GSK to acquire Aiolos Bio for $1.4bn

BY Richard Summerfield

In a deal that will bolster its respiratory biologics portfolio, British pharmaceutical firm GSK has agreed to acquire the asthma drug specialist Aiolos Bio in a deal worth up to $1.4bn.

Under the terms of the deal, GSK will pay $1bn upfront to acquire Anglo-American biopharma firm Aiolos, and up to $400m in certain success-based regulatory milestone payments, as well as tiered royalties owed to Jiangsu Hengrui Pharmaceuticals Co., Ltd., which exclusively licensed Aiolos’ AIO-001, a potentially best-in-class, long-acting antithymic stromal lymphopoietin (TSLP) monoclonal antibody which is ready to enter phase 2 clinical development for the treatment of adult patients with asthma, with potential for additional indications including chronic rhinosinusitis with nasal polyps.

The companies did not reveal when the deal is expected to close, though it is contingent on customary conditions, including applicable regulatory agency clearances under the Hart-Scott-Rodino Act in the US.

In addition to reaching a bigger population of asthma patients, GSK said AIO-001 has the potential to “redefine” the standard-of-care as it can be administered every six months. Respiratory medicines and vaccines generated around $14bn in sales for GSK in 2022.

“We have a proud heritage and deep development expertise in respiratory medicines, especially addressing diseases driven by IL-5 with high levels of eosinophils or high T2 inflammation,” said Tony Wood, chief scientific officer at GSK. “Adding AIO-001, a potentially best-in-class medicine targeting the TSLP pathway, could expand the reach of our current respiratory biologics portfolio, including to the 40 percent of severe asthma patients with low T2 inflammation where treatment options are still needed.”

“We believe that this transaction speaks to the high potential of our long-acting anti-TSLP monoclonal antibody, AIO-001,” said Khurem Farooq, chief executive of Aiolos Bio. “By uniting with GSK, a leader with decades of experience developing respiratory therapies and a shared commitment to improving patient lives, we’re confident that we can rapidly advance this therapy in the hopes of significantly reducing the treatment burden for patients.”

Aiolos was founded in 2023 and only went public in October, launching with a $245m series A round co-led by Atlas Venture, Bain Capital Life Sciences, Forbion and Sofinnova Investments.

News: GSK boosts respiratory portfolio with $1.4 bln Aiolos Bio deal

APA acquires rival Callon in $4.5bn deal

BY Fraser Tennant

In the latest in a wave of deals reshaping the US oil landscape, oil and natural gas company APA Corporation is to acquire its rival Callon Petroleum Company in an all-stock transaction valued at approximately $4.5bn.  

Under the terms of the definitive agreement, each outstanding share of Callon common stock will be exchanged for 1.0425 shares of APA common stock, representing an implied value to each Callon share of $38.31 per share based on the closing price of APA common stock on 3 January 2024.

The transaction has been unanimously approved by the boards of directors of both APA and Callon.

“This deal is aligned with APA’s overall portfolio strategy and fits all the criteria of our disciplined approach to evaluating external growth opportunities,” said John J. Christmann IV, chief executive and president of APA. “It is also accretive and unlocks value for both shareholder bases, as increased scale will enable us to realise significant overhead and cost-of-capital synergies.”

Callon’s assets provide additional scale to APA’s operations across the Permian Basin, most notably in the Delaware Basin, where Callon has nearly 120,000 acres. On a pro forma basis, total company production exceeds 500,000 barrels of oil per day and enterprise value increases to more than $21bn.

“We are very proud of the significant steps we have taken to enhance Callon’s asset base, operational performance and balance sheet over the past several years,” said Joe Gatto, president and chief executive of Callon. “This combination with APA now provides for an enhanced value proposition for our shareholders built on their depth of experience and strong execution in the Permian Basin, flexibility for increased capital allocation, and ongoing delineation and optimisation efforts.”

The transaction is expected to close during the second quarter of 2024, subject to customary closing conditions, termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and approval of the transaction by shareholders of both APA and Callon.

Upon closing, a representative from Callon will join the APA board. APA’s executive management team will lead the combined company with headquarters remaining in Houston, Texas.

Mr Christmann concluded: “This transaction is aligned with our strategy of maintaining and growing a diversified portfolio, underpinned by large-scale core areas of operation while continuing to build a portfolio of medium and longer-term exploration-driven development opportunities.”

News: APA to acquire rival Callon Petroleum in $4.5 billion deal

Bristol Myers Squibb acquires RayzeBio in $4.1bn deal

BY Fraser Tennant

In its second multibillion-dollar deal in weeks, US multinational pharmaceutical company Bristol Myers Squibb is to acquire radiological drug developer RayzeBio, Inc. for approximately $4.1bn.

Under the terms of the definitive agreement, Bristol Myers Squibb will acquire RayzeBio for $62.50 per share in cash, representing a premium of 104 percent to the stock’s last close.

A clinical-stage radiopharmaceutical therapeutics (RPTs) company, RayzeBio has an innovation-leading position in actinium-based RPTs and a pipeline of potentially first-in-class and best-in-class drug development programmes.

“Despite therapeutic advances in recent years, the need for more effective treatments in solid tumours persists, and radiopharmaceutical therapeutics are positioned to be an important next wave of innovation in oncology therapy,” said Ken Song, president and chief executive of RayzeBio. Bristol Myers Squibb’s well-established presence in oncology and deep expertise in developing, commercializing and manufacturing treatments on a global scale makes it the ideal partner for RayzeBio at this important moment in our evolution.”

