than 39% premium to the company’s closing stock price on Friday. Shares of Bedminster, New Jersey-based Intra-Cellular had already risen after reports surfaced late last week about a potential acquisition. The deal values Intra-Cellular at $14.6 billion.
The centerpiece of the Intra-Cellular acquisition is Caplyta, a drug that won its initial FDA approval in 2019 as a treatment for schizophrenia in adults. Two years later, its label expanded to include bipolar depression. Caplyta is a small molecule formulated as a capsule taken once daily. The way this drug works to treat neurological conditions is unknown, but its therapeutic effect is thought to come from blocking activity of certain receptors found in the brain.
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Caplyta, Intra-Cellular’s only FDA-approved drug, accounted for $481.2 million in sales in the first nine months of 2024. Last April, Intra-Cellular reported positive Phase 3 data in major depressive disorder (MDD). In December, the company submitted to the FDA an application in this indication.
[Update: The following two paragraphs added with additional J&J commentary.] Speaking during a Monday presentation at the annual J.P. Morgan Healthcare conference in San Francisco, J&J Chairman and CEO Joaquin Duato reiterated that neuroscience is one of the company’s core therapeutic areas. He added that Intra-Cellular’s Caplyta fits the “sweet spot” of being able to identify an asset that makes a difference in an area of high unmet medical need where J&J already has existing capabilities. Furthermore, Caplyta will help boost sales growth.
“We believe, as I said before, that Caplyta is going to be a more than $5 billion asset, and also that this acquisition will help us having sales above analyst expectations, today and in the rest of the decade.”
Approval of Caplyta in major depressive disorder could push the drug into blockbuster territory. Leerink Partners also expects the drug could achieve greater than $5 billion in peak sales. Leerink analyst David Risinger said in a Monday research note that Intra-Cellular fits well with J&J’s existing neuroscience portfolio. The pharma giant’s top neuro product is paliperidone, marketed as Invega among other names for treating schizophrenia. This drug accounted for more than $3.1 billion in revenue through the first three quarters of 2024. J&J also markets the depression drug Spravato.
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The Intra-Cellular pipeline includes ITCI-1284, which is in mid-stage development for generalized anxiety disorder, Alzheimer’s disease agitation, and psychosis in patients with Alzheimer’s. The company has said the drug could achieve more than $1 billion in peak sales combined in these three indications.
J&J and Intra-Cellular expect the acquisition will close later this year, subject to regulatory approvals. The pharma giant said it will provide additional commentary on the financial impact of the transaction during its Jan. 22 conference call to discuss fourth quarter 2024 financial results.
GSK to Pay $1B for IDRx and Its Lead Drug for Gastrointestinal Cancer
GSK is adding to its cancer drug prospects with a $1 billion deal to acquire IDRx, a clinical-stage biotech whose most advanced program is in development for a type of gastrointestinal cancer driven by a particular genetic signature.
The sum announced Monday is an upfront payment. GSK could end up paying the shareholders of the privately held biotech an additional $150 million for milestone of a regulatory approval.
IDRx’s lead drug candidate, IDRX-42, is a potential treatment for gastrointestinal stromal tumor (GIST). The drug is a tyrosine kinase inhibitor, a type of drug designed to block mutated enzymes that drive cancer growth. According to GSK and Plymouth, Massachusetts-based IDRx, 80% of cases of GIST in the gastrointestinal tract are driven by mutations to the KIT gene. While tyrosine kinase inhibitors are available as cancer treatments, the companies say there are no currently approved drugs in this class that block the full spectrum of KIT mutations.
IDRX-42 is currently being evaluated in a Phase 1/2 clinical trial. IDRx has said results so far show the drug demonstrated activity against all key primary and secondary KIT mutations. Furthermore, the selectivity of the IDRX-42 to it its target could improve its tolerability, which the companies contend offers the potential for a best-in-class profile. Updated Phase 1 data were presented at the 2024 annual meeting of the Connective Tissue Oncology Society this past November.
“IDRX-42 complements our growing portfolio in gastrointestinal cancers,” GSK Chief Commercial Officer Luke Miels said in a prepared statement. “This acquisition is consistent with our approach of acquiring assets that address validated targets and where there is clear unmet medical need, despite existing approved products.”
IDRx, founded by serial entrepreneur Alexis Borisy, emerged from stealth in 2022 backed by a $122 million Series A round of funding. The biotech closed a $120 million Series B round last August. IDRx licensed its lead drug candidate from Merck KGaA. If it’s approved, GSK will be responsible for milestone payments and royalties paid out to the German company.
Eli Lilly Picks Up Scorpion Drug to Replace a Program Terminated Last Year
Eli Lilly is acquiring Scorpion Therapeutics to get a drug with the potential to treat breast cancer and other advanced solid tumors characterized by a certain genetic signature.
The Scorpion drug, STX-478, is a small molecule designed to selectively block PI3K alpha. Overactivation of this enzyme can help cancer grow and spread. While there are drugs available that address the PI3K alpha pathway, these medicines can also hit healthy tissue, sparking adverse effects. Scorpion designed its drug to selectively target the pathway in cancerous cells while leaving it alone in healthy cells. Acquiring the Scorpion drug gives Lilly a replacement for a PI3K alpha program it terminated last summer.
While the deal announced Monday calls for Lilly to acquire Scorpion, the pharma giant only wants STX-478. No upfront payment was disclosed; total payments, including milestone payments, could reach up to $2.5 billion. Meanwhile, Scorpion’s non PI3K alpha pipeline will spin out as a new, independent company. Current Scorpion owners will own the company while Lilly will have a minority stake. New Scorpion will be led by the current Scorpion management team.
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