In the realm of healthcare, neurology is experiencing a revival, marked by notable clinical advancements, increased deal activity, and a resurgence of interest from pharmaceutical giants. While perhaps not as widely discussed as topics like obesity, neuroscience’s return to the spotlight is evident through various indicators, including rising deal numbers and significant mergers and acquisitions. We recently published an eBook that discusses several deals, as well as the hottest areas of the market and the players to keep an eye on. The full report is here, but I wanted to share a few key takeaways in this blog.
To set the scene, three major mergers and acquisitions in 2023 highlighted Big Pharma’s renewed focus on neurology. Bristol Myers Squibb’s acquisition of Karuna Therapeutics for $14 billion, AbbVie’s $8.7 billion deal for Cerevel, and Biogen’s $7.3 billion purchase of Reata (gaining rare disease drug Skyclarys for a rare neurological disorder), demonstrate the potential for substantial returns in the neurology market.
The resurgence in neurology extends beyond corporate deals to include significant clinical progress. Johnson & Johnson’s depression treatment, Spravato (esketamine), emerged as its fastest-growing drug in 2023. Additionally, promising Phase 3 programs for adjunctive depression treatment are on the horizon, reflecting the industry’s commitment to addressing mental health disorders.
Here are three key takeaways from the report:
- Alzheimer’s Disease Opens Up
One key driver behind neuroscience’s resurgence is the significant unmet need in the field. Decades of underinvestment has left a void in the treatment landscape, creating opportunities for new therapies to make an impact. Conditions such as Alzheimer’s, Parkinson’s, epilepsy, depression, migraine, and various rare diseases present compelling commercial opportunities for innovative treatments. - Low-Risk, Late-Stage Deals
In neurology, failures like Roche’s gantenerumab and Anavex Life Science’s blarcamasine highlight the risks. However, successful acquisitions and approvals, such as Pfizer’s acquisition of BioHaven and the approval of its migraine drug Nurtec ODT, demonstrate the potential rewards. Pfizer and BMS, like most CNS buyers, prefer low-risk, late-stage deals. Pfizer, a Cerevel shareholder, is awaiting Phase 2 results of emraclidine (by end of June 2024) before considering acquisition. Karuna’s KarXT approval decision is due in September 2024. - New Molecules and Mechanisms
The discovery of new genetic targets for neurodegenerative diseases is an exciting development. Denali Therapeutics and Biogen are developing a Parkinson’s drug targeting the LRRK2 mutation. Alector is working on Alzheimer’s and dementia drugs targeting the TREM2 and progranulin genes, respectively. Lexeo Therapeutics is using gene therapy to combat Alzheimer’s in patients with the APOE4 gene, and Novo is testing semaglutide’s potential role in dementia, with results due in 2026.
I recommend taking a look at the full report which has much more to reflect on. Like many others, I will be keeping a close eye on this rapidly evolving market over the coming years.
