2017 gets start­ed with a bang as we get a glimpse of the good, the bad and the ug­ly

End­points as­sess­es the big bio­phar­ma R&D sto­ries of the week, with a lit­tle added com­men­tary on what they mean for the in­dus­try.

Pre-JPM biotech news burst un­der­scores a strong start to 2017, for the pri­vate side

Brad Lon­car not­ed on Twit­ter ear­li­er to­day that there’s been a dearth of pub­lic biotech news ahead of the big JP Mor­gan con­fab next week. But the pri­vate side has been any­thing but qui­et. Case in point: George Scan­gos quick piv­ot from CEO at Bio­gen to chief of a start­up called Vir Biotech­nol­o­gy. Arch has al­ready com­mit­ted $150 mil­lion in back­ing, and Gates and oth­ers will add hun­dreds of mil­lions more. The news, along­side a blast of new de­vel­op­ments that dom­i­nat­ed this short work week, un­der­scores that the fund­ing side in biotech re­mains ac­tive, even as pub­lic biotechs con­tin­ue to face a dif­fi­cult and un­for­giv­ing mar­ket. We count that as a glass more than half full, which is a good way to start the year.

 M&A val­u­a­tions are shoot­ing sky high. How long can that last?

We start 2017, like 2016, with some big ex­pec­ta­tions on the M&A side of things. Af­ter a woe­ful year in new drug ap­provals, Big Phar­ma — as well as Big Biotech — is in big­ger need of new deals than ever. But buy­outs have lagged far be­hind ex­pec­ta­tions. And a new analy­sis of val­u­a­tions helps ex­plain why. The cost of new biotech ac­qui­si­tions has been steep, and it’s grow­ing at a rapid pace. With few­er at­trac­tive late-stage as­sets, it’s a sell­er’s mar­ket, and they know it. Pre­mi­ums are burst­ing far be­yond old ex­pec­ta­tions. And it’s beg­ging a sim­ple ques­tion: How long can that kind of trend last? Big Phar­ma’s R&D mod­el is al­ready bust­ed and ex­posed to huge pres­sure if pric­ing re­forms take shape. A reck­on­ing won’t be pain­less.

 A painful down­turn in new drug OKs ex­pos­es a se­ri­ous weak­ness

Don’t let sooth­ing pro­jec­tions of high­er new drug ap­provals for this year per­suade you to over­look just how se­ri­ous 2016’s ane­mic record is for the in­dus­try. Too many Big Phar­mas are al­ready suf­fer­ing from a short­age of new prod­uct OKs. And too many ap­provals that do ar­rive are for drugs that are poised to en­ter bru­tal com­pe­ti­tions. A sim­ple re­turn to the ap­proval rates we grew ac­cus­tomed to in 2013-2015 isn’t go­ing to fix that fun­da­men­tal prob­lem. And Big Phar­ma ac­counts for a huge share of the over­all R&D dol­lar in bio­phar­ma. Some­thing has to give here, which may en­cour­age new mod­els of drug de­vel­op­ment that will force a fo­cus on late-stage pipelines above all else. Too much mon­ey is wast­ed on R&D, and waste is get­ting in­cred­i­bly un­fash­ion­able. Any big play­er that fig­ures out a sus­tain­able mod­el for new prod­uct de­vel­op­ment will be quick­ly copied.

 Aca­d­e­mics are break­ing the mold in ear­ly-stage R&D

I’ll ad­mit right off the bat that I have a keen in­ter­est in biotech star­tups that like to break the mold. And PvP Bi­o­log­ics, a spin­out from the Uni­ver­si­ty of Wash­ing­ton, ac­com­plished that nice­ly this week, go­ing from start­up to Take­da part­ner with $35 mil­lion in R&D sup­port to back a proof-of-con­cept study for a new treat­ment for celi­ac dis­ease. No VC cash. No huge di­lu­tion. But lots of ex­pert ad­vice. The move un­der­scores a small but grow­ing trend as aca­d­e­mics do more than ac­cept a sliv­er of eq­ui­ty for their pre­clin­i­cal work. This is a com­pa­ny, and a trend, well worth watch­ing.

 Big Phar­ma ex­ecs are mak­ing a bee-line to biotech

As chance would have it, I had the op­por­tu­ni­ty to talk to Neon Ther­a­peu­tics CEO Hugh O’Dowd ear­li­er in the week about a big new round. The No­var­tis vet had just ex­changed emails with David Ep­stein, the for­mer phar­ma chief for No­var­tis who joined Flag­ship as an ex­ec­u­tive part­ner this week. And that news came right on the heels that No­var­tis on­col­o­gy de­vel­op­ment head Alessan­dro Ri­va had jumped ship for Gilead, which needs all the help it can get to ex­e­cute a turn­around on a suf­fer­ing pipeline. No­var­tis has been push­ing a ma­jor over­haul over the past year, and a string of top ex­ecs has been fan­ning out in­to the biotech world. That’s an­oth­er in­di­ca­tion of the more vi­brant for­tunes avail­able in biotech these days, as well as a vote for where in­no­va­tion will lie in the years ahead.

Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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