Regulators have signaled for the last few years that they’ll be keeping a closer eye on M&A in pharma — and the Federal Trade Commission’s move in December to block Sanofi’s acquisition of Maze Therapeutics’ clinical program for Pompe disease offers a look at how this fresh scrutiny could play out.
The FTC’s decision was still unusual, and not only because it interfered with a licensing deal, according to Laksheeta Johari, a consultant with Lifescience Dynamics.
“What the FTC statement failed to take into account were the challenges that are associated with developing therapies for rare diseases,” Johari added.
The FTC regularly weighs in on M&A and recently highlighted its work to lower drug prices and encourage competition. For instance, it touted a proposed consent order for Amgen’s $27.8 billion acquisition of Horizon Therapeutics that would prohibit Amgen from leveraging its drug portfolio to disadvantage rivals and require the company to seek prior approval before acquiring related products.
However, the announcement a few days later that the FTC would block Sanofi’s acquisition of Maze’s glycogen synthase 1 inhibitor MZE001 came as a surprise.
“This is unprecedented,” Maze CEO Jason Coloma told Biotech TV earlier this year. “As far as we’re aware, this is the first time that a licensing project or a licensing deal has been blocked by the FTC.”
While the commission has an important role to play in ensuring a “healthy spirit of competition,” Johari believes there should be an extra layer of consideration for rare diseases.
“We can’t compare the rare disease space with some of the more established therapeutic areas … I think that’s one nuance every aspect of the industry does need to keep in mind,” she said. “Whether it’s from a clinical development perspective, a commercialization perspective or even an access and reimbursement perspective, it’s not going to be an apples-to-apples comparison when we’re looking at rare diseases.”
A deal abandoned
Sanofi’s deal with Maze brimmed with optimism when it was announced in May 2023.
“People with Pompe disease continue to need additional treatment options for this life-threatening condition,” Coloma said in a statement. “Sanofi is a leading global healthcare company with deep experience working with this community and the ideal partner to continue the advancement of MZE001.”
Indeed, treatment options for Pompe disease, a rare genetic disease that causes progressive weakness, are limited and come from just two companies, Sanofi and Amicus Therapeutics, the latter of which scored an approval for its two-component therapy in September. In addition, the current treatments are infusions. If MZE001 makes it to market, it could be the first oral medication available for Pompe disease patients.
The Sanofi-Maze deal followed a familiar pharma strategy. Maze is a smaller, clinical-stage company, and Sanofi is a major player that already has three approved drugs for Pompe disease. The licensing deal meant Pompe disease patients would potentially get a new treatment faster because the development would be in the hands of a company with vast resources and established experience in that indication.
But the FTC disagreed, and the very factors that made this deal favorable for the companies — and potentially patients — is what sunk it in the end. The FTC called Sanofi “a monopoly supplier” of Pompe treatments and said Sanofi could use the acquisition to squash competition and delay development of the new drug.
According to Sanofi, “The exact opposite is true.”
“Sanofi had no intention of shelving or killing the program. Sanofi executed the license agreement with Maze because Sanofi believed that it could bring its resources, experience, and expertise in Pompe disease to accelerate the development of MZE001 and potentially bring it to Pompe patients around the world, as Sanofi has done with substrate reduction therapies for other rare diseases,” a Sanofi spokesperson told PharmaVoice via email.
Ultimately, Sanofi decided to abandon the deal.
Another rare disease roadblock
Rare disease drug development is already lengthy and filled with significant and unique roadblocks. When a disease is poorly understood and the patient population is small, it can be a challenge to design trials with endpoints with known clinical benefits. It can also be difficult to find experts in rare disease indications and to recruit for trials among a geographically scattered patient population.
Incentives like the Orphan Drug Act exist to encourage companies to develop drugs for rare diseases in the face of such obstacles, and the FDA granted Maze’s MZE001 an orphan drug designation in 2022.
“Across the rare disease industry, [the FTC’s decision] may make players do a double take on who they want as their partner."
Laksheeta Johari
Consultant, Lifescience Dynamics
Those challenges are also why smaller companies developing rare disease treatments partner with larger ones that have the resources and experience needed to develop drugs more quickly and efficiently.
Pompe is a life-threatening genetic condition that affects about one in 40,000 people. Sanofi has decades of experience in the field and established relationships with healthcare providers and patient groups, and has designed successful Pompe disease clinical trials.
“In this case, you had a company that had over 20, 25 years of experience working with that community,” Coloma told Biotech TV. “They were in a very strong position to think about the best way and the most rapid way to develop this for patients, and that’s, in part, one of the major reasons we wanted to work with them.”
Rather than starting from scratch, Sanofi would have been able to apply existing resources and years of experience to developing MZE001.
“Sanofi, given that they have approved assets in Pompe, already has those established relationships, and that could have really benefited Maze with the clinical development of the MZE001 asset,” Johari said.
Now, Maze seems to be going back to the drawing board for MZE001.
“All it does is delay the ability to even test the hypothesis in the clinic,” Coloma told Biotech TV, adding that the company was “exploring our options” and committed to advancing MZE001 to the clinic and to patients.
A chilling effect?
Gaining a partner with experience in a rare disease indication should be a boon for a small company that’s trying to develop an orphan product.
“If you’re looking at rare diseases, it is very important that you have a player that understands the field, that has those relationships,” Johari said.
However, the FTC’s scrutiny and blocking of a par-for-the-course licensing deal could have a chilling effect on other, similar partnerships, she said.
“Across the rare disease industry, it may make players do a double take on who they want as their partner,” Johari said.
It also raises questions about whether the FTC should engage with experts in rare disease as it evaluates future partnerships.
“Maybe there’s a need to have a rare disease expert have a seat at the table to determine what’s an anticompetitive threat or something that can benefit the industry,” Johari said.
