Pfizer set to swallow Canadian cancer drug developer Trillium Therapeutics in US$2.26-billion deal - The Globe and Mail

Pharma giant Pfizer Inc. said Monday it would buy Trillium Therapeutics Inc. in a deal valuing the Mississauga blood cancer drug developer at US$2.26-billion.

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The Toronto Stock Exchange is set to lose its most valuable Canadian biotechnology company for the second time this year after pharma giant Pfizer Inc. said Monday it would buy Trillium Therapeutics Inc. in a deal valuing the Mississauga blood cancer drug developer at US$2.26-billion.

Pfizer said it will pay US$18.50 a share – more than triple Trillium’s US$6.09 closing price on Friday – for all shares of Trillium that it does not already own. Pfizer invested US$25-million last year in Trillium, picking up 2.3-million shares for US$10.88 apiece. It’s the second largest deal for a Canadian biotech company on record, after Shire Pharmaceuticals Group PLC’s C$5.9-billion purchase of AIDS drug developer BioChem Pharma Inc. in 2001.

The deal follows a decision last month by lupus drug developer Aurinia Pharmaceuticals, previously the TSX’s most valuable biotechnology company, to leave the senior Canadian exchange in favor of a Nasdaq-only listing. That was the latest in an exodus of dual-listed Canadian-based early-stage life sciences companies from their domestic exchange in favor of US-only listings. Canada’s most valuable biotechnology companies, including AbCellera Biologics Inc, Zymeworks Inc. and Repare Therapeutics Inc., are all listed exclusively on US exchanges, where investor activity in the sector is most heavily concentrated.

Like many biotech stocks, particularly those based in Canada, Trillium has seen its share value slide precipitously this year; it touched a 52-week low on Friday, down nearly 60 per cent on the year. That followed a massive runup in the value of biotech stocks last year, which had muted mergers and acquisitions activity in the sector through the first half of this year, said David Martin, an analyst with Bloom Burton in Toronto. “Trillium has a drug that is potentially class leading and it was down” steeply from its value a year ago, he said. “They became a good target because of that.”

The company, originally called Neurogenic Biotech Corp. when it was founded 17 years ago, was one of a handful of Canadian-based biotechs that had surpassed valuations of US$1-billion in the past two years, fueled by growing international investor interest in Canada’s small but teeming crop of drug developers. The company went public via a reverse takeover of a shell company on the TSX in 2013 and later listed a year on the Nasdaq a year later, but its stock drifted down to under 50 cents (USD) two years ago. Its fortunes turned around sharply after the company recruited Cambridge, Mass-based industry veteran Jan Skvarka in September 2019 as CEO, bringing greater profile to its drug development candidates.

Pfizer is one of the world’s most valuable pharmaceutical companies and has become a household name in the past year due to its COVID-19 vaccine, which has also bulked up the US company’s coffers. But Pfizer is also a highly diversified developer and marketer of drugs for pain management, cardiovascular and central nervous system diseases and a range of cancers.

The Trillium deal “reinforces our commitment to pursue scientific breakthroughs with the addition of potentially best-in-class molecules to our innovative pipeline,” Andy Schmeltz, global president and general manager of Pfizer’s oncology group said in a release.

With Trillium, Pfizer is gaining access to the Canadian companies’ two leading drug candidates that are designed to block “don’t eat-me” signals sent by tumors to shield against the immune system and send an additional signal to stimulate the body to attack the cancerous growths. The Canadian company recently cut 40 per cent of its drug discovery group to focus on the two lead molecules, known as TTI-622 and TTI-621. So far, TTI-622 has been well-tolerated by human subjects in its ongoing safety trial, while TTI-622 has shown ongoing efficacy in a study of 30 patients, Pfizer said. Both drugs must successfully complete trials showing they work as intended on cancer patients before gaining regulatory approvals that allow them to be sold.

Pfizer’s chief development officer, oncology, Chris Boshoff said in a statement his company was “encouraged by the early clinical data for TTI-622 and TTI-621 monotherapy for patients with heavily pretreated lymphoid malignancies and early encourating activity for TTI-622 in patients with multiple myeloma.” He added that the way the drugs work establish a second effective form of cancer immunotherapy, following the development of a class of drugs known as PD-1 and PD-L1 blockers.

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2021-08-23 14:16:26Z
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