The number doing the rounds this morning is $400bn, roughly what Bristol Myers and AstraZeneca are worth combined. The two are reported to be in merger discussions, first reported by the Financial Times, and a tie-up that size would be the largest pharmaceutical merger ever and the first large-scale combination in the sector since Bristol/Celgene and AbbVie/Allergan in 2019. It would far outpace Pfizer/Warner Lambert, Pfizer/Wyeth, Sanofi/Aventis or Merck/Schering Plough.
The report is unconfirmed and there is a great deal still to learn, so we will hold our read until our reporters have worked the phones.
The signed deals are another matter, so let us stay on dealmaking and look at the week just gone.
Argenx Buys Itself A Second Act
Argenx wrote its biggest check yet last week - $2.2bn in cash for Forte Biosciences. The purchase, its largest acquisition to date, brings in FB102, an anti-CD122 antibody that has shown early proof of concept in vitiligo and celiac disease and is being explored in other autoimmune conditions. Argenx is paying $77 a share, about an 86% premium to Forte's average price since the vitiligo data landed on July 9, with the deal expected to close in the third quarter. It already knew the asset well, having invested in Forte's $150m offering in April as a strategic investor.
The logic is a company protecting its one big source of cash. Vyvgart, argenx's FcRn inhibitor approved for generalized myasthenia gravis and CIDP, is its only FDA-approved growth driver, and Bernstein analysts framed the deal as a way to diversify well before the product's 2036 patent expiry starts to weigh on the story. Vyvgart and Vyvgart Hytrulo brought in $1.5bn in the second quarter, 60% growth year on year, with the franchise on track to pass $6bn this year, and argenx closed the quarter with $3.6bn in cash. CEO Karen Massey put the shift plainly on the earnings call: "With the strength of our balance sheet and our continued profitability, we can now widen the lens and also look at biotech companies."