Four Times The Premium to Acquire Checkmate, A Leading Pharmaceutical Company, Regeneron's Advanced Road

REGENERON and Checkmate today jointly announced that the two companies have signed a definitive agreement whereby Regeneron will acquire Checkmate common stock for an all-cash consideration of $10.50 per share, for a proposed total equity value of Checkmate of approximately $250 million.

While the amount isn't huge, Regeneron is still offering more than four times Checkmate's stock's closing price the day before, the largest premium on a $50 million-plus deal since 2018. At the same time, this is also the first target that Regeneron has acquired since its establishment.

Checkmate's lead drug candidate, Vidutolimod, is a CpG-A oligodeoxynucleotide toll-like receptor 9 (TLR9) agonist delivered via virus-like particles (VLPs). Vidutolimod acts through two complementary mechanisms to drive robust systemic T cell antitumor responses. It is currently being developed in combination with other drugs to treat melanoma, non-melanoma skin cancer and head and neck cancer.

The acquisition will enrich Regeneron's immuno-oncology product pipeline.

Regeneron Pharmaceuticals, established in 1988, is the benchmark company in the minds of many innovative pharmaceutical companies in China. From its inception to the present, Regeneron has completely relied on self-research, and has used long-term technology accumulation in exchange for market recognition and peers. respect. Let's take a closer look at this amazing company.

From continuous failure to 20 years of sharpening a sword

In 1988, a 34-year-old neurologist decided to quit his teaching job at Cornell University School of Medicine and chose to "go to sea". He then founded a company called Regeneron, a combination of the words Regenerate and Neuron, which means "to regenerate neurons."

The entrepreneur is Shriver, who is now well-known in the industry. At the same time, he found Jacques Poros, who has also been deeply involved in the field of neurology for many years, thus forming the core R&D team of Regeneron.

In the company's third year, the R&D team published a paper in the journal Science on how to clone a novel neurotrophic factor. The paper became the most cited neurobiology paper of the year. At the same time, it also successfully attracted the attention of Amgen, and successfully obtained the financing of 15 million US dollars from Amgen.

With Amgen's stake, Regeneron went public on Nasdaq in 1991, raising $91.6 million before any products entered clinical trials.

With the first pot of gold, the Regeneron team began to develop a drug for amyotrophic lateral sclerosis (ALS), also known as "ALS." Unexpectedly, after 3 years of research and development, Regeneron failed.

In 1994, Regeneron's two projects, ciliary neurotrophic factor and brain-derived nerve growth factor, failed to pass clinical trials: one was unsafe, and the toxic side effects led to the death of patients; the other was ineffective.

After three consecutive setbacks, Regeneron fell into the biggest business crisis since its establishment, and at one time it could only rely on layoffs to stop losses.

But the two founders did not give up, and they finally persuaded former Merck CEO Vagelos to join. Vagelos has been in power of Merck for 10 years, from the head of R&D to CEO, and increased Merck's annual sales from 4.5 billion to 10.5 billion US dollars, and established its global dominance of pharmaceutical companies.

Vagelos reorganized the R&D landscape of Regeneron. He believes that Regeneron's research on human cells is very advantageous, and the pipeline should not be limited to the field of neurological diseases. Under this guidance, Regeneron came up with the rare disease drug Arcalyst in 2008. This is the first product officially launched by the company 20 years after its establishment, and it is a drug for the treatment of recurrent pericarditis. Compared with the average of other innovative drug companies of the same era, it took Regeneron nearly 20 years to get its first product on the market.

Platform + making medicine and walking on two legs

In terms of research and development, Regeneron has always had two characteristics: only doing self-research, and developing a platform. Two of the "source-based" technology platforms are the most familiar to the outside world.

One is: Traps technology platform. The technology fused the receptor component with the constant region of the antibody molecule to make a class of drugs named "trap" by Regeneron at that time, which is actually the "fusion protein" we know today.

