The Weekly Term Sheet (43)

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice. The author is not a lawyer or financial adviser. All information is derived from publicly available sources and may not be complete or current. Details regarding transactions, royalty structures, and financial arrangements may change. Readers should conduct their own due diligence and consult with appropriate legal and financial professionals before making any decisions.

Week in Review

This week marked a significant acceleration in biotech M&A activity, anchored by Blackstone and TPG's $18.3 billion take-private of Hologic—the largest medtech deal in recent memory—and Takeda's audacious $11.4 billion bet on Innovent's immuno-oncology pipeline. The dealmaking momentum reflects growing confidence in the sector after a difficult first half of 2025, with acquirers deploying creative structures including contingent value rights across multiple transactions.

Eli Lilly continued its gene therapy expansion with Adverum, while Alkermes made a strategic pivot into sleep medicine via its $2.1 billion Avadel acquisition.

Beyond M&A, the week showcased robust venture activity with dual $70 million Series A rounds for Elevara Medicines in rheumatoid arthritis and Excellergy in next-generation allergy therapeutics. Summit Therapeutics' massive $500 million private placement underscored the capital intensity of late-stage oncology development.

Meanwhile, royalty monetization continued its rise as a financing alternative, with DRI Healthcare's $300 million potential deal for Viridian's thyroid eye disease assets exemplifying how specialized investors are filling funding gaps in today's constrained environment.

Manufacturing investment dominated the infrastructure narrative, led by Merck's $3 billion Virginia facility groundbreaking and Cambrex's $120 million API capacity expansion in Iowa. These moves reflect the pharmaceutical industry's ongoing commitment to supply chain resilience and domestic production capacity.

The week also saw a wave of stealth launches in platform technologies spanning allergy, autoimmune disease, and rare genetic conditions, demonstrating that despite market headwinds, innovation capital remains available for differentiated scientific approaches. Taken together, the week's transactions signal a maturing market where strategic buyers are increasingly comfortable deploying capital, albeit with milestone-heavy structures that share risk between parties.

Mergers & Acquisitions (M&A)

Lilly will acquire Adverum Biotechnologies for up to $262 million in total value, focused on Adverum's Phase III gene therapy Ixo-vec for wet age-related macular degeneration. The deal includes $74.7 million upfront at $3.56 per share and a contingent value right of up to $8.91 per share, approximately $187 million, tied to U.S. approval and sales milestones. This back-ended structure highlights the trend of using CVRs in biotech takeouts during a slow market. The transaction is expected to close by year-end 2025.

France's Ipsen is buying ImCheck Therapeutics, also France-based, for up to €1 billion, approximately $1.59 billion, to obtain ICT01, a mid-stage monoclonal antibody for acute myeloid leukemia. ImCheck shareholders will receive €350 million upfront, around $406 million, with deferred regulatory and sales milestones bringing the total to €1 billion. The deal, announced October 22, 2025, bolsters Ipsen's immuno-oncology pipeline and is slated to close in Q1 2026.

Ireland-based Alkermes will acquire Avadel Pharmaceuticals and its narcolepsy drug Lumryz in a deal worth up to $2.1 billion. Alkermes is paying $18.50 per share in cash plus a $1.50 per share CVR payable if Lumryz wins FDA approval for idiopathic hypersomnia by end of 2028. The $20.00 per share total represents a 38% premium to Avadel's recent trading average. The acquisition, announced October 23, expands Alkermes into sleep medicine and is expected to close in Q1 2026 pending shareholder and regulatory approvals.

Women's health diagnostics firm Hologic agreed to be taken private by private equity firms Blackstone and TPG for $18.3 billion. The PE consortium will pay $76 per share in cash, a 46% premium to Hologic's pre-rumor price, plus an earn-out of up to $3 per share tied to revenue milestones in Hologic's breast health business. This could boost the total price to $79 per share, with the deal announced October 22. Co-investors include Abu Dhabi's sovereign fund and GIC of Singapore. Hologic will be delisted upon expected close in H1 2026, but retain its Massachusetts HQ and branding.

Japan's Chugai Pharmaceutical, majority-owned by Roche, will acquire Tokyo-based Renalys Pharma for an upfront ¥15 billion, roughly $98 million, and a potential ¥16 billion, approximately $105 million, follow-on payment. The deal gives Chugai partial rights to sparsentan, Travere's IgA nephropathy drug marketed as Filspari in the U.S. and EU, in Japan, South Korea and Taiwan. The extra ¥16 billion would be payable upon positive Phase III results and regulatory approvals in those Asian markets, positioning Chugai in kidney disease pending trial readouts later this year.

