The lag in M&A during the COVID-19 pandemic is well-documented and widely covered. But this slowdown didn't stop Marc de Garidel from bringing two different cardiovascular companies to the negotiation table — and ultimately to deal announcements — in 2020 and 2023.
The most recent deal surfaced in January when AstraZeneca announced the acquisition of CinCor, a biotech where de Garidel is CEO. The transaction, which is expected to close in the first quarter, is worth about $1.3 billion plus another $500 million if the lead hypertension product baxdrostat makes it to a regulatory filing.
CinCor welcomed a successful phase 2 trial for baxdrostat in August 2022 in patients with treatment-resistant hypertension. Now, the late-stage effort will be taken on by AZ, which has the Big Pharma bucks and commercial know-how to bring it to the finish line.
Prior to the AZ tie-up, the normally deal-averse Danish company Novo Nordisk said in June 2020 that it would purchase another de Garidel-led biotech, Corvidia, for $725 million with a potential total transaction of $2.1 billion.
"In biotech, you feel that you’re part of giving people a better life."
Marc de Garidel
CEO, CinCor
Each of the acquisitions involved a lead drug candidate in mid-stage studies — for CinCor, baxdrostat; for Corvidia, ziltivekimab — that showed promise and provided the perfect opportunity for a Big Pharma to take the reins into phase 3. For de Garidel, the sweet spot is in making sure the data is strong enough to give him and his company leverage at the negotiation table while also giving the buyer an auspicious candidate to bring to market.
Here, de Garidel talks about his science-first approach to dealmaking, how he builds trust within the small biopharma community and where he sees himself going next.
This interview has been edited for brevity and style.
PHARMAVOICE: In a time when M&A has been relatively slow, you've been at the center of two acquisitions each worth potentially more than $1 billion. So you have a penchant for making this kind of deal happen — what do you attribute that to?
MARC DE GARIDEL: Drug development is a value creation process, and you need to go in step. You need to make sure that the studies you're going to do are going to inform the medical community about how good the drug is, in which patient population it's going to be valuable, and not only how the drug can be approved by the FDA or other regulatory authorities, but also typically how it can be reimbursed in a cooperative way so that patients can benefit from it. What I've learned over time is that the process requires experience and a great team.
But ultimately, these drugs could be further developed by Big Pharma — and that's one of the reasons I was able to do two transactions in a relatively short period of time, because we are thoughtful about development and reduced risk for the phase 3 program, which will be the final step.
With regard to the CinCor deal with AstraZeneca, can you speak generally about those conversations with AZ CEO Pascal Soriot and how you inspired confidence in the deal?
The genesis of the interest from AstraZeneca, in my impression, was that baxdrostat is a potentially important agent for a number of medical indications in the future. And the other dimension that may have differentiated (CinCor from) AstraZeneca’s (perspective) is that baxdrostat could be ultimately combined with (AZ's SGLT-2 cardiovascular drug Farxiga). And they will ultimately have a better idea of the potential for this population.
It seems there were a lot of tactical considerations during the dealmaking process — some of them a little risky. What is your approach to the negotiation table and how do you keep a steady course through it all?
Companies are not sold — they are bought. So the underlying view and the best strategy to potentially sell is to build a credible company that can deliver clinical results so that the work can be better appreciated. The success of CinCor in my mind is the quality of the clinical programs and a very thorough medical thinking around it.
And two, it was a strategy of the board and management to raise as much cash as possible. In a year where the financial markets were terrible, we raised $600 million between the series B and the IPO. That gave us leverage to on one-hand be able to run the company until 2026, but also some leverage for negotiations with Big Pharma as they try to maximize their return. So the fact that we have plenty of cash and the ability to say no.
It's true that I had the privilege to talk directly to (Soriot), and so we could speak to each other and express our respective views. The question was more the timing — nobody has a crystal ball. So as you are proceeding with negotiations, you want to represent well your shareholders and your employees. And you want to make sure the party who is going to take over will do a good job, because at the end of the day, our mission is really to our patients.
Going back to the acquisition of Corvidia, Novo Nordisk is a company that doesn't come to the table very often. Was that a much different process than with AstraZeneca?
Fundamentally, the quality of the programs was the same, but a bit more difficult because it would require several years of a phase 3 and several hundred million dollars of a commitment.
And another part that was a bit more difficult was dealing with COVID at the same time — it's easier to negotiate when you can be together.
You mentioned the IPO of CinCor, which happened at a time when other companies were waiting out some of the volatility in the markets. How did you know it was the right time to do that?
When you look at the syndicate of investors on top of our really incredible funding rounds, they thought it would be important to raise further funding for the company as we wanted to expand again the number of phase 2 studies and do three in the first half of 2023. The IPO was a way to continue to work that independence and also provide leverage if Big Pharma would come to play.
You have worked for a few pharma giants like Eli Lilly and Amgen earlier in your career, became CEO of mid-sized Ipsen and now a few clinical-stage companies in a row. Can you explain why that trajectory has worked for you?
This was not pre-planned. What you learn is, the good thing about working in big companies initially is it gives you a good framework for how you should develop a drug or how you should commercialize. And at least in my case, I was able to rise in the ranks with more and more responsibility. And then, being CEO of (Ipsen) was a very productive time — you make some mistakes, and you learn, but it builds your credibility and builds your knowledge.
What I like about biotech is you can try to develop really innovative things — but you have to accept that there is obviously much more risk than when you're at a big company. At the same time, you have much more impact. In biotech, you feel that you're part of giving people a better life. There are struggles because of the ups and downs, and some people prefer to take less of a risk and be in a large organization, but that is something that I really enjoy.
What are some ways that you gain trust as a leader and negotiator in the very early encounters that lead to a deal?
It all starts with the data. You have to try to demonstrate the potential problems and show that the strategy of developing the drug makes sense. In this day and age, it is going to be more difficult for drug companies to not only pass this bar for mutual support, but also make sure (their) drug is going to be used and properly justify its price. That doesn't happen randomly — you need to think about the study design. Sometimes, biotech leaders are great scientists, but they have never commercialized anything, and they don't know how all these various steps take place. And that's why they don't get bought because a bigger company says, well, we need to redo basically the whole development program if we want to have it on the market.
What's next for you?
Subject to HSR, the tender offer (for CinCor) would be in the second half of February or at least by the end of the first quarter. After that, I'll take a quick break and then we'll see what happens. There is already demand for me to do certain things. We'll have to weigh between non-exec jobs and possibly another CEO job, but time will tell. It's good to relax a bit because last year, we had a very intense thing we did. You make good decisions when your brain is healthy and ready to go.