The transaction has been unanimously approved by both the Bristol Myers Squibb and RayzeBio boards of directors.

“This transaction enhances our increasingly diversified oncology portfolio by bringing a differentiated platform and pipeline, and further strengthens our growth opportunities in the back half of the decade and beyond,” said Christopher Boerner, chief executive of Bristol Myers Squibb. “Radiopharmaceutical therapeutics are already transforming cancer care, and RayzeBio is at the forefront of pioneering the application of this novel modality.”

Bristol Myers Squibb’s previous acquisition saw it buy Karuna Therapeutics Inc. in a $14bn transaction designed to boost its neuroscience portfolio.

The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including the tender of a majority of the outstanding shares of RayzeBio’s common stock and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Mr Boerner concluded: “We look forward to supporting and accelerating RayzeBio’s preclinical and clinical programmes and advancing its highly innovative radiopharmaceutical platform.”

News: Bristol Myers to buy RayzeBio for $4.1 billion in targeted cancer therapy push

Nippon Steel Corporation acquires US Steel in $14.1bn deal

BY Fraser Tennant

In a deal that creates the world’s second-biggest steel producer, Japan’s largest steelmaker Nippon Steel Corporation (NSC) is to acquire United States Steel Corporation for approximately $14.1bn.

Under the terms of the definitive agreement, NSC will acquire US Steel for $55 per share in an all-cash transaction representing 40 percent premium, providing certain and immediate value to US Steel shareholders.

The transaction will further diversify NSC’s global footprint by significantly expanding its current production in the US, adding to its primary geographies of Japan, Association of Southeast Asian Nations (ASEAN) and India.

As a result of the acquisition, it is expected that NSC’s total annual crude steel capacity will reach 86 million tonnes – accelerating progress toward its strategic goal of 100 million tonnes of global crude steel capacity annually.

“This transaction brings together two companies with world-leading technologies and manufacturing capabilities,” said Eiji Hashimoto, president of NSC. “It also demonstrates our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonisation of steel.”

The transaction has been unanimously approved by the board of directors of both NSC and US Steel.

“NSC has a proven track record of acquiring, operating and investing in steel mill facilities globally,” said David B. Burritt, president and chief executive of US Steel. “The transaction also benefits the US – ensuring a competitive, domestic steel industry, while strengthening our presence globally.”

The transaction is expected to close in the second or third quarter of 2024, subject to approval by US Steel’s shareholders, receipt of customary regulatory approvals and other customary closing conditions.

Mr Hashimoto concluded: “NSC has long admired US Steel with deep respect for its advanced technologies, rich history and talented workforce and we believe we can jointly take on the challenge of raising our aspirations to even greater heights.”

News: Japan's Nippon Steel to acquire U.S. Steel for $14.9 billion

Steady start for M&A in Q1 2024, forecasts new report

BY Fraser Tennant

Global M&A in Q1 2024 will see an uptick in activity with acquisitions in the technology, media and telecommunications (TMT), consumer, healthcare and energy sectors set to rise, according to a new report by Datasite.

In the ‘Datasite Forecaster Special Report: The Year of the Buy-Side’, the virtual data room provider suggests that while tighter financing costs, a volatile market and the long-term impact of the coronavirus (COVID-19) pandemic have curbed M&A deal activity in 2023, there will be opportunities in 2024.

According to the report: (i) buyers are taking advantage of softening market conditions and lowered seller expectations to pursue one-on-one acquisitions with vigour; (ii) with sell-side M&A finally cooling in the real estate and industrials industries, acquirers are scouring the landscape for pickups; and (iii) more advisers are being hired for one-on-one acquisitions as buyers decide to take no chances during this rare window of opportunity.

“Fewer sell-side auction processes in top industries this year have opened the door to more one on one deals,” said Merlin Piscitelli, chief revenue officer for Europe, Middle East and Africa (EMEA) at Datasite. “Buyers are taking full advantage, scouring the real estate, industrials, TMT, and consumer industries for pickups.

“The exception to this is energy & power, which is seeing a resurgence on both sides of the M&A equation,” he continued. “Meanwhile, life science and healthcare M&A continues to slowly recover from its COVID-19 induced feeding frenzy.”

The report also suggests that artificial intelligence (AI)-powered technologies will continue to impact not only the kinds of deals being done but also how deals are managed.

“From its ability to streamline several aspects of dealmaking, including powering data analysis and automating repetitive tasks, the momentum behind AI is set to grow,” added Mr Piscitelli. “In fact, in a recent Datasite survey, 42 percent of global dealmakers said productivity was the biggest benefit of using generative AI in their business and most expect that AI will help speed up deals by 50 percent.”

Another sign, according to Datasite, of a steady start to M&A activity in Q1 2024 is the willingness of acquirers to bring in financial advisers – buy-side deals being one-on-one acquisitions in which advisers have traditionally played a smaller role.

Mr Piscitelli concluded: “For years, strategic buyers have struggled to acquire in a market rife with private equity competition and inflated valuations. Without knowing how long their window of opportunity will last, buyers are leaving nothing on the table.”

Report: Datasite Forecaster Special Report: The Year of the Buy-Side