Other notable M&A news includes Roche signaling it will sustain an aggressive deal pace after its $3.5 billion acquisition of 89bio earlier in 2025, and XOMA, a U.S. royalty aggregator, continued its tender offer to acquire LAVA Therapeutics of the Netherlands with updated terms including $1.04 per share in cash plus CVRs granting 75% of proceeds from LAVA's partnered programs. This XOMA–LAVA deal, originally announced in September, was amended October 17 to adjust the cash down from $1.16–1.24 and extend the offer to November 12.

Venture Capital & Private Financing Rounds

Elevara Medicines of London closed a $70 million Series A on October 22. The clinical-stage biotech is developing a novel CDK4/6 inhibitor for rheumatoid arthritis in-licensed from Teijin Pharma. The round was co-led by Forbion and Sofinnova Partners, with participation from Monograph Capital, the founder, and Weatherden. Proceeds will fund a Phase II trial of lead candidate ELV001 in RA and exploratory programs in chronic inflammatory and women's health conditions.

Allergy-focused biotech Excellergy emerged from stealth with a $70 million Series A announced October 21 to advance its first-in-class Effector Cell Response Inhibitors, trifunctional biologics that clear receptor-bound IgE, neutralize free IgE, and downregulate FcεRI. The round was led by Samsara BioCapital with co-investors including Red Tree Venture Capital and Decheng Capital. Excellergy's launch aims to reset the standard of care in allergy by targeting IgE-mediated disease mechanisms.

Publicly traded Summit Therapeutics raised $500 million on October 24 in a private sale of common shares to a syndicate that included its own executives and its Chinese partner Akeso. The PIPE was done at $18.74 per share, market price, for 26.7 million shares, providing capital as Summit and Akeso plan to seek U.S. approval of ivonescimab, a PD-1/VEGF bispecific for lung cancer, following promising Phase III data. The cash infusion, announced just after new clinical data, will help fund Summit's trials as its lead asset advances toward a BLA.

NanoPhoria Bio of Milan announced the largest-ever Italian biotech Series A at €83.5 million first close to develop its nanoparticle drug-delivery platform. The financing, led by Sofinnova Partners, will drive NanoPhoria's lead program in oncology and expand its platform for targeted enzyme delivery in lysosomal diseases. This underscores growing European venture activity, although the announcement fell just outside the October 20–26 window.

Other funding news includes Lila Sciences, Flagship Pioneering's AI-driven "scientific superintelligence" startup in Cambridge, Massachusetts, announcing on October 14 an extension bringing its Series A to $350 million, backed by Nvidia and others, for building AI-automated "Science Factories". And Kardigan Bio of California closed a $254 million Series B on October 14 to advance a late-stage cardiovascular drug portfolio. Though prior to October 20, these massive rounds reflect the quarter's upswing in biotech financings after a tough first half of 2025.

Licensing, Collaboration & Co-Development Deals

Biogen licensed global rights to Vanqua Bio's preclinical small-molecule antagonist of C5aR1, an immune cell receptor, in a deal worth up to $1.06 billion. Under the October 24 agreement, Vanqua receives $70 million upfront and is eligible for up to $990 million in development, regulatory and commercial milestones, plus royalties. The oral C5aR1 inhibitor targets inflammatory and neurodegenerative disorders. This deal bolsters Biogen's immunology pipeline as it diversifies beyond its declining MS franchise.

Takeda struck a major collaboration with China's Innovent Biologics, pledging up to $11.4 billion in total value announced October 22. Takeda will pay $1.2 billion upfront, including a $100 million equity stake, for co-development rights to two of Innovent's oncology assets: IBI363, a first-in-class PD-1/IL-2 bispecific fusion protein, and IBI343, an antibody–drug conjugate targeting CLDN18.2. Takeda also gains an option on a third asset, IBI3001. If all milestones are met, Innovent could earn approximately $10.2 billion in payments bringing the deal to $11.4 billion, plus royalties. Notably, the partners will share U.S. profits 40/60 on IBI363, Innovent/Takeda respectively, and split global development costs, reflecting an alliance model with profit-sharing for key territories. This collaboration gives Takeda access to next-generation immuno-oncology drugs and deepens its pipeline in solid tumors.