Back in 2002, Regeneron leased a 75,000-square-foot laboratory near its Rensselaer plant in New York to industrialize Traps technology. Regeneron's Arcalyst (Lelocept) and Eylea (Aflibercept) are products developed using this platform.

Due to the limited therapeutic areas of the earliest indications developed by Arcalyst, sales were not ideal, only US$11 million in 2008, and Regeneron did not shine with the launch of the product. But three years later, the launch of the ophthalmic drug apaccept changed that.

Apaccept is a collaboration between Regeneron and Bayer to treat wet macular degeneration (wAMD). The two sides reached an agreement: Regeneron is responsible for the US market, while the market outside the US will be handed over to Bayer, and the sales profits of this part will be shared equally by the two companies.

In 2011, Apaccept was successfully launched. And it only took one year to occupy a 22% market share in the field of macular degeneration treatment in the United States, with sales of $840 million in the first year of listing, and became a blockbuster drug in the second year, and it is still the revenue of Regeneron. main source. Global revenue in 2021 is $9.385 billion, of which the U.S. market revenue is $5.8 billion.

The second is: VelociSuite technology platform. The platform includes general technologies required for the entire process of drug research, such as target identification, animal models, antibody preparation, therapeutic antibody identification, T cell receptors, etc., which is the full-process platform for antibody drug development that we are familiar with today. Since then, Regeneron has successively launched related platform technologies such as VelocImmune, VelociMouse, VelociMab, and Veloci-Bi. Regeneron integrates them into a suite called "VelociSuite" and continues to optimize them.

Based on a powerful technology platform, Regeneron has cooperated with a number of pharmaceutical giants to jointly develop a number of blockbuster drugs.

For example, Regeneron has long-term cooperation with Sanofi, and has contributed five approved products to it. Among them, Dupixent (duplimumab) jointly developed by the two will have an annual revenue of US$6.2 billion in 2021. It is the first biological agent in the United States that is used across dermatology, allergy, and respiratory departments.

In addition, there are the familiar PD-1 monoclonal antibody Libtayo (cemiplimab), PCSK9 monoclonal antibody Praluent (alirocumab) and so on.

In terms of new crown treatment, Regeneron's new crown virus cocktail neutralizing antibody REGEN-COV's revenue in 2021 will be 7.574 billion US dollars, exceeding Remdesivir's 5.56 billion US dollars, and far higher than Eli Lilly's neutralizing antibody of 2.239 billion US dollars.

In October 2020, former US President Trump was unfortunately infected with the new crown virus, and was finally cured by using Regeneron's new crown neutralizing antibody cocktail therapy and other drugs. Trump praised Regeneron by name and pushed for an emergency use authorization (EUA) from the FDA for its therapy.

However, given the lack of efficacy of REGEN-COV against Omicron variants, Regeneron is currently working on developing next-generation drug candidates to address Omicron (B.1.1.529) mutants.

In terms of platform exploration, Regeneron has also established a genetics research center and cooperated with many biotech companies in the fields of gene therapy, RNAi therapy, gene editing, CAR-T and other fields.

Regeneron, as a R&D pharmaceutical company with a history of 34 years, has continuously grown itself in cooperation with other large multinational pharmaceutical companies by virtue of its strong R&D strength and technology platform. Its revenue in 2021 will reach 16.072 billion US dollars, which has become the top of the industry. It is expected that from 2022 to 2024, Regeneron will submit regulatory applications for multiple new drugs and new indications. At present, Regeneron has also begun to break its own tradition of boring research and development, and began to acquire potential drug pipelines. However, no matter whether it is self-developed cooperation or acquisition, Regeneron has never strayed from the track of technology, R&D and exploration. Compared with many "hundred-year-old stores", Regeneron is a rising star. With the support of new crown drugs in the near future and the promotion of independent research and development in the medium and long term, it is believed that Regeneron's performance will reach a new high.