Biogen’s HI-Bio Buy Is Latest Biopharma Spending Spree in Projected $257B Immunology Market

2024-06-12

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Pictured: Biogen's signage at its headquarters in Massachusetts/iStock, JHVEPhoto With the global immunology market projected to grow from nearly $103.2 billion in 2024 to $257.4 billion by 2032, second only to oncology in terms of the largest therapy area by value, it’s not surprising that immunology has attracted major investment recently from biopharma companies. Add the fact that drugmakers are facing losses from looming patent expirations and immunology drugs have a relatively high chance of success in clinical trials, it’s clear to see why the market is so attractive. In April, Vertex acquired Alpine Immune Sciences for $4.9 billion, the largest acquisition so far in 2024, giving it access to potential treatments for autoimmune and inflammatory diseases. That same month, Bristol Myers Squibb announced a potential $1.8 billion, multi-year collaboration with Repertoire Immune Medicines to create up to three vaccines for autoimmune diseases. Biogen is the latest big player to join the fray with its acquisition of privately held Human Immunology Biosciences, also known as HI-Bio. Last month, Biogen announced it would acquire the company, which is focused on severe immune-mediated diseases, paying $1.15 billion upfront and with the potential for $650 million in milestone payments. Analysts see the deal as part of CEO Chris Viehbacher’s plan to move the company away from riskier plays in the neurological space and expand Biogen’s immunology and rare diseases pipeline. Specifically, Biogen is looking to expand its pipeline beyond its current crop of drugs, such as the Friedreich’s ataxia drug Skyclarys and the Alzheimer’s disease treatment Leqembi, Myles Minter, a research analyst at William Blair, told BioSpace. The move aims to “de-risk” their pipeline and avoid clinical trials with higher bars for success, he said. “They want to create a pipeline that is more de-risked. I think you get that in immunology. They don’t want to be this company where they’re relying on a pivotal trial in stroke or [a] very, very risky study in relapsing MS.” The buy gives Biogen access to drug candidate felzartamab, an anti-CD38 antibody being developed by HI-Bio for several chronic kidney conditions with large unmet medical needs, including IgA nephropathy, primary membranous nephropathy and antibody-mediated rejection in kidney transplant recipients. In a note to investors last month on Biogen’s HI-Bio deal, Bank of Montreal Capital Markets analysts made the case that felzartamab’s mechanism of selectively depleting CD38+ cells could give Biogen “applicability across a range of immune-mediated diseases.” Indeed, immunology and inflammation (I&I) is a particularly attractive market because of its “pipeline-in-a-product” potential of expanding into “adjacent indications and build a monster brand,” biotech entrepreneur Andrew Pannu told BioSpace in February. Other Moves in the I&I Space For other large biopharma companies, the role model in the immunology space is AbbVie’s blockbuster Humira, one of the highest grossing drugs of all time. Used to treat Crohn’s disease, plaque psoriasis and rheumatoid arthritis, among other inflammatory conditions, it brought in about $200 billion over the last two decades. Minter sees the I&I market, which attracts relatively high valuations, as an appropriate sector to target as part of Biogen’s and other companies’ de-risking strategies as they look to hedge their bets on more uncertain pipelines. While Biogen has been focused on its Alzheimer’s medicines, it has not been an easy path. Aduhelm faced intense scrutiny over its efficacy and pricing, making it perhaps one of the most controversial FDA approvals. Ultimately, Biogen in January discontinued Aduhelm and halted a post-approval study, deciding to focus its efforts instead on Leqembi with partner Eisai. The loss of patent protections is another factor fueling Biogen’s pipeline realignment. Minter contends that Biogen is being “forced” into de-risking its business strategy as the oral therapy for relapsing-remitting multiple sclerosis Tecfidera, a multibillion-dollar earner, is teetering on the patent cliff. Tecfidera’s patent will expire in the E.U. in 2025 and efforts to restore patent protections in the U.S. have been defeated. At the same time, Biogen’s combined expertise in immunology and rare diseases with products such as Skyclarys and the spinal muscular atrophy drug Spinraza, are a big leg up for the company as it targets the I&I market, according to Minter. New product launches, such as Skyclarys and Leqembi, are part of Biogen’s plan to bring revenue back up as well as investments in expanding markets. Startups are also looking to challenge the big players in the I&I space. Inflammatory disease-focused Mirador Therapeutics landed the largest early-stage venture capital investment in biopharma last quarter, launching with $400 million in financing. Alumis recently raised $259 million in a Series C round, while AltruBio and Attovia secured $225 million and $105 million in Series Bs, respectively. Alumis, a potential rival to Bristol Myers Squibb and Takeda in autoimmune diseases, in an SEC filing last week for an initial public offering said it plans to start Phase III trials of a TYK2 inhibitor TYK2 inhibitor in plaque psoriasis. Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.