On October 17, Rani Therapeutics of San Jose announced Chugai will license Rani's oral biologics capsule technology for an oral version of a Chugai antibody and up to five additional drugs. The first program yields Rani $10 million upfront, up to $75 million in development milestones, $100 million in sales milestones, and single-digit royalties. Chugai can expand the deal to five more antibodies under similar terms. While just before October 20, this $1.09 billion potential deal exemplifies innovative pharma-biotech licensing to make injectable biologics orally deliverable.

Denmark's Lundbeck entered a strategic research collaboration with Contera Pharma, a Danish-founded biotech, to develop oligonucleotide therapies for neurological diseases. Announced October 21, the deal provides an upfront payment and research funding to Contera for each novel RNA target identified. Lundbeck gains options to license and advance candidates, with Contera eligible for milestones and tiered royalties on any products. This academia-linked collaboration, Contera was spun out of Lundbeck, will leverage Contera's RNA discovery platform in CNS disorders.

Strategic Partnerships & Commercial Alliances

Iambic Therapeutics, an AI-driven oncology biotech, and Jazz Pharmaceuticals formed a collaboration announced October 21 to test an experimental combo therapy for HER2-positive breast cancer. Jazz will provide its bispecific antibody Zaniherin, HER2xHER2, also known as "Ziihera", at no cost, to combine with Iambic's brain-penetrant HER2 kinase inhibitor IAM-1363. Iambic will sponsor a trial in HER2+ metastatic breast cancer patients previously treated with Enhertu. This no-upfront-cost alliance gives Iambic access to a commercial-stage antibody for combination, illustrating a non-financial R&D partnership model to explore new indications.

On October 24, Greenstone Biosciences and Illumina announced a collaboration to advance precision drug discovery. Greenstone, a Palo Alto biotech co-founded by Stanford's Joseph Wu, brings its extensive induced pluripotent stem cell disease models, while Illumina contributes cutting-edge single-cell and spatial genomics sequencing tools. Together they aim to generate high-resolution molecular maps of disease biology to better identify drug targets and understand therapeutic responses. This partnership, with no financial terms disclosed, pairs a big genomics player with a startup's iPSC platform to accelerate target discovery and translational research.

CRO giant Charles River Laboratories inked a strategic collaboration with X-Chem announced October 20 to enhance hit identification in early drug discovery. The deal gives Charles River's clients access to X-Chem's DNA-encoded library screening platform featuring over 15 billion compounds alongside Charles River's in-house protein production, assay development and Hit-to-Lead expertise. By integrating the two companies' capabilities, the alliance provides a seamless workflow from hit finding to lead optimization for biotech and pharma clients. This reflects the growing trend of CROs partnering with DEL technology specialists to speed up discovery. No upfront sums were detailed; the value lies in broadened service offerings.

Merck announced on October 21 that it broke ground on a new $3 billion manufacturing facility in Elkton, Virginia as part of its over $70 billion ongoing investment in U.S. production capacity. The 400,000 square foot "Center of Excellence" will produce active pharmaceutical ingredients and finished drug products, creating 500 full-time jobs when operational and 8,000 construction jobs during build-out. This public-private effort, supported by federal and state incentives, underpins Merck's strategy to reshore pharmaceutical manufacturing for supply chain resilience. The Virginia site expands Merck's domestic footprint amid its large multiyear capex program in response to post-pandemic supply concerns.

Additional partnership news included Roche partnering with the U.S. FDA to use Gazyva in lupus nephritis, the first FDA approval of a biologic for this kidney complication, and Lundbeck's alliance with Contera detailed above. These underscore how strategic collaborations span from R&D through manufacturing and even regulatory science.

Royalty Monetizations & Structured Financings

Canada-based DRI Healthcare, a biotech royalty investment firm, agreed to pay $55 million upfront for a royalty interest in two of Viridian Therapeutics' Phase 3 thyroid eye disease therapies, with total payments up to $300 million contingent on milestones. Announced October 21, the deal provides Viridian non-dilutive funding as it advances VRDN-003 and veliglucigothel, both in Phase III for thyroid eye disease. In exchange, DRI will receive a tiered royalty on future net sales: 7.5% on sales up to $600 million, 0.8% on $600–900 million, and 0.25% on $900 million–$2 billion. This structured deal gives Viridian cash to fund trials, while DRI earns a return if the drugs succeed, exemplifying the royalty monetization trend as biotechs seek capital amid tight equity markets.

Summit Therapeutics' $500 million PIPE, discussed under Venture Financing, involved strategic partner Akeso and can be viewed as a structured financing to fund late-stage trials, essentially functioning as an equity-linked collaboration for ivonescimab's U.S. development. Such deals blur the line between pure venture funding and strategic investment by partners, highlighting creative financing approaches in 2025's capital-constrained environment.

