Biotech Acquisitions on the Rise in 2017: Latest Reports on Calithera Biosciences and Evoke Pharma

NEW YORK, NY / ACCESSWIRE / January 31,
2017 / Biotech acquisitions deals are expected to see a substantial jump in 2017 as large pharmaceutical companies look to boost slowing revenues. In January we have seen a number of deals announced: Takeda Pharmaceutical’s acquisition of Ariad Pharmaceuticals, Eli Lilly’s acquisition of CoLucid Pharmaceuticals, Inc. and Valeant Pharmaceuticals decision to sell Dendreon Pharmaceuticals. Approximately 43 percent of biopharma executives have said that they had five or more potential deals in progress, which is substantially more than the 6 percent seen last April, according to a poll conducted by Ernst & Young mid-October last year.

“2017 is likely to push biopharma deal making to new heights,” commented Ernst & Young’s Andrew Forman, in a research note titled M&A Outlook and Firepower Report 2017.

“Large drug companies have been making money doing things that are artificial and unsustainable. Like price increases, inversions and financial engineering,” says Brad Loncar, a cancer-company expert at Loncar Investments. “Because those things are coming to an end and the environment for the pharma industry is becoming much more challenging, companies are having a real problem posting revenue growth,” says Loncar. “The only way they can get revenue growth is to buy it.”

Calithera Biosciences Inc. (NASDAQ: CALA)

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Calithera Biosciences’ shares soared 46.74 percent to close at $6.75 a share Monday. The stock traded between $5.85 and $7.25 on volume of 10.42 million shares traded. On Monday, January 30th, Incyte Corp. and Calithera Bioscience have announced a global collaboration and license agreement to develop and commercialize CB-1158, a first-in-class, small molecule arginase inhibitor, in hematology and oncology. Under the terms of the agreement Calithera will receive a $45 million up-front payment and an $8 million equity investment from Incyte.

“In this strategic partnership with Incyte, CB-1158 is expected to be evaluated in multiple trials of novel therapeutic combinations, accelerating its development across hematological and oncology indications,” said Susan Molineaux, Ph.D., Calithera’s Chief Executive Officer.

Evoke Pharma Inc. (NASDAQ: EVOK)

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Evoke Pharma’s shares spiked 14.92 percent to close at $2.85 a share Monday. The stock traded between $2.31 and $2.93 on volume of 1.44 million shares traded. Evoke is a specialty pharmaceutical company focused primarily on the development of drugs to treat gastrointestinal (GI) disorders and diseases. On January 4th, the company announced additional data from the Phase 3 trial of Gimoti.

“As our discussions with the FDA progressed over the past few months, we have continued to analyze data from our Phase 3 trial of Gimoti. These additional analyses have provided us with important insights regarding the efficacy of Gimoti in patients with varying levels of symptom severity, despite not reaching the trial’s primary endpoint,” stated Dave Gonyer, R.Ph., President and CEO.

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