CAR-T specialist Legend Biotech has reportedly received a takeover bid and has tapped Centerview Partners as a financial adviser to evaluate its options, StreetInsider reports, citing an unnamed source.
Following the news, Legend Biotech’s stock price jumped about 12% on the Nasdaq exchange Friday afternoon. The share price of Legend’s former parent and largest shareholder, GenScript, soared about 25% Monday in Hong Kong. As of the end of 2023, GenScript owned 48% of Legend.
In a filing Monday, GenScript said it’s not aware of any reason for the dramatic stock movement. The company didn’t have any inside information to disclose under Hong Kong securities laws.
Legend, for its part, declined to comment on market rumors.
Legend rose to fame through a 2017 collaboration with Johnson & Johnson on the BCMA CAR-T therapy Carvykti. The cell therapy’s remarkable efficacy in multiple myeloma has prompted J&J to peg its peak sales potential at above $5 billion.
The structuring of the 2017 deal suggested that Legend wanted to become a biopharma company in its own right. Rather than handing all responsibilities to J&J, Legend is jointly developing and commercializing Carvykti, and the two firms are sharing costs and profits 50-50 outside China.
Given the two companies’ existing relationship, it’s possible J&J may be interested in acquiring its partner. The New Jersey pharma didn’t immediately respond to a Fierce Pharma request for comment.
Examples of Big Pharma companies buying partners in recent years are readily available. Sanofi last year paid $2.9 billion to acquire diabetes partner Provention Bio. Pfizer in 2022 shelled out $11.6 billion to scoop up Biohaven Pharma’s CGRP inhibitor portfolio just months after forming a collaboration on the latter’s migraine drug.
Meanwhile, the report comes amid a biosecurity crackdown on Chinese biopharma service providers under the draft BIOSEUCRE Act. In May, two House lawmakers requested an intelligence briefing with the U.S. government on GenScript and three of its related business branches, including Legend.
At this point, there’s no sign that either GenScript or Legend will be added to the BIOSECURE Act’s list of target companies, which could be barred from contracting with the U.S. government and effectively pushed out of the U.S. market. But it’d be logical if J&J wanted to mitigate the risk by removing the Chinese tie and taking Legend’s operations into its own hands.
Besides J&J, a deal with Novartis could make sense for Legend, too. Novartis in November agreed to pay Legend $100 million up front for a selection of DLL3-directed CAR-T candidates, with a plan to apply its T-Charge technology on the programs. In addition, Novartis already has a deal to help Legend and J&J manufacture Carvykti after its own CD19 CAR-T drug, Kymriah, lost steam following a key pivotal trial flop in lymphoma.
Novartis has said its M&A focus is currently on deals worth around or below $5 billion. But the company did in 2020 acquire The Medicines Company for $9.7 billion. After Friday’s price surge, Legend’s market cap is nearing $10 billion.
Elsewhere, AstraZeneca recently bought out another Chinese CAR-T player, Gracell Biotechnologies, for up to $1.2 billion. Given that the centerpiece of the deal, GC012F, is a BCMA and CD19 dual-targeting CAR-T and a direct competitor to Carvykti, it’d be unlikely for AZ to take an interest in Legend. Centerview advised Gracell on the AZ transaction, as well as Kite Pharma on its 2017 takeover by Gilead Sciences.
Editor's Note: The story has been updated to clarify GenScript's relationship with Legend Biotech.