Royalty financiers remained active globally. For instance, Royalty Pharma, the largest royalty fund, recently funded Zenas BioPharma with up to $300 million for rights to autoimmune drug obexelimab announced October 17, and earlier in 2025 committed $250 million upfront plus $750 million debt, total over $1 billion, to Revolution Medicines for a synthetic royalty on a RAS-inhibitor cancer therapy. Additionally, XOMA's ongoing acquisition of LAVA Therapeutics, structured heavily around future royalty streams, underlines how mergers are being structured as royalty plays, with XOMA offering cash plus CVRs entitling LAVA shareholders to 75% of future partnered-program proceeds. These transactions underscore the rise of royalty/interest monetization as a lifeline for biotechs to obtain nondilutive funding or exits, with specialized investors like Royalty Pharma, DRI, XOMA, and others providing capital in exchange for slices of future drug revenues.

Infrastructure & Manufacturing Investments

Merck's $3 billion Elkton, Virginia facility, mentioned in Partnerships above, is part of over $70 billion in U.S. manufacturing investment the company has announced, aiming to expand domestic production capacity across vaccines, biologics and small-molecule therapeutics. This week's groundbreaking highlights big pharma's response to supply chain resiliency initiatives, with government partnerships and regional incentives driving major capital projects.

CDMO Cambrex unveiled a $120 million investment on October 22 to expand its Charles City, Iowa API manufacturing site by approximately 40%. The project will add nearly one million liters of reactor capacity, making the Iowa facility, already the largest independent API plant in the U.S., even bigger. Cambrex's CEO noted this will support the reshoring trend as clients and U.S. agencies seek local API supply for critical drugs. This expansion, along with recent additions in North Carolina and Massachusetts, strengthens Cambrex's position in small-molecule and peptide manufacturing.

BioNTech received a $40 million grant from philanthropic and development sources to expand its mRNA vaccine manufacturing site in Kigali, Rwanda. The plant, which will produce mRNA vaccines for diseases like malaria, tuberculosis, HIV, and mpox, is part of BioNTech's initiative to develop scalable vaccine production in Africa. The funding announced this week will help increase capacity and train local workforce, illustrating global health infrastructure investment beyond the usual U.S./EU centers.

Investment in contract manufacturers surged with multiple projects including Cambrex's $120 million Iowa expansion, Wilmington PharmaTech, a U.S. small-molecule CDMO, taking an equity investment from Curewell Capital to expand capacity, and SK pharmteco announcing a new U.S. peptide development lab, a smaller $6.1 million project. These reflect a broader trend of capacity expansions in the CDMO sector to meet rising demand and supply chain localization.

New Company Formations & Stealth Launches

Excellergy of San Mateo, California launched from stealth with a $70 million Series A led by Samsara BioCapital to develop a new class of allergy drugs. Its Effector Cell Response Inhibitors aim for comprehensive IgE pathway blockade to achieve "complete allergic control". Excellergy's debut on October 21 promises a fresh approach to severe allergies, resetting standards of care.

ImmunoVec of San Diego emerged from stealth with up to $40.7 million in ARPA-H funding for its in vivo cell engineering platform. The startup is developing a first-in-class DNA-loaded nanoparticle therapy for autoimmune diseases. The U.S. government's EMBODY program is backing ImmunoVec, highlighting federal support for high-risk biotech innovation.

Liberate Bio of Cambridge, Massachusetts launched with $31 million seed financing to advance its RNA barcoding platform and develop in vivo CAR-M, CAR-macrophage, therapies. The October 2025 stealth emergence will fund Liberate's preclinical work, aiming for first clinical trials of its macrophage-targeting cell therapies in 2026.

Rare Therapeutics of Philadelphia launched during this week to develop gene therapies for ultra-rare diseases. Its initial pipeline targets extremely orphan conditions like GM1 gangliosidosis, Krabbe disease, and metachromatic leukodystrophy. Rare Therapeutics is likely backed by academic founders and niche venture funds, addressing areas large pharma often neglects.

Several biotech startups secured first financings or emerged from stealth around this time. Nilo Therapeutics of New York launched with $101 million Series A to develop neuromodulation therapies for autoimmune disease harnessing neural–immune circuits. Also, Liberate Bio and ImmunoVec, noted above, reflect how ARPA-H and specialized VCs are fueling new platform companies. The trend of well-funded stealth launches, often tackling platform technologies like AI, iPSC, and RNA, remains strong in late 2025, even as overall biotech funding recovered only cautiously.